It's that time of year again. Each November I publish my “Bay Area Economic Engine". In it I summarize the the business news and events that drive our local Bay Area economy, and I project the economic direction of our major Bay Area industries in the upcoming year. You can download a copy of my economic engine by clicking here.
 |
| Click to download |
The Bay Area recovery continues in 2012
The Bay Area added 83,800 jobs between September 2011 and September 2012.
This job growth was 30.4% of the State’s and 4.4% of the Nation’s. This compares to a population base that is 19.9% of the State’s and 2.4% of the Nation’s.
The boom in San Francisco and Silicon Valley is slowing - but beginning to spread to the North and East Bay; creating jobs for commuters and, to a lesser extent, local jobs.
Leasing brokers report that the super-hot markets in San Francisco and Silicon Valley are now “taking a breather”. Based on my review of trends, I expect more than just a breather in 2013. Taking a breather or the fallout of disruption?
Much of the 2010–2012 surge in employment and demand for space was came from companies with disruptive technologies... tablets, smart phones, server virtualization, streaming video, software-as-a service, free games, cloud computing.... as these innovations won in their market they replaced something will loose market. In 2010-2012 the winning companies were launching and growing while the losing companies were still in place.Now we are beginning to see the fallout from the disruptive technologies. Upcoming layoffs are being announced for chip manufacturers, network equipment manufacturers, PC’s, console video game companies and companies that produced products made redundant by the smartphone; including cameras, watches, tape recorders, navigation systems, MP3 players, newspapers, answering machines, game players, calculators.
Luckily for the Bay Area many of the losers are not local, consider for example recent losses for Nokia, RIM, Nintendo, Panasonic, Sharp and Sony.
But the Bay Area will see lay-offs in our older-school tech companies, such as HP, AMD, Cisco, Intel, and Yahoo. And there will be an impact from a recession in Europe, a slowdown in China and cuts in State and Federal discretionary spending.
