A veritable "invasion of unicorns" bolstered by a surge of "angel investors" is hitting Silicon Valley big time this year, according to a new report detailing economic trends and reality in the region.
No, this is not a fantasy, even though unicorns are exceedingly rare this side of myth and imagination, songs and children's books.
In the real world, of which Palo Alto is usually considered a major part, a "unicorn" is a private company that has amassed a worth of $1 billion or more. That amazing sum has usually been achieved with the help of "angel investors," defined as individuals or investor groups that have invested $100 million or more in the once-mythical-seeming sci-fi world of high-technology.
The annual "Silicon Valley Index" was unveiled Feb. 15 at an annual "State of the Valley" conference in San Jose — attended by more than 1,300 corporate leaders, government officials, media and citizen observers. The conference is sponsored by the industry-based Joint Venture Silicon Valley, which has published the Index early each year since 1995.
The Index is a comprehensive examination of trends and statistics that comprise the economic world of Silicon Valley, a region that encompasses Santa Clara and Alameda counties and a large portion of the San Francisco Bay region generally.
But the report is vastly more than an annual yearbook of trends and statistics. It is candid in its assessments of real-world trends, bolstered by statistics and observations that sum up the actual day-to-day-pocketbook world of the region.
Five years ago, the Index detailed a reality affecting many thousands of residents and workers when it reported that the "middle class" in "The Valley" was shrinking as an economic class. Instead, the lower economic end — those struggling to survive in a high-cost area — was growing while the upper end, the vastly wealthy, was also expanding, creating a huge sinkhole gap in between.
The cost of housing is a significant focus of the Index this year, reflecting the fact that housing costs are the highest in the nation. The overall average monthly cost of housing is $2,351 while the average rental cost is $2,911.
"We need more housing. We needed it yesterday," Joint Venture CEO Russell Hancock said of the crisis. "We need to be building all kinds of housing. It needs to be dense, it needs to be vertical, it needs to be situated in reasonable proximity to mass transit options.
"We need to be strong, forceful advocates for that kind of housing."
But Hancock is aware of the challenges, including resistance of local communities to a surge in housing development, such as the widespread resistance in the early 2000s when the Association of Bay Area Governments published a housing-allotment report by community, based mostly on where the jobs were.
Palo Alto, which has been job-heavy since the fast-growth 1950s and 1960s, was far up the list. But the city is also known for being environmentally conscious with a citizenry averse to intense development anywhere.
Hancock acknowledges that Palo Alto is "already fairly intensely built. There's not a lot of developable land.
"But we have built more around California Avenue, so Palo Alto is moving in the right direction," he said in a phone interview this week.
Besides, housing is not just a Palo Alto problem, he noted: "It is a regional issue and everybody has to do their part." How big a part is yet to be determined, despite literally decades of discussion and debate locally.
One solution is to build more housing in outlying areas, where there is more open (and affordable) land.
But that alternative is dependent on having better transportation from home to workplace — something better than spending three or more hours on jammed freeways, burning high-priced fuel and polluting the air.
Such outlying areas have yet to be really heard from about a major surge in housing construction, but assuming a better level of acceptance than one might find in Palo Alto and neighboring communities it is worth considering.
If, that is, transportation can be improved.
Enter the challenges of electrifying CalTrain on the Peninsula and moving forward with the pet project of former Gov. Jerry Brown: high speed rail.
New Governor Gavin Newsom has already begun to cut back the visionary concept of super-fast trains zipping back and forth from San Francisco to Los Angeles. His plan at present is to run the line from San Francisco to, say, Fresno or Bakersfield. Newsom now says a reason for high-speed rail is to promote the economies of the valley areas.
Hancock agrees with the idea of high-speed rail, but with additional elements — namely that getting people back and forth from home to work efficiently will perpetuate the economic miracle of Silicon Valley, keeping unicorns off the endangered-species list.
"That's a better style of living than people spending three hours driving from Livermore, Stockton, Salinas," he said of the auto-clogged freeway alternative.
High-speed rail "relates back to housing," he notes.
"It makes it possible for people to locate where housing is affordable because they can hop on a train and still get to jobs in Silicon Valley. They could be living in Merced or even Fresno and still get to work in 45 minutes."
This year's Index was compiled and written (except for the cover letter by Hancock) under the supervision of Rachel Massaro, of the spinoff group, Joint Venture Silicon Valley's Institute for Regional Studies. Her vivid writing illuminates virtually every page.
The Index is available online at jointventure.org.
Having reported on Joint Venture Silicon Valley since it was headed by Rebecca Morgan, prior to Hancock's coming aboard as CEO in 2003, I was not surprised by its excellence.
Anyone who needs or desires to know about the region where they live or work ought to at least peruse this remarkable work. In my view, it should be expected, if not required, reading for every government official in the region.
It also would be a rich source of real-world knowledge for high school, community college, college and even graduate students, with or without unicorns.
Former Weekly Editor Jay Thorwaldson can be emailed at [email protected]