Silicon Valley in Transition

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An interesting study was published this month on the workforce implications of the renewed growth of Silicon Valley’s cluster of IT industries, the Information and Communications Technology (ICT) cluster; networks, computers, chips, telecom, software, hosting, social media, etc.
For a copy of “Silicon Valley in Transition” go to  http://connect.one-stop.org/lmi/TechStudyFullReport_03.pdf

Here are the highlights:

• The ICT sector added 13,000 jobs in greater Silicon Valley (now defined to include San Mateo, San Francisco and southern Alameda counties) since 2009.

• The ICT sector is conservatively estimated to grow 15% over the next two years, adding around 20,000 new jobs.

• Companies are already finding it hard to recruit in certain engineering fields.

• Average salaries in the ICT cluster are growing again and now exceed $150,000/year.

• Silicon Valley is a magnet for start-ups and venture capital because of its deep pool of highly skilled talent. This talent in Silicon Valley is seen as more flexible and willing to adopt and learn the new technologies that cannibalize the old. Without “positive destruction” Silicon Valley would not be what it is today.

• Even as other tech centers have proliferated, Silicon Valley share of total US venture capital investment has steadily grown, now exceeding 40% of the nation’s total VC funding. The Valley’s “infrastructure for innovation” attracts companies such as Facebook to relocate here and companies such as Groupon and Wal-Mart Online to move engineering here.

• The reviving IPO market (Pandora, LinkedIn, and soon Twitter and Zinga will go public), is letting the local VC players cash-in, so Silicon Valley’s share of the VC pie is likely to grow further.

 

Dear Amazon, you have to be kidding!

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This just in....
Amazon has filed a petition in California for a ballot measure asking voters to repeal the law passed in late June that was designed to force online retailers like Amazon to collect sales tax. Amazon will hire the firms that will collect over 430,000 signatures by late September to qualify the referendum for a statewide ballot on Feb. 7, 2012.

Paul Misener, vice president of public policy at Amazon, in a statement sent to journalists claims "This is a referendum on jobs and investment in California...."

Mr. Misener is correct. It is a referendum on jobs in California. Giving online sellers a 7-9% price-advantage over local California businesses, will shut down local businesses and will drive jobs out of California. If you need evidence, ask the19,000 employees at Borders. Borders was driven into bankruptcy largely due to this uneven playing field.

“It is in every Californian’s interest for online and store front businesses to play by the same rules," Betty Yee, first district member of the California Board of Equalization, said in a statement. "I strongly doubt Californians will support a loophole promoting out-of-state jobs, when holding Amazon.com accountable to the same rules as everyone else protects California’s economy.”

Let's hope so.  Support your local retailers who pay real estate taxes to our cities and collect sales taxes for both our state and cities.  Boycott Amazon.com.

See http://www.bizjournals.com/mobile/sanfrancisco/blog/2011/07/amazon-strategy-fight-california-tax-law.html

Time to boycott Amazon.com?

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A key component of California’s 2011-2012 budget is to require online retailers to collect sales tax. Amazon is not taking this lying down and sent an email June 29th, 2011 severing ties with all its California affiliates (not me - "Capital Wisdom” has no sponsors or advertisers). Amazon is refusing to pay the tax and is preparing a legal challenge.

It is time for us to say, “Enough!”  And, we in the commercial real estate industry need to be the loudest voice. 

We, who make our living from the bricks-and-mortar industry, see the effects of an uneven playing field on retail tenants.  Our bookstore chains are dead or dying and our electronics stores are sick.  You can download a bar-code-reader app to your smart phone, stand in the aisle at Best Buy and with a few clicks, order that exact model flat-screen TV from Amazon, delivered to your front door and save tens or hundreds of dollars in taxes. 

Competition is great, but true competition requires a level playing field. 
Bricks-and mortar retail stores pay rent to our industry.  But more than that, they pay sales tax and property taxes to our States and local communities; they hire our young people; they sponsor our little league teams and support local causes and charities. 

You might think a bricks-and-mortar retailer could open its own on-line outlet and achieve the same benefit as Amazon.  No; they can only avoid collecting sales tax if they have no stores in that state. 

The consumer is responsible for paying its own sales taxes on on-line purchases.  A system that requires people to voluntarily tax themselves: How stupid is that?

Write to your Congress person
Tell them to pass legislation to require all on-line retailers to collect sales tax based upon the sales tax-rate for the zip code where the goods are to be delivered.   Tell Congress to ignore the screaming that “This is too difficult!” These are automated systems – it's not that hard to do.

When dot.com retailing started, the San Francisco Bay Area was a center of this activity.  At that time I supported a special status for these retailers.  Ignoring sales tax was a way to get this fledgling industry born.  

Amazon.com went live in 1995; it is now a 16-year old:  We have a powerful, self-centered and headstrong teenager on our hands. Time to grow-up.  Time to shop local. Time to boycott Amazon.com.