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SVLG CEO analyzes strengths and weaknesses of the Valley

Tuesday, December 12, 2006

Silicon Valley is still the pre-eminent technology region of the world, but the Valley is facing tough challenges which it must overcome, in order to remain the center for global innovation. This is the message Carl Guardino, president and CEO of the Silicon Valley Leadership Group (SVLG), brought to Realtors and affiliates at the Dec. 11 Menlo Park/Atherton District meeting.

Silicon Valley has many strengths, said Guardino. Silicon Valley is ahead and remains "incredibly competitive" in technology and innovation, is consistently number one in venture capital funding and in clean technology. The Valley has a diverse mix of technology and life science industries and is home to over 7,000 technology firms.

Best of all, said Guardino, Silicon Valley is home to the best workers of the world. "Silicon Valley workers are 2.5 times more productive than the national average," Guardino revealed.

He also noted that three of the top 20 universities in the country are located in Silicon Valley and the Bay Area.

"When trained here, individuals are most likely to stay, live and invest their lives here," Guardino said.

But the Valley also needs to overcome some weaknesses if it wants to remain the global center of innovation, said Guardino. He indicated that while the unemployment rate has dropped to 4.96 percent, the percentage of people who are unemployed here is higher than in other regions of the country. The Valley's housing opportunity index is only at 14.9 percent – which means less an 15 of every 100 families can afford  a median priced home in Silicon Valley. Because of its inadequate transportation system, other than New York City, Silicon Valley has the greatest annual congestion cost per person  - in terms of time on the road, delays, cost of gas. And the most critical and sobering weakness of all, said Guardino, student performance is down in K-12th grade education; in fact, other than Washington D.C., Silicon Valley students are ranked among the worst in the country in 8th grade math and sciences. Also, the area's regulatory and tax policies are not competitive with that of other states.

The key to Silicon Valley's success is in its spirit of innovation, and there are forces stirring towards this direction, said Guardino. He mentioned a number of partnerships that are promising.

SVLG is organized to involve senior managers of member companies in a cooperative effort with local, regional, state, and federal government officials to address major public policy issues affecting the economic health and quality of life in Silicon Valley. SVLG, through the Housing Trust of Santa Clara County, and in cooperation with Realtors, builders and lenders has been able to raise $32 million in voluntary contributions, of which the first $23 million will go to assist 6,000 families – 2,000 first-time homebuyers and 500 teachers. It's a step toward the right direction, Guardino said, since the key to student success in the K-12 level is rooted in the region's educators.

Guardino mentioned through the Industry Initiatives for Science and Math Education (IISME), which seeks to transform teaching and learning through 8-week paid fellowships, 200 teachers work in technology firms in the summer. It's an opportunity for the teachers to transfer new knowledge to their students, but he noted, only 80 firms are currently participating in the program.

SVLG is also partnering with companies, local governments and non-government organizations to improve the transportation system, to make available capitalization funds to support energy cost reduction efforts by companies, to address the environmental and resource pressures in the Valley, to provide access to about 71,000 uninsured children in Santa Clara County and to promote research in biotechnology, biomedical innovation.

Guardino said he is encouraged by partnerships being formed with government that have led to the infusion of infrastructure bonds which will help strengthen communities. Various organizations are likewise engaged in dialogue with officials to help stabilize the state's fiscal picture. He encouraged Realtors and affiliates to look into these and other "opportunities for action."

"What is exciting is, even in tough times, we collectively provide the economic engine of the world," said the SVLG CEO. "This is where people look to success. We need to continue to be the innovation leader of the world."

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