Dublin shows signs of Valley problems

Constant hype is the norm in Silicon Valley, where every company is the next Netscape (although these days, that isn't necessarily a good omen), every application is the next "killer app", and everyone is eager to sell themselves to a good venture capitalist.

That's why one of the most interesting and anticipated publications each year is the San Jose, California non-profit organisation Joint Venture's annual Index of Silicon Valley. The index (also online at www.jointventure.org/ resources/1998index/) is intended to give a comprehensive view of life in the Valley. It uses 36 indicators to track both the economy and quality of life in the 1,500square mile region which circles the southern end of the San Francisco Bay.

Joint Venture has a board packed with leading Silicon Valley CEOs (like Hewlett-Packard's Mr Lewis Platt and Autodesk's Ms Carol Bartz), key educational figures, assorted politicians, and other notables.

Its index is a fascinating cross-section of the most dynamic technology region in the world. There are some interesting comparisons to be made between trends in the Valley and in Ireland (and Dublin in particular), especially regarding how the growth in technology jobs can alter - not always for the better - a region's quality of life.

What emerges right away is the wealth as well as diversity of the Valley - 2.3 million people live there, 1.2 million have jobs, half are white, with the rest mostly made up of equal numbers of Hispanics and Asian/Pacific Islanders, 23 per cent of residents are foreign-born, 71 per cent are under 44 (an interesting comparison to Ireland, as the IDA highlights our youthful workforce to foreign companies). More than 80 per cent have high school degrees, and in excess of 30 per cent, a college degree, an extraordinary concentration of brainpower.

Like Ireland, Silicon Valley has an economy with job growth, rising wages and expanding exports. Since 1992, the region has added more than 200,000 jobs; 53,000 of them in 1997 alone, with growth in the software and computer sectors driving those gains. Not surprisingly, the Valley leads the US in exports, representing a whopping 40 per cent of California's exports (remember, this is a state which also has a massive entertainment and agricultural industry).

As a result, the average annual wage increased to US$46,000, with income growth in higher-income families outpacing that in middle and lower-income families. Highest salaries go to workers in the software and semiconductor areas: $85,300 and $75,400.

But all that growth and prosperity has also caused the kind of problems that are beginning to emerge in Ireland, particularly in terms of the strains placed on housing costs and availability, and traffic congestion. While about 60 per cent of Americans in general can afford a median-priced home, only 37 per cent of Silicon Valley residents can.

That's largely due to a tight market: while the Valley has created 200,000 jobs since 1992, it has added only 38,000 housing units (and job growth also outstrips the labour supply). Renting offers little relief, either. Rents have skyrocketed 29 per cent since the end of 1995. Sound like Dublin?

Traffic has steadily worsened as well as people are forced to buy outside of the Valley and commute to work. And here's another calculation relevant to Dublin: delays due to traffic congestion have increased 230 per cent from just two years ago. Like Dubliners, Californians like their cars, and those making long commutes have little option but to brave freeway delays.

The index pinpoints some of the trade-offs a region can expect in return for the influx of jobs and overall prosperity that comes from the technology industries. As some of Ireland's high-tech companies prepare to expand - several thousand employees will be hired just for Intel's new wafer fabrication plant in Leixlip and IBM's Mulhuddart campus in Dublin - pressure on roads and housing will increase as well.