Are Silicon Valley's Glory Days Over? 335
Hugh Pickens writes "Pete Carey writes in the Mercury News that there are 'clear warning signs' that Silicon Valley has entered 'a new phase of uncertainty' in which its standing as a tech center is at risk and that decisive action by business, government and education is needed if the region is to retain its standing as the world's center of technical innovation. 'It could be that Silicon Valley has a different future coming,' says Russell Hancock. 'It's not a given that we will continue to be the epicenter of innovation.' Among the troubling indicators in the Silicon Valley Index (PDF): 90,000 jobs lost in the last two years; the influx of foreign science and engineering talent has slowed; venture capital funding has declined; per capita income is down 5 percent from 2007; and the number of people working as contractors rather than full-time employees is rising. Adding to the valley's problems is a malfunctioning state government that is shortchanging investment in education and infrastructure."
Q1 & Q209 were terrible; Q3 & Q4 were spec (Score:1, Informative)
Yeah, 2009 as a whole was terrible, but VC funding in Q3 and Q4 was way up according to the Mercury News and Techcrunch; as are help wanted postings to Craigslist.
Shortchanging education??? (Score:5, Informative)
In California? Are you serious? California has always rewarded bright, young students interested in the sciences. Here's a recent example:
http://www.signonsandiego.com/news/2010/jan/15/students-evacuated-school-chollas-view/ [signonsandiego.com]
Re:shortchanging investment in education... (Score:5, Informative)
And thanks to proposition 13, only some people pay the taxes. Older residents (and the kids who inherit their homes) get a free ride, because, while the houses they bought for peanuts are now worth millions, they pay hardly any property tax. Meanwhile their neighbors shoulder the burden.
Re:We never needed foreign workers (Score:3, Informative)
Re:Set-asides, not corruption (Score:5, Informative)
The actual problem is the set-asides imposed by referendums.
Indeed, California is suffering from too much democracy. It is especially easy to get well-meaning things (or at least things that sound well-meaning) on the ballot. People vote for them because they sound nice and the voters don't have to try to balance the state budget. This commits money to all sorts of things and prevents the government from fixing the budget. The Economist recently did an article [economist.com] on this topic that is very enlightening. As bad as politicians may be at budgeting, the voters are far, far more dangerous
Re:Set-asides, not corruption (Score:5, Informative)
Agree completely. To further illustrate to people who don't understand what we're talking about, say some group or another puts a measure on the ballot that reads something like this:
After-school sports programs are a valuable part of youth education. They increase socialization among youth, promote general health, and combat the rise of obesity in America. In addition, studies have shown that after-school sports programs typically lower rates of violent crime in affected areas by 29 percent. At present, however, such programs are dangerously underfunded. This bill proposes that California earmark $18 million per year to promote after-school sports programs. As this money will come from the general fund, it will require no new taxes. School district administrators will be required to submit budgets to state agencies for approval of their share of the funds, to ensure full accountability to the taxpayer.
So Joe Voter reads this, goes, "Sure, my lazy-ass kid probably should get out and play sports more," and votes Yes. The bill passes.
What Joe Voter has done is take $18 million per year out of the general fund, where it could have been spent on various under-funded services in tough economic times, and earmarked it for after-school sports programs, come hell or high water. School can't afford books? At least it has an after-school sports program.
And what Joe Voter might not have even understood at the time he voted for this measure is that traditionally, after-school sports programs had been managed by local nonprofits, rather than being funded by school districts. Under the language of the new law, school administrators now have the additional administrative burden of producing a budget for after-school sports, or their share of the funding will be cut. And if they take the money but don't spend it on after-school sports, they will be called to task for "accountability." And who wrote this bill? The accounting firm who stands to gain the contract for managing the invoicing and budgeting of the after-school sports programs.
This is a totally made-up example; I don't know the specifics of any bill that resembles this one. It's just to give you an idea. But each election, California ballots have a dozen or so bills that read just like this one, and if you don't read the information carefully, it's easy to make mistakes.
Re:We never needed foreign workers (Score:2, Informative)
Oh please.
Find me one educated Indian person in tech (in Silicon Valley or Bangalore) who believes that the caste system is a good idea.
The caste system is a social evil that we in India have been trying to get rid of, with some degree of success - we have one of largest affirmative action systems in the world. The fact that you reference it so flippantly is a disservice to all the folks in India that are fighting to rid ourselves of this cultural monstrosity. It's like me insinuating that "Americans believe in racism" while overlooking the whole emancipation and civil rights movement
If you carry this attitude to your workplace, I'm not surprised you don't get along with your colleagues
Re:shortchanging investment in education... (Score:4, Informative)
Bad joke. If California were a separate nation, it would be the eighth largest economy in the world, right after Italy and before Spain, Canada, Brazil, Russia, India, and on and on. Australia is an entire continent, and its economy is less than half the size of California's.
Big. Deal.
I hate to be the one to tell you surfer dudes this, but Texas ($1.2 trillion GDP) is also India-sized, and so is New York ($1.1 trillion GDP). Hell, New York + New Jersey (=$1.6 trillion GDP) is almost California's size. ($1.8 trillion GDP)
People pull out this "if California were a separate nation" stuff as if to say "California is SO HUGE" but it's really not compared to other states [usgovernmentspending.com]. It's the biggest, but not by that much.
Re:shortchanging investment in education... (Score:3, Informative)
It's the Tax Foundation's numbers, not mine. Are they lying? Or could your experience not be the average experience?
Guess what - you're both right!
The "Tax Foundation" is quoting income tax. "mellon" is quoting "my taxes", which includes income tax + sales tax + everything else.
California not only has an obscenely high income tax rate, but also a very high sales tax rate (8%+), and a very high car registration fee (something like 3% of the value of your car, every year). Also, California has every possibly fee you can think of, and fines for anything are ridiculous ($400 speeding tickets, etc.) Property taxes also are not cheap.
So while Oregon, for example, has a higher income tax rate, they have no sales tax. California's income tax rate is a little lower, but it has a huge sales tax. Overall tax burden is higher in California than in other states.
Re:oh the irony (Score:3, Informative)
...I'd say that the moment silicon valley (a dynamic, spontaneous effusion of capitalism on the tech frontier) requires GOVERNMENT intervention to remain viable, you can probably stick a fork in it.
Adam Smith cringes in disgust.
Not at the Government but at the Greed of Corporations will Smith cringe in disgust.
Wealth of Nation's main premise presumes all basic needs of Society are stable and manageable before the Free Market drives it as if it's a separate, closed system that won't impact an already stable system of zero needs.