Silicon Valley economy trampled Austin, Seattle by billions of dollars during the first two years of COVID
Silicon Valley, as an economic giant, has reigned supreme during the pandemic compared to rivals in the Sunbelt and Pacific Northwest, recently released numbers show.
According to gross domestic product data released this month, Santa Clara County experienced the fastest growth in the country between 2019 and 2021 among areas with more than half a million residents, a staggering 19% increase, from $307 billion to $382 billion.
It places the GDP of Santa Clara County, the measure of all goods and services produced within a given region, roughly equal to the entire Malaysian economy, 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 economy in the world. County-level data, compiled by the federal government’s Bureau of Economic Analysis, only publish economic activity for the prior year.
Although Silicon Valley takes the gold, its rivals are still posting impressive numbers. In second place is Austin’s Travis County, an up-and-coming tech hub known as “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.
In recent years, “the Bay Area has done very, very well,” said Stephen Levy, director of the Palo Alto-based Center for the Continuing Study of the California Economy. Although the data does not surprise those who have seen the meteoric growth of Silicon Valley: and stark income inequality — This year’s numbers reveal how the tech sector kept the area swimming in cash amid an ongoing pandemic.
Published numbers from last year showed that Santa Clara was the only county in the Bay Area to experience positive GDP growth during the first year of COVID.
This time around, the 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 rebound is second only to San Francisco, which experienced a massive rebound from -0.2% to 14%. That’s the largest increase among the nation’s 144 populous counties over the past year, according to the BEA, which attributed it to the city’s finance and insurance industries. (The only county with a large population in the US that saw negative GDP growth in 2021 was Kern, where the city of Bakersfield is located.)
But will the good times continue for Santa Clara County, once known as the agriculture-dominated “Valley of the Heart’s Delight”?
Experts say that while the 2022 numbers 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 recession. With tech employees being laid off, signs of a possible recession, and high interest rates, dark clouds are hanging on the horizon.
“As we look to 2023, we are seeing a different story,” said Sean Randolph, a senior director for the Bay Area Council.
Earlier this month, approximately 8,000 workers have been laid off in the tech and biotech sectors, with companies like Meta, PayPal and Oracle cutting their number of employees. The concentration of tech jobs may contribute to the biggest decline in Santa Clara County’s GDP next year among other majors in the country, Randolph said, also noting that venture capital investment within the valley is also seeing a big boom. recession.
But others aren’t so convinced that bad news is just around the corner.
Levy, of the Continuing Study of the California Economy, said that despite tech layoffs making headlines, the unemployment numbers in Santa Clara County remain very low.
According to the latest data from the Employment Development Department for November, the county is tied for third with Marin in unemployment at 2.2%, with San Mateo and San Francisco leading. There’s also the fact that tech companies continue to build office space. The Menlo Park City Council recently approved a major Meta project that will convert 1.2 million square feet of office, residential and retail space in the Belle Haven neighborhood.
“While I think 2023 will be slow, the layoffs do not signal the end of our technological dominance or growth,” Levy said. “I think we’re pretty safe.”