Silicon Valley’s economy is booming, but according to one economic report there’s not a bubble in sight.
According to the think tank Joint Venture Silicon Valley, Silicon Valley’s job growth rate, at 4.1 percent, is the highest it’s been since 2000, adding nearly 58,000 jobs. Average annual incomes in Silicon Valley and San Francisco were $116,033 and $104,881, respectively, compared to $61,489 in the United States, the study shows.
On the investment side, Silicon Valley and San Francisco lured $20.2 billion in venture capital in 2014, according to the Silicon Valley Index, a report tallying economic indicators since 1995.
“I don’t see any kind of bubble,” said Russell Hancock, president of Joint Venture Silicon Valley. “This is not 2000.” Hancock cited gradual growth in investments, an expanding regional economy with good job growth, and a diverse portfolio including big data and clean tech investments as reasons for a steadier market.
More than half the VC investments were in software, a figure that has grown steadily for five years, the report says. The share of U.S. investments shot up nearly 7 percentage points to 43 percent. The report says there were were 275 U.S. Initial Public Offerings in 2014, 23 of which were Silicon Valley companies, and five of which were San Francisco companies.
The report defines Silicon Valley as Santa Clara and San Mateo counties and adjacent parts of San Mateo, Alameda and Santa Cruz counties. San Francisco was factored into some data because of the city’s quickly expanding tech sector.
But not all the news was good. Thanks to a growing wage gap, nearly 30 percent of the region’s population does not make enough money to meet their basic needs without public assistance, the report finds. The median income for high-skilled workers in the region is $118,651, while the median wages for low-skilled workers is $28,847.
And the income gap between the sexes is worse in the region than nationwide, the report shows. For workers with bachelor’s degrees, median income for men was 61% higher than for women in Silicon Valley – for a difference of $34,233. That gap is growing, and compares with 48 percent in the United States as a whole.
Not everyone agrees with Hancock’s sunny outlook. Skeptics point to public valuation of internet companies such as Twitter, and private valuations such as Facebook’s $19 billion purchase of WhatsApp as evidence of a possible bubble.
“There are enormous amounts of money sloshing around,” says Stanford University business professor Jeffrey Pfeffer. “The valuations are high, that’s for sure.” Pfeffer also cited the income gap as a concern. “I don’t believe it’s a healthy economy when service workers can’t afford to live here.”
The entire report can be found here.
Uber Brings Message of Peace to Seoul
Uber Technologies is bringing a message of conciliation and cooperation to one of its most restive markets: Seoul.
On Wednesday, David Plouffe, the car-sharing service’s new senior vice president of policy and strategy, told a ballroom full of reporters that the company wants to work with South Korean authorities.
South Korean taxi drivers and taxi industry officials hold a rally in downtown Seoul, South Korea, on February 4, demanding that Uber withdraw from the South Korean market
Uber has had a rough time in South Korea, where over the last few months the government banned the company’s main app-based taxi service, placed a bounty on illegal Uber drivers and indicted Uber founder Travis Kalanick for violating a public transport law.
“In my humble opinion, Korea should be the last country to stand in the way of innovation,” said Plouffe, defending the smartphone-based car-hailing service as about 80 cab drivers protested outside the Grand Hyatt. Working to ban companies like Uber, he added, was “directly contrary to Korea’s reputation as a global tech leader.”
Plouffe, the brains behind Barack Obama’s two successful presidential campaigns, said Uber was seeking to establish a registration system with the government for Uber drivers, with formalized rules on safety, training and insurance coverage.
Plouffe declined to say who he would meet with during his stay in Seoul, but said he was aiming his efforts at national and municipal officials, including members of the National Assembly and the Ministry of Transport.
“We want to work within the system,” he said, pointing to deals struck between Uber and municipal governments in Asia, including in the Philippines and India.
Plouffe also sidestepped a question on Google, a possible future competitor to Uber.