Silicon Valley IT Dominance – Slipping or Staying?

Reports of rising numbers of IT jobs in foreign markets might mean Northern California’s Silicon Valley is no longer the biggest tech employer, but analysts are quick to point out that Silicon Valley is different, providing the most diverse and robust mix of jobs and a higher level of talent.

According to officials for the state of Karnataka, India, the Indian city ofBangalore is set to top 200,000 IT and other technology jobs by next year, comprised of mostly IT, call center and business process positions. That figure is about 25,000more than the estimated number of tech workers in Silicon Valley.

However, Gartner Vice President Martin Reynolds said the jobs in foreign markets such as Bangalore tend to be primarily lower level, programmer positions with some hardware design and other work — a stark contrast to the variety and level of skill in the Silicon Valley.

“There you have hardware, Silicon, software — every single tech area,which creates a great degree of synergy,” Reynolds told TechNewsWorld.

Changing World and Rank

The growth of jobs in Bangalore does not seem to be causing too muchconcern in Silicon Valley, where job growth is rising dramatically aftera drought of employment there, and where the workers have been told before that they will be dethroned as the top tech employment area.

Reynolds also downplayed the significance of Bangalore overtaking theValley as the biggest tech employment area, indicating that the foreigncity is a special case because of the number of companies with otherbusiness that includes software components.

However, Reynolds hinted that there might be similar, superceding techmarket news as nations such as China, which has exploded in itsmanufacturing of hardware, continue to grow.

Domestic Challenge

Much of the attention on IT jobs worldwide has been on the loss of U.S.positions to overseas markets with cheaper labor. Recent studies indicate that outsourcing within the U.S. may be displacing even more workers.

Reynolds also indicated that other regions inside the U.S., such asOregon, Washington and Texas, are poised to push Silicon Valley down thelist in terms of tech employment.

He said the result would likely be lower wage increases for Silicon Valley workers, who will not benefit from the upper pressure on wages that has existed in the past.

Staying on Tech Top

Nevertheless, current employment figures indicate Silicon Valley is experiencing a significant increase in technology work, with jobs mainly in: hardware and software design and production; Internet, hosting and other services; data processing; and telecommunications.

“The innovation is still here, but the opportunity will decline as labor becomes available for less cost,” Reynolds said.

Still, the analyst added that no other place in the world has the scale and diversity of IT skill that exists in the Valley.

“That’s what differentiates it,” Reynolds said.

Cost of Living

Yankee Group analyst Andy Efstathiou added that a higher cost of living and infrastructure might also cause some Silicon Valley emigration.

However, Efstathiou also pointed to the educational institutions that couch Silicon Valley and said higher value IT services and jobs are staying in the U.S.

“The most mitigating factor is for the higher value services, the educational infrastructure headquartered in Silicon Valley provides the people that will work on the next generation of technology,” Efstathiou told TechNewsWorld.

Efstathiou said the high cost of living and a trend of movement away from Silicon Valley might impact the tech center in the long run, but for the shorter term, the region will remain technology’s top spot.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

LinuxInsider Channels