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January 2010, Vol. 133, No. 1
Crash and reboot: Silicon Valley high-tech employment and wages, 2000–08
Amar Mann and Tian Luo
Amar Mann is a regional economist and Tian Luo is an economist, both at the Bureau of Labor Statistics’ West Regional Office for Economic Analysis and Information in San Francisco, California. E-mail: email@example.com or firstname.lastname@example.org
On the whole, high-tech industries in Silicon Valley declined sharply in employment and wages from 2000 to 2004 but increased gradually in both respects from 2004 to 2008; though the industry mix changed during the 8-year period, Silicon Valley remains the world’s leading high-tech hub.
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Silicon Valley is the largest and most influential high-tech center in the world and leads all other metropolitan regions in the United States in the breadth and scope of economic activity it creates through technological innovation.1 Since the 1960s, when technology firms that were engaged in semiconductor manufacturing, computer design, and computer programming and services began to symbiotically cluster in the southern portion of the San Francisco Bay Area, Silicon Valley has become the most famous high-tech industrial cluster in the world. The network of people, firms, universities and research institutions, and government agencies has provided an ideal habitat for high-tech firms to be born and to grow; the products of these high-tech firms have improved business processes and models, generated economic growth, and improved standards of living around the globe.2
This article examines trends in Silicon Valley high-tech employment and wages during the 2000-to-2008 period, which encompasses the peak of the dot-com era, the ensuing dot-com bust, and a resurgence of high tech. It also discusses the factors affecting the decline and growth of specific Silicon Valley high-tech industries, such as increased global and domestic competition and higher demand from health-care industries. Next, the analysis examines trends in high-tech wage distribution and generation. The performance of high-tech industries in Silicon Valley is compared with the performance of those in the rest of the Nation. Finally, the analysis assesses the extent to which the clustering or geographic concentration of Silicon Valley high-tech industries has increased or decreased over the 8 years since the peak of high-tech industry performance.
This excerpt is from an article published in the January 2010 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Ross C. DeVol, Kevin Klowden, Armen Bedroussian, and Benjamin Yeo, North America’s High-Tech Economy: The Geography of Knowledge-Based Industries (Santa Monica, CA, The Milken Institute, June 2, 2009).
2 Junfu Zhang, High-Tech Start-Ups and Industry Dynamics in Silicon Valley (San Francisco, Public Policy Institute of California, 2003), p. 6.
Quarterly Census of Employment and Wages
Productivity growth in high-tech manufacturing industriesMar. 2002.
Employment and wage outcomes for North Carolina's high-tech workersMay 2004.
High-technology employment: a NAICS-based update.Jul. 2005.
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