While acknowledging the Bay Area holds a productivity edge with respect to the tech sector, which has been responsible for 100% of the Bay Area’s growth since 2005, and that the Bay Area has maintained its distinctiveness as an innovation hub, the latest Bay Area Council Economic Institute’s Economic Profile raises a few concerns.
While the resilience recently displayed by the Bay Area and its innovation economy is impressive, the benefits are not being evenly felt. Employment levels remain near their lowest point in fifteen years, and jobs are particularly scarce for blue collar workers, who account for only 16% of the current employment. Budget shortfalls are creating strains. Education, infrastructure, and the business environment pose serious challenges to the Bay Area’s ability to maintain its competitive edge.
Today, although the economy has largely persevered, the increased intensity of these underlying structural problems poses a challenge to the region’s ability to sustain economic leadership in the longer term. Overall economic growth has been anemic when one takes a longer view, at only approximately 2% over the past 5 years. The region needs to look to itself to truly address these problems.
In the words of the Council, while the outlook “does not suggest that the Bay Area is on the verge of an economic crisis” (phew!), it does recognize “a pressing need to work through the region’s many challenges.”
∙ Bay Area Economic Profile: March 2012 [bayareaeconomy.org]