Each year a joint venture of private and public sector groups publishes an “index” to document economic, education and other trends across the hot bed of the American high-tech sector.

It’s verdict this year?

“Silicon Valley’s innovation engine is driving a recovery that leads the nation, but the persistent public sector fiscal crisis and other factors are slowing widespread economic gains …”

An Associated Press story on Feb. 27 documented just how spotty growth is across the Valley. (Read details here.)

What follows are key findings as contained in the report.

Silicon Valley Index 2012 Highlights

The Silicon Valley economy is mounting a solid recovery from the recession, one that is being fueled by a few high-performing sectors, but the gains are not yet widely distributed.

The region added more than 42,000 jobs in 2011. Monthly employment increased 3.8 percent in the region from December 2010 to December 2011, while the U.S. posted gains of 1.1 percent.

• Quarterly employment in the region improved for the first time in three years, growing two percent from Q2 2010 to 2011.
• Unemployment in Silicon Valley fell 1.4 percent over the previous year to 8.3 percent in December 2011. This is lower than California at 10.9 percent, and on par with the U.S. at 8.3 percent.
• All major areas of economic activity experienced growth from 2010-2011, except for Other Manufacturing (excluding IT), which has fallen every year since 2007, driven largely by Space & Defense Manufacturing.
• Demand is up for most types of commercial space as vacancy rates dropped and asking rents held steady from 2010 to 2011.

Silicon Valley’s innovation engine has heated up again.

• Accounting for the largest observable year-to-year gain, Silicon Valley patent registrations leapt by 30 percent over 2009 with 13,311 new patents registered in 2010 and largely in Computers, Data Processing & Information Storage. The region accounted for 49 percent of total registrations statewide and 12 percent nationally, a one percent drop over the prior year.
• Total venture capital investment rose 17 percent in 2010. Investment continues to grow in Industry/Energy, Biotechnology and Medical Devices.
• Venture capital investment in clean technology nearly doubled over the prior year and was strongest in Energy Generation, Efficiency and Storage. The region represents 34 percent of total California investment in cleantech.
• Silicon Valley’s IPOs increased from 11 to 12 in 2011 while global activity slowed. The region represents 46 percent of IPOs statewide and twelve percent nationally.
• Small Business Innovation and Technology (SBIR/STTR) funding per million dollars of GDP expanded by one percent from 2009 to 2010, the first year of growth since 2004. Total grants and funding values remained similar to 2009 levels.

The region by far outpaces other innovation hubs in the country. The region continues to grow a rich talent base.

• Science & Engineering talent expanded by four percent in Silicon Valley and by eight percent in the U.S.
• The region is one of the nation’s most culturally diverse. Half of the population speaks a language other than English in the home. Asian speakers make up large shares, however speakers of European languages are on the rise.
• Educational attainment has been increasing across all racial/ethnic groups since 2006.
• Although ‘arts-centric’ businesses have declined by 16 percent from 2009 to 2010, Silicon Valley ranks above the national average in ‘arts-centric’ businesses per one thousand residents.

Though the recovery is underway, income growth is mostly limited to high earners, and is not spread across other segments of the population.

• Silicon Valley’s per capita income in 2011 expanded by four percent to reach $66,000. While per capita income in the region is consistently higher than statewide or national values, it is also more volatile as high incomes track tech stock values. Per capita income in California and the nation increased just two percent over 2010.
• In contrast, most residents continued to suffer earnings losses in 2010 as the region’s median income continued to slide for the second year in a row. Incomes dropped three percent in the region, seven percent statewide and two percent nationally.
• From 2008 to 2010, real per capita income dropped for every racial/ethnic group in the region except for Blacks, whose income rose by 16 percent.
• Since 2004, the share of households in the low and middle income ranges has declined by four percent each while higher-income households increased to 43 percent of the region’s total households.
• The percentage of students receiving school meals increased to 31 percent in the region and 49 percent in the state.
The region’s youth are showing educational gains.
• School expulsions due to violence or drugs and gang related homicides both fell in the most recent period in Silicon Valley after fluctuating in previous years.
• Graduation rates, the percentage of students meeting UC/CSU requirements, and Algebra I scores are improving, and the region’s overall dropout rate has declined.

The housing picture is mixed.

• Residential foreclosures fell 16 percent from the first half of 2008 to the first half of 2011 in the region and declined by 24 percent statewide.
• Only five percent of new housing development was classified as affordable, reaching a 14-year low. Total new residential development expanded by 165 percent in the last year.
• The housing cost burden for renters increased statewide in 2010 and held steady in the region. For Valley homeowners, the cost burden slipped marginally.

The region’s public sector fiscal crisis persists, making it difficult to finance essential public services.

• In the fiscal year 2009/2010, city revenues fell by eleven percent from the year prior, marking the second straight year of declining revenue since 2003/2004.
• Property tax was the fastest growing revenue source for Silicon Valley cities, increasing from ten to 25 percent of total city revenue since 2000/2001.
• From 2009 to 2010, total debt funding increased by 43 percent with $2.5 billion in 2010. This growth was mostly due to increased debt funding in Education, Transportation Infrastructure and Housing.

Read the full index here.

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