Bay Area economy picking up?
While one would hardly expect The San Francisco Business Times to go negative on the Bay Area economy, this story about the job market talks about the demand for middle managers, mainly in non-software areas; in fact, quite possibly the non-tech workers who were priced out of the housing market during the boom.
The article also mentions the 370,00 jobs lost since 2000. The Census Bureau says that 334,243 people left the Bay Area (Marin, Contra Costa, Alameda, San Francisco, San Mateo, Santa Clara counties) for other states between July, 2000 and July, 2003. They haven't released county-by-county figures yet for 2004, but they say California as a whole lost 144,362 people to other states between July, 2003 and July, 2004. Anecdotally, it seems like a fair amount of that is people continuing to leave the Bay Area. When I head off to Singapore, that will count as international migration which is actually against the trend: the Bay Area is still gaining people from other countries and through births, so the population as a whole is rising.
Anecdotally, the software work that's here seems to be in consumer media like Google and Electronic Arts. Otherwise, the software industry left seems to be a product of government regulation. I was talking to a Chain Reaction customer who pointed out that biotech software development can't be done overseas because the FDA needs to be able to physically inspect the processes. There is also work in enterprise software to help with security and compliance (Sarbanes-Oxley and the post-Enron rules). If a Democratic administration were in charge, I'm sure the Republicans would be calling this red tape.
I suppose it's inevitable that the PC software industry had to grow up sooner or later and become stodgy and entrenched. The settlement of the Microsoft anti-trust case killed off any hope that there would be competition in basic office software. The merger of Oracle and PeopleSoft means that only big established players should bother in that space, too. IBM selling off its PC division to a Chinese company shows that not even IBM can command a premium for computer hardware anymore. It was only a matter of time before smart Indians and Chinese set up shop to develop software and offer services back home.
Silicon Valley of 2005 is quite different than the Silicon Valley I moved to in 1995. Back then, it wasn't completely decided that business desktops would be Wintel machines. Not every software product was based on the Internet—there were CD-ROMs, PDAs, video game platforms, and, of course, desktop software for business and consumers. Before the boom, there was diversity; it seemed everybody I knew was working on something interesting. The sense I had that something big was about to happen proved to be right. I feel the same way about Asia and Singapore in 2005. I'll know if I was right in another 10 years.
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