Silicon Valley as an economic juggernaut has reigned supreme throughout the pandemic compared to its rivals in the Sunbelt and Pacific Northwest, newly released numbers show.
According to gross domestic product data released this month, Santa Clara County saw the largest growth in the country between 2019 and 2021 among areas with more than half a million residents — an eye-popping increase of 19% — from $307 billion to $382 billion.
It places Santa Clara County’s GDP — the measure of all goods and services produced within a certain region — roughly equal to the entire economy of Malaysia, or more than the economies of Morocco, Slovakia and Ethiopia combined. If Santa Clara County were its own nation, it would be the 38th largest world economy. The county-level data, compiled by the federal government’s Bureau of Economic Analysis, only releases economic activity from the previous year.
Though Silicon Valley takes the gold, its challengers are still posting impressive numbers. Coming in second is Austin’s Travis County — an up-and-coming technology hub dubbed the “Silicon Hills” — which grew 14%, from $109 billion to $129 billion over the same three-year period. Seattle’s King County — home to Microsoft and Amazon, with Boeing operating in and around the county — grew 13%, from $277 billion to $328 billion.
Over the last few years, “the Bay Area just did really, really well,” said Stephen Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy. Although the data comes as no surprise to those who’ve seen Silicon Valley’s meteoritic growth — and stark income inequality — this year’s figures reveal how the technology sector kept the area swimming in cash in the midst of an ongoing pandemic.
Numbers released from last year showed Santa Clara was the only county in the Bay Area to see positive GDP growth during the first year of COVID.
This time around, data shows the county’s economy had an even more successful second year of the pandemic — from 4.7% growth in 2020 to a whopping 13.3% in 2021.
Last year’s bounce is second only to San Francisco, which saw a massive rebound from -0.2% to 14%. That’s the largest increase among the country’s 144 large-population counties during this past year, according to the BEA, which attributed it to the city’s finance and insurance industries. (The only large-population county in the U.S. to note negative GDP growth in 2021 was Kern, where the city of Bakersfield is located.)
But will the good times for Santa Clara County — once known as the agriculturally dominated “Valley of Heart’s Delight” — continue to roll?
Experts say that while 2022 figures are expected to be good for Santa Clara County, it could lose its place as kingmaker next year or at least see a plateau or slight downturn. With the tech employees getting laid off, signs of a possible recession and high interest rates, dark clouds loom on the horizon.
“As we look into 2023, we’re looking at a different story,” said the Bay Area Council’s Senior Director Sean Randolph.
As of the beginning of this month, roughly 8,000 workers have been laid off in the tech and biotech sectors, with companies such as Meta, PayPal and Oracle trimming their employee counts. The concentration of technology jobs may contribute to the largest decrease in Santa Clara County’s GDP next year among other heavy hitters in the country, said Randolph, who also pointed out that venture capital investment within the valley is also seeing a major downturn.
But others aren’t so convinced that bad news is around the corner.
Levy, from the Continuing Study of the California Economy, said that despite the tech layoffs making flashy headlines, unemployment numbers within Santa Clara County remain very low.
According to the Employment Development Department’s latest data from November, the county is tied for third with Marin for unemployment at 2.2%, with San Mateo and San Francisco leading the pack. There’s also the fact that tech companies are continuing to build office space. Menlo Park City Council recently approved a major project from Meta that will turn 1.2 million square feet into office, housing and retail space in the Belle Haven neighborhood.
“Even though I think 2023 will be slow, the layoffs don’t signal an end to our tech dominance or growth,” Levy said. “I think we’re pretty secure.”
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