Today's New York Times article, Report Warns Silicon Valley Could Lose Its Edge, looks to the factors that have slowed economic recovery in Silicon Valley. The article attributes the down economy in large part to the recession, reporting that Silicon Valley lost 90,000 jobs from the second quarter of 2008 to the second quarter of 2009, and that unemployment is higher than national levels. Other measures of the down economy are the decrease in the number of patents from last year, as well as the fact that last year saw the lowest number of initial public offerings of stock in technology companies since 1970.
Discussing how the Silicon Valley economy may recover through new innovation and green technology, the article points out that over 60% of Silicon Valley scientists and engineers are foreign-born. However, the region saw a decrease in immigration by 34% last year. Countries are luring their own citizens back home, as discussed in an earlier post "Silicon Valley Immigrants Included in Talent Exodus". At the same time, the U.S. is increasingly making it difficult for temporary foreign workers to come on an H-1B or L-1 visa, as well as subjecting intending immigrants to long queues.
The article highlights one of the key solutions to this "brain drain" problem - increase the level of education to U.S. students so that the U.S. is not as reliant on foreign talent. However, the article points out that 5 percent fewer California high school graduates are meeting requirements for entrance to state universities, the number of science and engineering degrees has leveled off and California general fund spending on higher education dropped 17 percent last year.