As we stated last year, The Silicon Valley Competitiveness and Innovation Project (SVCIP) focuses on a subset of industries in the regional economy that are important export-oriented sectors with positive ripple effects on other parts of the economy. We call them “innovation industries” because innovation is their shared core business. While their products and services vary widely—from software to hardware, internet-based services to biotechnology, and many more—what they also share is a core need to operate in a supportive community environment, including talent, financing, and other resources. They directly account for 26% of the jobs in Silicon Valley, and their success is an important measure of how well Silicon Valley and other regions are providing an effective “innovation ecosystem.”
We hear a lot about competition for jobs, and how innovation industries are thriving in other regions like Seattle and Austin. What we find is that innovation is not a zero-sum game. Many regions can and do participate and thrive in the innovation economy. As the chart below shows, Silicon Valley and all the comparison regions continued to grow their innovation industries in 2016.
There has been a slight deceleration of growth in the innovation economy in Silicon Valley between 2015 and 2016. However, as the chart below shows, all of the specific industry sectors that comprise the innovation economy in the Valley continued to grow in 2016, except for medical devices. Whether the overall deceleration can be chalked up to volatility or lifted up as evidence of the beginning of a slowdown is too early to tell. What we do know is that over the long-term, despite the enduring challenges of housing, transportation, and educating a skilled workforce, Silicon Valley has continued to thrive as an innovation economy. Let us know what you think is likely to happen next.
In 2017, Silicon Valley’s students made minimal progress on key statewide exams that measure proficiency in foundational skills and readiness for future education, including 3rd grade Language Arts, 8th grade Mathematics, and 11th grade exams for both subjects.
This year about the same percentage of the Valley’s 8th graders met or exceeded the Smarter Balanced* state standards in mathematics (53.3%) as in 2016 (53%). This is after a jump from 49% in 2015 in the share of local 8th graders who met the math standards. The pattern was similar for 3rd grade language arts. About the same percentage of Silicon Valley 3rd graders met or exceeded state standards in language arts in 2017 (55.1%) as in 2016 (54.7%), after rising from 2015’s figure of 51.7%.
Silicon Valley does continue to outpace California by a wide margin in 2017. Just as in 2016, only 36% of California 8th graders met the math standard compared to 53% of Silicon Valley 8th graders.
What remains striking is the large achievement gap by ethnicity. Only 26 percent of African American and 24 percent of Hispanic or Latino 8th graders met or exceeded state standards on the Smarter Balanced mathematics exam (and the latter was down from 25% in 2016). At the same time, 82 percent of Asian students and 69 percent of Caucasian students met or exceeded the standard.
What about Silicon Valley students who are getting close to graduating from high school? Overall, less than half of the region’s 11th graders (48%) met the Smarter Balanced math standards in 2017. While this performance is much better than the California average (32%), the fact remains that more than half of Silicon Valley students who are about to either enter the workforce or postsecondary education are not proficient in mathematics. Moreover, only 85% of local 11th graders took the Smarter Balanced exam in 2017, down from 91% in 2016.
Again, there are substantial differences by ethnicity. Only one in five African American and Hispanic or Latino 11th graders in Silicon Valley (19%) met or exceeded the math standard in 2017, compared to 61% of Caucasian and 78% of Asian students.
In 2017, just over 10,000 Hispanic or Latino 11th graders took the Smarter Balanced mathematics exam in Silicon Valley, and only about 2,000 scored proficient or higher. About 5,400 Hispanic or Latino 11th graders didn’t meet the standard in Language Arts. And, Hispanic or Latino students were the largest group of test takers in Silicon Valley (36%). This means that although many Silicon Valley innovation companies are hungry to employ home-grown talent, the largest group of test takers in our region are neither STEM-workforce ready nor, if going to college, prepared to major in postsecondary STEM fields.
In aggregate across all ethnicities, out of about 29,000 11th grade students who took the exams in 2017, almost 15,000 were not proficient in math and about 9,000 were not proficient in Language Arts. Thousands of students are preparing to leave high school ill-prepared for work or postsecondary education. Moreover, when we step back and observe preparedness by ethnicity, it’s painfully clear that students of color are in particular being left behind in one of the most prosperous regions of the country.
One other point. Our math achievement gap is actually larger than the California average. Our gap between the lowest and highest performing groups is 60%, while California overall is 56%. If our regional economy requires a higher level of STEM-related skills because of its higher concentration of innovation industry jobs, and if we value increasing diversity in the workforce and providing local youth with the opportunity to participate in those jobs, then we clearly must up our game substantially.
Let us know what you think needs to be done.
*Smarter Balanced is an assessment system developed to align with the Common Core standards, which are “challenging students to understand subject matter more deeply, think more critically, and apply their learning to the real world. To measure these new state standards, educators from Smarter Balanced states worked together to develop new, high-quality assessments in English and math for grades 3–8 and high school. These Smarter Balanced assessments provide more accurate and meaningful information about what students are learning by adapting to each student’s ability, giving teachers and parents better information to help students succeed in school and after.” (see www.smarterbalanced.org).
John Melville is Co-CEO of Collaborative Economics.
Tech companies are not the only ones who would benefit from closing the 8th grade math achievement gap. This is a major concern for parents, as well.
My daughter, who is mixed race, just started 6th grade, and is currently meeting standards in math. As both a parent and an education policy professional, I am very aware of the statistics surrounding young women of color in math. Holding her interest in math over these next two years will be critical, even if she chooses not to enter a STEM field later in life. Computational thinking and mastering basic algebraic concepts are key components to learning how to think critically. This is an important skill for professionals and workers of every stripe. Students who struggle with 8th grade math miss out on a computational thinking foundation that will serve them for the rest of their lives.
To ensure that my daughter stays on top of math achievement and doesn’t fall through the gap, her teachers work with her on a very individual level. They let her correct mistakes, elevating her self-efficacy and willingness to make errors, learn from them, and try again. We are fortunate to be in a district where every student’s learning is addressed in this way. It is wonderful that there are plenty of resources to support this style of teaching, though not every district has this capability.
Diversifying the STEM pipeline is one of the most pressing issues facing the Silicon Valley. Not only is a diverse workforce crucial important to raising up all of our communities in the tides of our robust local economy, but many see it as critical to business success. Diverse teams are often the most successful teams, according to McKinsey, and inclusive hiring practices have been adopted by some of Silicon Valley’s largest and most respected employers.
But herein lies the problem: how do companies source diverse, homegrown STEM talent? Often, there is a dearth of local, diverse candidates to meet the demand for a more inclusive workplace. This achievement gap can be traced back to one critical stage in K-12 education: meeting or exceeding standards in 8th grade math.
Students who meet or exceed these standards are far more likely to continue onto STEM educations and careers. Hence, increasing the number of local 8th graders who meet and exceed math standards is a good start. “Mission accomplished” would be all students, regardless of their background, arrive in high school with a solid foundation in math, paving the way for future success in STEM courses and the option to pursue it as a career.
As a region, Silicon Valley outperforms California in terms of how many students are prepared to tackle high school math. According to the SVCIP 2017 report, 53% of our 8th graders meet or exceed math standards, compared to just under 40% of Californians overall. Despite an overall higher percentage of high school math readiness, disparities between racial group and gender success remain pronounced in Silicon Valley math achievement.
Organizations and programs like ALearn; Elevate Math; and the Silicon Valley Leadership Group’s program partnership with the Mayor’s office, STEM with Mayor Sam, all work to provide added enrichment to catch students in middle school and keep them from falling through the achievement gap in 8th grade. Working in late elementary and early middle school, students who are not quite proficient, but also are not too far behind, can be identified and targeted for extra help and mentorship to bring them up to speed. Most of these programs also focus on parent and family involvement to build a learning community. These programs operating in high-need districts can be game changers for the students and families who participate.
Individual programs and efforts are heartening, and change lives. Robust public/private partnerships between industry leaders and school districts have been used to great effect in Oakland and San Francisco. These cities are building comprehensive computer science and STEM programs in their schools with significant financial and volunteer commitments from regional companies. Bringing Silicon Valley employers together with South Bay school districts to seed and develop a strong early intervention program could change the education and career trajectory for countless students. 8th grade math is the single most accurate bellwether for math success in high school and beyond. For more equitable outcomes, we must also think about the experiences students have with STEM leading up to the critical 8th grade assessment.
Alysa Cisneros is Education Policy & Programs Associate at the Silicon Valley Leadership Group.
While in-migration remains a critical source of experienced STEM talent for Silicon Valley, the attainment of STEM degrees locally is also growing in importance. Preparing people locally for Silicon Valley STEM jobs is not only important for the regional innovation economy, it opens the door for local residents to participate in technical careers with good and growing wages. And, it attracts talented students outside the region, who may become part of our STEM workforce in the future.
So, how are we doing preparing people locally to join Silicon Valley’s innovation economy?
Based on provisional data that has just become available from the National Center on Educational Statistics, it appears that our region is doing much better than we did just a few years ago. Moreover, during the 2015-2016 period, our growth rate for local STEM degrees awarded was the highest among the comparison regions.
As recently as the 2011-2012 period, 6,283 STEM degrees (bachelors, masters, and doctorates) were awarded by Silicon Valley institutions. By the 2015-2016 period, this number had jumped to 8,265—an increase of almost 32% over four years. And, the rate of growth has accelerated considerably—from an annual increase of 4.6% in 2013-2014 to 12% in 2014-2015 to 16% in 2015-2016.
This 16% growth figure, if confirmed by final data to be released at the end of the year, will be the highest among the comparison regions of Austin, Boston, New York, Seattle, and Southern California (see chart below). As recently as 2013-2014, our growth rate was the lowest among these comparison regions.
Big regions with many higher education institutions like New York and Southern California are naturally large producers of STEM degrees—with both awarding more than 28,000 of these credentials in 2015-2016. Boston is next at 14,491, with Silicon Valley at 8,265 ahead of both Seattle (5,658) and Austin (5,628).
While Austin produces the fewest number of STEM degrees among the comparison regions, on a per capita basis, it trails only Boston, with Silicon Valley possessing the third highest per capita rate of STEM degree production among the comparison regions.
There are many reasons for the Valley’s improving performance on STEM degree production. Existing institutions have grown their STEM offerings and focused more on supporting students to degree completion. Institutions based elsewhere have entered the region with new STEM degree programs. With a booming innovation economy, there is growing interest by local youth and adults to pursue STEM degree as well as greater numbers of students coming to the Valley from other regions. There are also growing efforts in the K-12 system and community colleges to put students on STEM education pathways that lead to bachelors’ degrees and beyond, including increased investment in growing homegrown talent from companies supporting local STEM programs (e.g., Genentech, Microsoft, and others).
Let us know what you think might be the reasons for this growth and what our region needs to do to sustain our success. And, be sure to stay tuned for updated STEM data and other innovation indicator updates early next year.
John Melville is Co-CEO of Collaborative Economics.
Last Spring, Gavilan College completed a comprehensive Educational Master Plan to focus on the development of an educational blueprint for the college for the next ten years, and to be the basis for a facilities plan to the year 2023. Our consultants looked at an assessment of the community and labor market needs for our 2700 square mile district, including population projections for Santa Clara and San Benito counties. Central to the study was the improvement of on-boarding services for our feeder high schools and seeking ways to better prepare students to transfer to four year institutions with an emphasis on transfer pathways. Our stakeholder groups on campus held many discussions about what the current gaps were, what was missing with our current outreach services, and what we could do differently to remind high school students in our service area that Gavilan was an excellent choice to begin an education journey toward transfer or in career technical education. We needed to break the community out of the image that the community college was “just” an extension of high school, instead of a versatile open access entry point for learning. In other words, we needed to demonstrate a new definition of a “college-going mindset” with our high school feeder schools.
It was very obvious to me as the new Superintendent/President that this new definition needed to begin with me, so last spring we decided to do a road show and visit the main feeder schools in our district. We invited parents and students to come and learn more about Gavilan, meet our faculty and counselors, and participate in small round table discussions about applying for college and financial aid, and choosing a major. Students from Gavilan joined us to share their academic and athletic experiences, and I went from table to table and introduced myself to the parents and students who attended. It was a very successful, grass roots effort that was combined with additional on-boarding activities throughout the year, including:
meetings with high school partners to review the recruitment cycle, changes in policies or processes, support services and special programs.
application, assessment, financial aid, and pre-orientation sessions conducted at all feeder and alternative schools in the district.
work with disability support staff at the high schools to connect their students with our AEC program.
conduct college tours, host bus trips to campus, and hold the annual Transfer Day and Career Day on Campus.
host “Super Saturday”, an accelerated matriculation event for parents and students who have not enrolled in late spring after other colleges have already admitted their students.
follow up with students who have not fully completed enrollment steps of their financial aid documents to connect students to additional services.
California Community Colleges have made significant advancements in the past five years in the area of student success, transfer and career technical education. Yet more remains to be done to accelerate the pace of improvement and attract high school students to our campuses. When we take the time to design and decide the focus of initiatives and outreach efforts with the student in mind, students benefit from a seamless transition from one educational system to another with greater support to achieve their educational goals.
Dr. Kathleen Rose is President of Gavilan College in Gilroy, CA.
Research shows that children’s early knowledge of math strongly predicts their later success in math, even into high school, and that persistent problems with math is the best predictor of failing to graduate from high school or enter college. More surprising is that early math also predicts later reading achievement, even better than early reading skills. In fact, doing more math in preschool increases oral language abilities when measured during the following school year. Given the importance of math to academic success, it’s clear that all children need a robust knowledge of math in their earliest years.
Unfortunately, one needs only to look at the data to see that we’re not doing enough to help our kids succeed in math. In 2015, the National Assessment of Educational Progress (NAEP) found that only 29 percent of California’s 4th graders performed at or above proficient in math, compared to 39 percent nationally. Moreover, our students made virtually no improvement between 2013 and 2015. Alarmingly, we seem to be headed in the wrong direction. When we look at California’s 8th graders, according to NAEP, only 27 percent performed at or above proficient in math, compared to 32 percent nationally. The disparities are even greater for kids of color. The gap in math proficiency between Caucasian and African-American 4th graders was 23 points and grew to 31 points by the 8th grade.
The 2017 Silicon Valley Competitiveness and Innovation Project report reaffirms the NAEP data, as well as the research documenting the importance of math. As the report states, 8th grade math proficiency is an important predictor for college preparedness and professional opportunities. Yet, even in the Silicon Valley, only 53 percent of 8th graders met or exceeded the state standards for math proficiency in 2016. While this is better than the state as a whole, when one looks at the performance of African-American and Latino 8th graders in the Silicon Valley, only 24 percent and 25 percent, respectively, met or exceeded the state standards for math proficiency.
What can we do about this?
We need to raise the profile and understanding among decision makers of the importance of early math, and early STEM education more broadly, through advocacy and outreach. We need to make the case that investing in early math and early STEM education pays off in terms later math achievement and academic success.
Children Now has posited that one of the central goals of any national or state education policy agenda must be to provide more students, especially those from underrepresented or disadvantaged groups, access to high-quality STEM education, and math in particular, as early in their studies as possible. More specifically, we should promote early learning and development within the local planning and budgeting dialogues required by the Local Control Funding Formula and Local Control Accountability Plans. We need to provide more resources for teacher training and professional development so our teachers are well prepared in both content and pedagogy to provide high-quality math and STEM instruction in their classrooms. And, we need to promote improved pathways for parents’ and families’ involvement and engagement in their children’s early education.
Ted Lempert is the President of Children Now, a nonpartisan umbrella research, policy development, and advocacy organization dedicated to promoting children’s health, education and well-being in California. Children Now also leads The Children’s Movement of California, a grassroots network of more than 2,000 business, education, parent, civil rights, faith, and community-based organizations working together to make children a top priority in public policy. Learn more at www.childrennow.org.
Meeting your teacher on the first day should be a given for our students. This year, too many students will enter their classroom with rotating substitute teachers or instructors on emergency credentials. This will be more common in low-income school districts, STEM fields, and special education classes. Last year, approximately 75% of school districts reported a shortage of qualified teachers. As of August 11th, 2017, the districts of San Francisco Unified, Oakland Unified, and Franklin-McKinley reported 61, 50, and 31 open positions respectively. This is because the current supply of teachers in California is at a 12-year low.
At the Silicon Valley Leadership Education Policy Summit on August 10th, we heard from experts throughout the day about the importance of recruiting and retaining strong teachers. Dr. Jeff Duncan-Andrade launched the conference with a compelling discussion around educational equity, emphasizing that teacher quality is the most important factor in student achievement. Assemblymember Tony Thurmond and Marshall Tuck, two candidates for State Superintendent of Schools, agreed that the shortage must be addressed through short-term and long-term efforts. Silicon Valley districts face additional challenges due to housing costs that are prohibitive on a teacher’s salary. Stephen McMahon, Deputy Superintendent of San Jose Unified School District, recognized that staff turnover is driven by teachers moving to work in more affordable regions.
The legislature clearly understands the urgency in addressing the shortage and introduced a number of bills to fund teacher recruitment and training. However, Governor Brown’s budget proposal included limited funding; ultimately, the state appropriated $30 million and redirected $11 million federal Title II dollars towards teacher recruitment and training.
Expect Legislators to push for further funding to address the shortage in 2018, and for the shortage to receive more attention through campaigns for both State Superintendent and Governor. Every student deserves to start school with an effective teacher greeting them at the door on the first day of school and the state must act to address this growing problem.
Margaret Daoud-Gray is Director of Education Policy at the Silicon Valley Leadership Group
This article appeared in the Silicon Valley Business Journal on August 3, 2017
Guest opinion: How poverty and politics affect the Valley’s housing crisis
By Brian Brennan and Erica Wood
For every ten new jobs created in Silicon Valley between 2010 and 2015, we built just one new housing unit.
That is the core of the Bay Area’s housing problem, and it goes a long way to explaining why, as documented in a recent report by our two organizations, Silicon Valley’s median housing price in 2015 was $935,000, while in competitor regions like Seattle and Austin it was $380,000 and $249,000, respectively.
We cannot expect the housing market to moderate until we build more housing at all income levels. To do that, we need robust action on two fronts: poverty and politics.
First, we need to dedicate public funds to support housing for the neediest in our region. The housing crunch affects everyone, but government has a particular role with respect to our low-income residents. Healthy communities have space for people at all income levels, but the cost of land in the Bay Area means stand-alone low-income housing rarely pencils out. That is why we need affordable housing funding measures like Senator Toni Atkins’ SB 2, which would establish a permanent funding source of affordable housing, and bond measures such as that proposed by Senator Jim Beall’s SB 3.
Perhaps counter-intuitively, however, addressing the housing needs of the poor means building housing for all income levels. The shortage of middle- and upper middle-income housing leads to gentrification: buyers at those levels look in markets that used to be for lower middle- and low-income residents. Thus, not only are we not building enough new housing for low-income residents, but the supply that we already have is being squeezed by inadequate new housing at other income levels.
Building more housing means addressing a second issue: housing politics. While new housing is in the interests of the entire region, it makes sense for individual cities to wait for their neighbor cities to bear the costs of building it. The local politics are all the more challenging because our housing crisis is less of a crisis for those who already own a home. They might want their kids to live nearby, or be concerned about the region’s economic vitality or the well-being of friends or coworkers – but many homeowners are counting on the steady increase of housing prices as their nest egg. We don’t talk about this much, but it adds to the complexity of housing politics, and helps explain the opposition to new housing in a region that so clearly needs it.
Part of the answer lies in re-thinking the way we make decisions about housing. Senator Scott Wiener is making a courageous effort to move the needle with SB 35, which would prevent those local governments not building their share of housing from rejecting new housing projects that have gone through the proper environmental review, community engagement and permitting processes. We agree with Senator Wiener: “Local control is about how a community achieves its housing goals, not whether it achieves those goals.”
When a region builds just one new housing unit for every ten new jobs, it’s no surprise that housing prices skyrocket. That is supply and demand. To address it, we need to focus public dollars on low-income housing while putting in place political structures that are conducive to new housing at all income levels.
Erica Wood is Chief Community Impact Officer at Silicon Valley Community Foundation. Dr. Brian Brennan is Senior Vice President at the Silicon Valley Leadership Group. They wrote this piece for the Business Journal.
Our society is on the cusp of perhaps the most dramatic shift in modern history. The digitalization of our society and economy—our greater reliance on artificial intelligence, the use of big data and the ubiquity of computers—promises to radically reshape how we live, work and play. To remain economically competitive and foster a more inclusive society, we must ensure that everyone is prepared for and can be active contributors to this future. Crucial to this is widespread access to a robust K-12 computer science education.
Currently only about 25 percent of Californian schools offer any CS courses to their students. In 2015, the Sacramento Bee writes, of the roughly 2 million public high school students in the state, only 35,000 students were enrolled in computer programming or CS courses. This disparity in education contributes to disparities in the workplace. As the Silicon Valley Business Journal reported in March, the underrepresentation in the Valley’s tech workforce of women and minority populations is striking: only 2 percent are African American, 3 percent Latinx and 24 percent women.
Momentum is building, however, and equity of access expanding. With the introduction of the AP CS Principles exam this year, the College Board experienced the largest exam launch in history. The number of students taking AP CS exams doubled nationwide between 2016 and 2017 (54,379 and 111,262, respectively). Most heartening, this year compared to 2016, the number of female and underrepresented minority test takers increased their participation by a striking 135 percent and 170 percent respectively. In addition, though California is not currently among the only 8 states that have developed rigorous K-12 CS standards, our state is taking an important step to join their ranks with the convening this September of the Computer Science Standards Advisory Committee.
Accessible, robust K-12 CS is not only a moral and social obligation; it is an economic and national imperative. Providing equitable access to computing resources and education will allow us to substantively expand and diversify the pool of qualified STEM workers, a vital piece to filling the over 200,000 open cybersecurity jobs and the projected shortfall by 2022 of 1.3 million qualified computational workers. Given that STEM jobs are the number one source of all new wages in the U.S. as well as the growing reliance on computers in all sectors, accessible CS education could ultimately raise more people of all backgrounds and beliefs into a renewed middle class. The alternative is to risk American economic competitiveness and stifle innovation.
While the state moves to develop standards, there is still much that the rest of us can do to promote access to K-12 CS education in our local districts. Parents, teachers, administrators and nonprofit partners can all be a catalyst for a budding new CS initiative or program on at a school site or within a district. For some ideas as to how you can do this, a great place to start is Code.org’s advocacy page.
Paul Escobar is Director of Policy and Education Programs for the Silicon Valley Leadership Group.
The Silicon Valley half was a total of nearly 14,000 new jobs across just four counties: San Benito, Santa Clara, San Mateo and San Francisco. Our region is a large part of the reason that the state’s unemployment rate remained unchanged at 4.9 percent — the lowest rate since 2000. It continues a trend that saw jobs in Silicon Valley increase 24.5 percent between 2010 and 2015.
Yet, despite Silicon Valley’s job growth, California had a net job loss in June, and therein lies the other half of a familiar story: Much of the state continues to struggle economically. This is the “Two Californias” dynamic that the California Business Roundtable honed in on some years ago: a divide that runs east-west rather than north-south, with a wealthy coast and depressed inland regions. The great challenge for our state legislators: How are we to think about economic development policies in a state that has both some of the richest and some of the poorest counties in the country?