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Economic Trends in Silicon Valley

Silicon Valley is known for its high-tech businesses, technological innovation and use of social media in business. San Jose is the largest city in Silicon Valley and the 10th largest in the United States. Other major cities in Silicon Valley include Cupertino, Menlo Park, Mountain View, Palo Alto, Santa Clara and Sunnyvale. Silicon Valley has a high level of economic activity, especially in San Jose. The Silicon Valley Business Journal reports that this area has the world's third highest Gross Domestic Product (GDP) after Zürich, Switzerland and Oslo, Norway.

The word "silicon" in Silicon Valley refers to the large number of silicon chip manufacturers that were founded in this area when integrated chips and similar technologies were being commercially developed during the 1970s. The “valley” part of the name is a reference to Santa Clara Valley, which is the general geographical region. This economic hub has diversified considerably since then, although it's still strongly based on technology. Many Fortune 1000 companies have their headquarters in Silicon Valley, primarily those in the high-tech sector. Firms based in Silicon Valley account for one third of the venture capital investment in the United States, which has helped Silicon Valley become a vital hub for start-ups in high-tech and scientific development.


The Bay Area is currently experiencing an economic boom, including Silicon Valley. The number of available jobs in the Bay Area exceeded 4 million for the first time in 2018, and August was the strongest month for hiring in the past two years. The high-tech sector continues to drive this economic growth.

Santa Clara County posted solid employment gains in August by adding a total of 2,500 jobs. The East Bay added 5,600 positions, and the San Francisco-San Mateo metro area added 2,300 jobs. This marked the 16th consecutive month the Bay Area has experienced a net increase in employment, after adjusting for seasonal variations. Economist Mark Vitner of Wells Fargo Bank adds that the employment figures for Santa Clara County are remarkable.


Silicon reports that Silicon Valley’s economy continues to thrive despite the high home prices and heavy traffic that continue to increase steadily. The growing number of residents who are employed or seeking employment is an important barometer for this area's economy. For example, the labor force in Santa Clara County increased by 11,100 people during the one-year period ending in August 2018, which is equivalent to an annual increase of 1 percent. In comparison, San Francisco's labor force remained flat during this period, while the labor force of East Bay actually decreased by 0.1 percent.

The total number of people who were employed in Santa Clara County also increased by 3.8 percent between August 2017 and August 2018, which was more than twice the national average of 1.6 percent for this period. In comparison, employment in San Francisco increased by 2.1 percent, while employment in the East Bay rose by 1.8 percent.

Business Sectors

The strongest business sector for Santa Clara County during August 2018 was in technology, based on job gains. This sector gained 1,800 jobs, while health care was the second highest with a gain of 1,100 jobs. The weakest sector in Santa Clara Valley based on employment was government, which lost 1,700 positions.

In comparison, the greatest job gains in East Bay were in government, which gained 1,700 jobs. This area also added 1,500 jobs in health care and 1,200 positions in miscellaneous service industries such as beauty, laundry and vehicle repair. Only 700 high-tech jobs were added in East Bay in August. Construction was the hottest sector in the San Francisco-San Mateo area, which gained 1,100 jobs in addition to 700 retail positions. This area also lost 1,100 jobs in hotels and restaurants and 300 high-tech positions in August.

If you want to discuss how you might fit into the Silicon Valley business climate, whether buying or selling your business, contact a LINK Silicon Valley business broker today. LINK’s professional business brokers can help you evaluate your next steps.  Contact LINK Silicon Valley at (925) 399-1891 or email to today.