2013 Snapshot of Santa Clara Tech Industry

Bridge Capital Holdings's picture
Printer-friendly versionPrinter-friendly versionPDF versionPDF version

The trends in the tech industry in Santa Clara County will determine much of its economic landscape in the new year. In a Regional Intelligence Report for Beacon Economics, Chris Thornberg explores the current shape of the local tech sector. He considers many factors in his report, from the local to the national.

In terms of large currents in the field, the shift away from hardware to software continues - measured by jobs, real estate utilization and more - is evident. In the South Bay, some of 2013's biggest job creators were in the Information and Professional and Business Services industries, while Manufacturing let go of the most jobs. Net employment growth was, however, even for hardware and software businesses in the area, indicating some parity between them that may continue in the year to come. This may mean the trend of more employment and investment in software is short-lived, or that those players in the hardware manufacturing sphere that have established themselves will stay in the area indefinitely.

"Entrepreneurship, according to one key measurement, has been rebounding," Thornberg writes. "Local venture capital, which declined by 5.6 percent in 2012, to $11.1 billion, is now on pace to increase by 4.2 percent in 2013, based on figures for the first three quarters of the year." This is despite a drop in the prices of tech-related goods and services, which declined 1.7 percent year-over-year in 2013. Software and biotechnology firms are receiving most of the venture capital investment in the Santa Clara County area. While improving, venture capital funding for computer and peripheral manufacturing is a small portion of the overall venture capital investment in the region.

Nationwide trends

The size of the tech industry in the South Bay means national trends in the field have a significant impact on how Santa Clara County's economy performs. In 2013, exports of computers and electronic goods declined 0.4 percent, as did the share of such products departing from California ports.

Manufacturers are also noting a decrease in demand for technological goods, though the value of their inventories remained unchanged from 2012. However, Thornberg asserts, "Indicators that take into account high-technology investment, production, and sales show that the demand for high-tech goods has actually increased over the year."

As this is the case, investors have not taken many chances with the high-tech industry this year, though the direction of the market in 2014 is difficult to predict.

News Source : 2013 Snapshot of Santa Clara Tech Industry

Copy this html code to your website/blog to embed this press release.