Innovation Industries Drive Silicon Valley’s Economy

By John Melville

growth-of-innovation-industries-and-other-industries-12-5-2016The 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.   Thus, their success is an important measure of how well Silicon Valley and other regions are providing an effective “innovation ecosystem.”

So how are we doing?  Between 1995 and 2015, output in Innovation Industries rose by almost 150%, while that of the rest of the economy increased by less than 40%.  A decade ago output for the both sets of industries were actually rising at a comparable rate.  This situation changed significantly when Innovation Industry output accelerated rapidly beginning in 2010, a trend that has continued through at least 2015.

employment-in-innovation-industries-graphic-12-5-2016What about jobs?  Silicon Valley has the highest proportion of Innovation Industry jobs per capita compared to other Innovation Regions.  Be sure to stay tuned for the release of the SVCIP 2017 Update report to be released early next year to learn more about how jobs in Silicon Valley Innovation Industries are also growing faster than those in other Innovation Regions.

 

 

 

John Melville is Co-CEO of Collaborative Economics.