SAN JOSE — Silicon Valley’s current economic boom is one for the record books, and the surging tech sector accounts for a steadily widening share of the job gains that have fueled the head-spinning upswing, according to a report released Wednesday by a closely watched think tank.
For the second straight year, the tech industry has captured a bigger share of the job gains in the world’s biggest and most important tech hub and accounted for more than four of every 10 jobs created in the region, the 2020 Silicon Valley Index shows.
“The Bay Area economic engine is really fueled by all those companies out there shooting electrons, producing software, writing code, creating apps, making hardware, doing things related to programming, network architecture, the Internet,” said Russell Hancock, president of Joint Venture Silicon Valley, the San Jose-based think tank that produced the annual report.
Over the 12 months that ended in mid-2019, Silicon Valley added about 29,000 jobs, the 2020 Silicon Valley Index report determined. The report defines Silicon Valley as Santa Clara County, San Mateo County, the southern Alameda County cities of Fremont, Newark, and Union City, and the Santa Cruz County tech hub of Scotts Valley.
Yet while these jobs are a big boost for the regional economy, housing starts haven’t kept pace, traffic has worsened, and income inequality has worsened, the report found.
Yet the primary propellant behind the rocket that is the Bay Area economy is tech, which is providing an ever-larger payload for the region.
During 2019, tech companies produced 43 percent of the 29,000 jobs that were added in Silicon Valley, according to Hancock and the annual index.
That was up from 34 percent in 2018 and exceeded the tech industry’s share of 29 percent of the jobs added in Silicon Valley during 2017.
“This is a very big share,” Hancock said.
The surging pace of hiring for the technology industry is being driven primarily by a few companies — all household names — the annual index determined.
Google, Apple, LinkedIn, Amazon, and Facebook are chief among the tech industry contributors to the employment gains.
During calendar 2019, the job increases in the Bay Area were: Amazon, 7,300 new positions; Google, 3,300 jobs added; Apple, 3,200 more jobs; Facebook, 2,500 additional positions; LinkedIn, a staffing gain of 1,100 jobs.
“The growth of these companies represent 80 percent of the net gains in tech jobs for our region,” said Rachel Massaro, vice president and director of research with Joint Venture Silicon Valley.
The expansion of the technology industry underpins what’s become an unprecedented stretch of employment gains in Silicon Valley and the Bay Area overall, the index found.
“The Silicon Valley economy continues a nine-year expansion, adding jobs, achieving new levels of productivity, amassing venture capital, generating new public companies, and building out record amounts of commercial space,” the report stated.
During 2019, the total amount of newly completed commercial space — offices, research, and industrial buildings — soared to an 18-year high, reaching 8.5 million square feet, the most since 2001, at the height of the dot-com boom.
“This is the longest sustained economic expansion we’ve seen in our history,” Hancock said. “We’ve never been here before. We’ve never seen growth this long and so sustained.”