‘Achilles’ heels’ of local prosperity 

This region’s economy has strongly recovered from the Internet slump of five years ago, Bay Area Economic Forum President/CEO R. Sean Randolph told The Examiner editorial board last week. But Randolph also warned that in today’s competitive global marketplace, every upturn is vulnerable to fast-moving business changes. And the Bay Area’s revived prosperity could be threatened if some well-recognized "Achilles’ heels" are not remedied quickly enough. These familiar trouble spots are education, infrastructure and housing cost.

According to Economic Forum statistics, since the height of the dot-com boom at the beginning of this decade, the Bay Area’s gross economic product has grown to $352 billion in 2005. That actually surpasses the dot-com peak by an estimated $17 billion, and the Forum is forecasting a $400 billion gross when final figures are tallied for 2006.

Randolph credited much of the economic rise to the Bay Area’s major research centers, such as the state’s $3 billion stem cell institute in San Francisco. Leading-edge research opportunities attract enterprising minds to the Bay Area and foster a culture of ingenuity.

This rosy picture was echoed in a new study from the American Electronics Association that found the unemployment rate for computer scientists last year was a low 2.5 percent, and for electrical engineers it was only 1.9 percent. However, such full employment also signals a problematic shortage of skilled professionals that could easily prompt more U.S. companies to open high-tech offices abroad.

Today’s American education is not fulfilling the mission to provide training for a globally competitive work force, including the skilled technicians so highly in demand in the Bay Area. A disturbing new federal study found that 40 percent of high school seniors failed to perform at the basic level on a national mathematics test. And on a national science test, half of 12th-graders could not pass basic skills. If we cannot start doing considerably better in the Bay Area, there is surely big trouble ahead.

Our overloaded infrastructure is another dangerous threat to the Bay Area’s economic surge. A free-flowing infrastructure enables goods and workers to move easily without excessive loss of productivity. Historically, California cities and counties invested 2.5 percent of their revenue on infrastructure improvements. But for more than 20 years, that number has fallen to an average of 1 percent.

Finally, as we are all too aware, the Bay Area’s prohibitively high housing cost makes it difficult for the region to retain the lower- and middle-income technicians and service workers so necessary to a complete functioning economy.

For now at least, California continues to employ far more technology workers, pay higher wages and attract more venture capital than any other state. But we cannot count on the good times lasting long unless we finally clean up our act.

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Staff Report

Staff Report

A daily newspaper covering San Francisco, San Mateo County and serving Alameda, Marin and Santa Clara counties.
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