Although Silicon Valley continues to create jobs and increase its economic output, boosting STEM education is critical to the region's long-term economic health, a report from the Silicon Valley Competitiveness and Innovation Project finds.
A joint effort of the Silicon Valley Community Foundation and Silicon Valley Leadership Group, the project analyzed twenty-two innovation economy indicators in tech-heavy regions across the country, including talent; risk capital and R&D; idea generation, commercialization, and business innovation; business competitiveness; quality of life; and access to opportunity and jobs. The report based on that analysis, Silicon Valley Competitiveness and Innovation Project – 2016 Update (26 pages, PDF), found that in 2014 output and jobs in the region increased some 10 percent and 7 percent on a year-over-year basis, with innovation industries accounting for 25 percent of all jobs, the largest percentage among the regions examined. Immigration also continued to play a critical role in the region, where 58 percent of STEM workers are foreign-born. At the same time, more residents left for other parts of the U.S. than moved into the region from other parts of the country, a possible sign that the region is losing home-grown talent.
The study also found that the number of STEM degrees conferred by institutions in the region is growing more slowly than in other parts of the country. Education is a critical issue for the long-term health of the region's economy, the report's authors write, given that in 2015 slightly less than half (49 percent) of the region's eighth-grade students met or exceeded new state standards for math proficiency, with significant disparities by race and ethnicity. Indeed, only 20 percent of African-American students and 21 percent of Latino students met or exceeded those standards, compared with 79 percent of Asian and 66 percent of white students. The report also found that other factors, including the slowdown in IPO issuance, a rising cost of living, and slower growth in R&D expenditures, are squeezing the region's long-term innovation assets.
To address these and other issues, the report calls for policy changes aimed at boosting support of STEM education and high-quality pre-K education, increasing R&D and immigration of high-skill individuals, improving regional housing and transportation infrastructure, and reducing regulation on business.
"Silicon Valley's economy continues to outpace economic growth in many parts of the country – but our updated SVCIP report underlines that we still struggle with rising housing prices and severe transportation issues that cause many people to leave the area," said SVCF president and CEO Emmett Carson. "We will keep pushing for public policy leaders to address these and other issues so that Silicon Valley will remain both the world's center of innovation and a great place for all to call 'home'."