The Strange Case of the Silicon Valley: An Oasis amid the Global Economic Storm

The Strange Case of the Silicon Valley: An Oasis amid the Global Economic Storm
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It has been months since we reported the booming tech sector in the Silicon Valley despite the continuing recession in the country. Tech jobs such as mobile and Java developers are in high demand and there’s a fierce hiring competition between the different big players of the valley. The situation is even more striking in the current global economic turmoil where the valley seem to keep its calm and continue financing new ventures.This Mercury News article provides more details about this peculiar situation with one caveat though; the global slow down is likely to reach the valley in the next months and affect its growth in a stronger way.

Mercury News: “Insulated by a resurgent tech industry that’s in the midst of a hiring boom, the South Bay makes up just 6 percent of the state’s workforce, yet accounted for 16 percent of the new jobs in California created during the past six months. For those lucky enough to have jobs, South Bay wages were 34 percent higher than the average for California.

Amid the darkness, many are drawn to the valley’s light. NBC’s ancient sage, Tom Brokaw, materialized at a Palo Alto startup in late July to proclaim that the valley was in the midst of “another gold strike.” And even a noted skeptic of the social media frenzy, Washington Post columnist Vivek Wadhwa, wrote Friday that nothing can stop innovation in Silicon Valley: “Wall Street troubles, the political problems in Washington, and the staggering global economy will just make it easier for driven entrepreneurs to ignore the noise and focus on the innovation.”

When the Federal Reserve attempted to stop the hemorrhaging on Wall Street on Tuesday with a promise to hold down interest rates, it noted that hiring, consumer spending and home buying had all stalled nationally, a summer bummer that seemed to hold true everywhere but Silicon Valley. Apple briefly overtook Exxon Mobil as the most valuable company on earth. Even Old Tech companies like Cisco surged on good earnings news.

And even as something called the Russell 2000 Luxury Items Index plummeted 10.4 percent last week — suggesting that most Americans were gripping Groupons in their Louis Vuitton bags — the valley’s high-end real estate market kept right on smoking. Catherine Marcus, who engineered the sale of a Los Altos Hills home to Russian venture capitalist Yuri Milner for a record-shattering $100 million this year, said Dow drops of 634 and 519 points Monday and Wednesday didn’t result in a single canceled contract — including a $7 million sale.

“No one’s walking away,” Marcus said. “When Lehman Brothers went under, a lot of people did back out. It was like someone turned off a spigot. No one seems to be turning off the spigot here.”


Photo Credit: Golden Gate Bridge and San Francisco skyline By arnybo / FlickR