Despite reports of the escape, Silicon Valley remains the world’s technology center, with new data continuing record-breaking investment in the industry in 2020, resulting in an overall decline in employment and population in the region. Indicates that you have not.
The attention-grabbing turnover of wealthy executives and investors like Elon Musk, Oracle’s ORCL (-1.51%) and Hewlett Packard Enterprise’s HPE (+ 1.36%) raises questions about the future of California’s tech powerhouse. I was thrown. Little evidence of the trend was found this week. Instead, the main impact of the COVID-19 pandemic in the San Francisco Bay Area in 2020 is with those who have it, as all the money is still flowing into a few pockets as the damage from the coronavirus has decreased. The gap between those who are not is widening. community.
Russell Hancock, CEO of joint venture Silicon Valley, which released this week’s annual Silicon Valley index detailing what happened in the region last year, said today that the pandemic was dying for the poor. We must frankly admit that we have made the rich richer.
In addition to record venture capital investment in Bay Area start-ups, the report showed a surge in market capitalization of public technology companies and a default initial public offering. Silicon Valley’s population, defined as Santa Clara and San Mateo counties, is nearly flat annually, at 0.02%, amid concerns that technicians may be expelled from the Golden State as companies allow remote work. Has increased.
Although overall immigrants were tracked in San Francisco, the majority of people who left the region’s most prominent cities last year remained in the state, according to data released by the San Francisco Chronicle this week by the United States Postal Service. This is consistent with what the Silicon Valley Index shows. In the last few years, 59% of people who have left the valley have stayed in California and have moved up and down the state.
At a press conference about the index, joint venture research director Rachel Masaro thinks we can all calm down. It was a place of innovation. It was a place to house these influential companies. No significant loss was seen between them.
In short, the region’s largest businesses and highest-paying people work dramatically, and white-collar workers, who often earn more than three times the income of the service industry, work remotely and are deadly at low rates. Protected from the virus-wage workers were unemployed and sick, and the lack of a safety net shed unequally severe light.
Hancock said it was a story of two economies. There are two stories.
According to the report, the market capitalization of companies in Silicon Valley and San Francisco increased 37% last year to $ 10.5 trillion. This is because the market capitalization from companies such as Tesla’s TSLA soared to -0.77%, and the market capitalization soared by more than 700%. 2020; Apple Inc. AAPL, + 0.12%, 77% increase, Facebook Inc. FB, -2.91% increased by 30%, Google GOOGL, -0.81% experienced 28% increase.
Big Tech continued to grow in other ways as well. In addition to the above, technical employment of the top 15 companies in this area, including other large companies such as Intel Corp. INTC, + 2.27%, Salesforce Inc. CRM, -0.18%, Cisco Systems Inc. CSCO, -1.42% Has reached the end of the year at 3.7. Employment growth rate despite the loss of hundreds of thousands of jobs across the region. There were also doubts about the impact of telecommuting shifts on commercial real estate, but the largest companies in the region are on existing projects, such as Google planning a major development in San Jose, California. Continued construction.
The next generation also received a record total investment. Snowflake Inc. SNOW (+ 0.08%), DoorDash Inc. DASH (+ 2.95%) and Airbnb Inc. ABNB are all based in the Bay Area and are the three major US initial public offerings in 2020, excluding special acquisitions. It was an initial public offering. According to the Silicon Valley Index, even in the booming years of IPOs, Silicon Valley outperformed other years. IPOs from the Valley in 2020 increased 117% and SF issuance increased 101%, but IPOs generally returned 80% last year.
2021 IPO: After a year of striking pandemic offerings, these tech companies expect to continue.
It’s also a record year for venture capital, according to the report, with funding for companies in Silicon Valley and San Francisco increasing by 8% from 2019. Of the $ 123.6 billion of US VC funding in 2020, $ 26.4 billion went to Silicon Valley, $ 20 billion to San Francisco, and $ 67 billion to California. Much of that investment was invested in well-known start-ups, including Bay Area unicorns (at least $ 10 billion worth of private companies) such as Stripe, Instacart, and Robinhood.
Other, less positive stories
As Big Tech thrives and continues to be funded for potential additions to its group, the gap between those who thrive from its performance and the poor residents of Silicon Valley is wider than ever. The index shows that it is.
As of last Friday, 2,069 people in the area had died of COVID-19, Hancock said. Mortality was highest among Native Hawaiians / Pacific Islands, Black / African Americans, Hispanics or Latinos, respectively. Mortality rates were much higher in poorer areas than in richer areas, such as most of the eastern part of San Jose, which is of Latin descent, according to Mercury News.
Low-wage workers had to endanger their health in order to lose their jobs or stay in their place.
According to Hancock, the pandemic has wiped out our service sector and the face-to-face economy. There is a real genocide there. People are losing their livelihoods.
By mid-2020, local community infrastructure and services jobs had declined by 54%. Hispanics were more likely to offer 1.5 times more unemployment benefits than whites, Hancock said. In December, more than 626,000 households in the Bay Area, including about 200,000 in Silicon Valley, were at risk of eviction or mortgage delinquency, according to the index.
See: How long will Silicon Valley employees who cannot work from home continue to receive salaries?
For companies such as Salesforce Inc. CRM, -0.18%, Twitter Inc. TWTR, + 0.03%, shuttle drivers driving technicians to various offices around the Bay Area are permanent or most remote to employees. Says you can work with. Stacy Murphy, business representative of Teamsters Local 853, which represents about 800 shuttle drivers in the Bay Area, said the time was or was severed. Some drivers are still temporarily dismissed, but others are no longer receiving wages and most drivers do not know when they will be able to return to work.
Murphy said the union is in constant debate and advocates continuing to pay drivers.
Some data from the index show that concerns about threats to the region that reigns as a technology center are not unfounded. Silicon Valley’s population did not decline in 2020, but the trend of immigrants continued for many years. Nevertheless, the index shows that net immigrants in 2020 were about half of the departures from the region in 2001 after the burst of the dot-com bubble.
The index also shows that the employment growth rate of the top 15 largest tech employers in Denver (14.7%) and Sacramento (14.5%) is almost four times higher than the Bay Area’s 3.7%. In addition, the Bay Area share of the same company decreased from 26.1% in January 2020 to 23.9% in December of the US workforce. Although the rate of increase was small, the Bay Area added a total of more tech jobs than other metropolitan areas.
Metropolitan areas such as Florida and Texas boast as the next big technology hub as businesses and executives move to places like Texas. In places like Texas, the HPE of Oracle and Hewlett Packard Enterprise, + 1.36%, are moving their headquarters despite the remaining Oracle employees. In the bay area, Hancock pointed out.
Moving other companies or deciding whether an employee should return to the office will affect the rent of pending construction projects and nearly stable office space.
The Bay Area Council, which includes local businesses as members and advocates business-friendly policies, has launched a business environment initiative, concerned about companies leaving the region.
Patrick Colorman, research director at the Bay Area Council Institute for Economic Research, said that wouldn’t change anytime soon. The bay area will not become a ghost town in 6 months. I was asking myself if this would be a long-term and significant change.
These changes affect the quality of life in the Bay Area, as local governments are under budget. According to the SV Index, Silicon Valley’s revenue is expected to decline by an average of 5%, primarily due to the effects of the pandemic. According to the San Francisco Chronicle, sales tax revenue in the second quarter of 2020 was down 43% year-on-year. The San Francisco Chronicle investigated the impact of a pandemic on a city that was once a busy downtown area.
What happens to a large company, whether it retires, stays, or changes its telecommuting policy, also affects small businesses.
Alicia Villanueva, owner of Alicias Tamales Los Mayas, a Tamale plant in Hayward, California, and Lynna Martinez, owner of Cuban Kitchen, a restaurant in San Mateo, California, said they avoided spawning despite a catastrophic decline in earnings. Turn off employees for the Paycheck Protection Program (PPP) and other loans.
Both businesses relied heavily on catering to Bay Area tech and other companies.
Hundreds of clients, including Oracle, Facebook, Google and Comcast CMCSA, accounted for -0.88%, Martinez said. I placed 100 to 300 orders before the store opened at 11:00 am. Then, in the March and April boom, 50% of the business was lost.
The two women said they needed to adjust and make up for the lost business as much as possible. According to Martinez, her catering business was probably one tenth of what it used to be. Villanu Evas’ son delivers Tamale to a school district more than 60 miles away.
Villanueva, who has 21 employees, said she would get up at 2 am to get ready and deliver to Vacaville at 5 am.
Martinez and her eight employees are more dependent on referrals and she is currently considering a franchise.
She said the pandemic forced us to target wider and more decentralized bases. In a way, this was a good challenge for me as a business owner who wanted to pursue the idea of having a franchise.
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