Venture capital is on the rise, and once again, Silicon Valley is growing thick with start-ups.
Research and development funding in Silicon Valley has hit new highs, and corporate profits at area firms are generally robust.
And yet, despite an environment in which entrepreneurship is strong, and established firms are by and large healthy, the Silicon Valley job market remains stagnant. Household income in the area is down, and troubling disparities persist in the areas of health care, education and housing.
Those are among the findings of a report, "2005 Silicon Valley Index," released Monday by Joint Venture: Silicon Valley Network, a nonprofit organization that assesses the region's economic health each year.
"There are really two ways to view the Silicon Valley economy," said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto. "You could say lots of things are up in Silicon Valley, which gives us reason to be hopeful--except jobs are down, and, of course, that's an enormous exception."
Levy was an adviser to Joint Venture.
"Sales and exports are up at Silicon Valley companies," Levy said. "Profits are up. But that's not translating into general prosperity. In the past, we could take the return of prosperity among Silicon Valley's biggest companies as a signal that general prosperity is upon us. But I think the story here is that link has been severed. The question now is whether that link has been severed permanently."
The study found that the region lost an estimated 1.3 percent of its jobs between mid-2003 and mid-2004, and average pay fell by 1 percent.
That drop came on the heels of the 200,000 jobs that were lost earlier in the decade--representing nearly 20 percent of the work force--when the San Jose metropolitan area...