Silicon Valley faces competition over world’s talents

SAN FRANCISCO -- Has Silicon Valley peaked? Will tech see an upswing in tech elsewhere in the world because of the current administration’s priorities?  How is Silicon Valley its own greatest enemy? In this week’s presentation at Silicon Vikings, experts chimed in over their forecast for 2017’s tech fortunes.

At the February 8 presentation, which Office Lease Center attended, Scott Anderson of Bank of the West pointed out the US economy is doing well, even with other factors affecting the market like Brexit and the US presidential election. The US dollar is just below a 14-year high and stocks are on the rise. The strength in labor market is close to full employment and Anderson predicts another 2 million jobs could be created in 2017. There has been an accelerated growth in income for those in education, healthcare, business services, transportation, utilities, and hospitality. However, Anderson states this is all short term positive growth.

President Trump’s budget and tax proposals could hurt the US more than it could benefit. Revenue could drop several trillion due to tax cuts; however, spending will be similar. Borrowing will cost several trillion in national debt along with higher inflation, mortgage rates, and interest rates if tax brackets go through.

Currently, Mexico is the US’ third largest importer of vehicles, electrical machinery, mineral fuels, optical and medical instruments, and fresh vegetables. Also, Mexico is the US’ second largest exporter of machinery, vehicles, mineral fuels, plastics, corn, soybeans, pork, soy products, dairy, and beef. A strain in relations and an increase in tariff could prove to be more costly than beneficial to the US.

California politician John Chiang spoke about  the financial impact on a state level. Since Mexico, Canada, and China are California’s biggest exporters and importers. California fears that the backlash on Trump’s actions may affect the state’s relations with its biggest business partners. Chiang calls on California to be united and set an example for the rest of country by reaching out to those countries and ensure relations will be well. China’s representatives withdrew from meeting in Los Angeles due to President Trump’s actions on the media. Chiang personally spoke with representatives from China, assuring them that California will work to maintain a healthy business relationship moving forward.

Chiang states that the US needs to pick things up, especially if it falls behind Europe and China in investments. California receives the largest amount of foreign investments among the states. California looks to focus on building and maintaining foreign relations to keep those investments.

The problems don’t end there as there is a housing shortage in California. Tax cuts are affecting low income housing in California with a need to restock the housing market. California is losing its middle class and young people. Sixty percent of residents require at least two degrees to get a job and, in the process, be able to afford to live in California.

Sean Randolph stated that  employment in the Bay Area is better in  most of California with most real estate investments financed by Chinese foreigners. San Francisco and Los Angeles are the largest investment targets for the Chinese, who many see as the reason 5,000 more housing units were added last year.

In the past year, rent costs fell 2% but housing in the Bay Area is still difficult to market due to steep prices. The average  of 1-bedroom apartment rental in San Francisco is about $3,400. Most skyscrapers, office spaces, and buildings that are currently being developed were investments made by tech companies.

Real estate in California is driven by tech. Although there have been less and less investments each year, it is forecasted to remain that way in 2017 as well. The ups and downs of California involve 16,364 patents in the Bay Area in 2016, 587 iPo tech companies in 2015, and 158,300 delays in vehicle hours in 2016, corporate tax reform, reshored profits, regulatory easing, infrastructure, localized issues, sanctuary cities costing the city (safe spaces), trade with Mexico and China, R&D cleantech, Immigration tech companies and biotech, restaurants and hotels.

The greater Sacramento economic council sees a huge immigration of talent within the Bay Area. Most are moving to the likes of Seattle, New York City, and Austin. If these people were to stay within the Bay Area, the workforce would double in 10 years. The Bay Area makes up 12.2 million people in the competitive marketplace. The GDP is the highest of any US mega region.

Bay Area is the epicenter of global innovation which boasts a shared and talented workforce of 208,000. About 31,000 people are currently enrolled in a 4- year university degree within 90 miles. The national trend allows California the opportunity to buck the trend and sustain relations.

California remains committed to diversity, carrying a population comprising 26% Nobel Peace Prize winners immigrants, 24% patent applicants, 20% faster job growth among 100 metro regions with 20% more foreign regions, and 70% of the most successful startups. Silicon Valley should stick together to build a better and more sustainable competitive position.

Garage Technology VenturesBill Reichert thinks  Silicon Valley in 2017 is now in its Innovation 5.0 era. Innovation 1.0 started with the wheelbarrow; Innovation 2.0 with steam and electricity, and Innovation 3.0 with corporations. Reichart claims Innovation 4.0, which was between the end of World War II and 2008, was a revolutionary period as it introduced, jet travel, atomic energy, cell phones, GPS, led lighting, lithium ion batteries, and venture capitalists to the world. Very few of these were developed in Silicon Valley.

“We are in the Innovation 5.0 period which dates back to 2008 to the present,” he said.

Innovation 5.0 is said to be the greatest period of all as it birthed the iPhone, Google, Apple, Tesla, Alibaba, and Amazon. The current state suggests there is slower growth for creation as the momentum rides with the globalization of innovation. Tech is changing models for entrepreneurs and investors, increasing desperation from all constituents as everything is trending simultaneously. Accelerated hype cycles pour money in as investors and developers search for the next big thing to disrupt each and every industry. Reichert goes on to state that venture capital is a small asset class compared to investing in loans and bonds. There is more participation in venture ecosystem due to compressed hype cycles; virtual reality, foodtech, edtech, etc. This results in greater resilience in the market thus holding lower returns.

Carl Fritjofsson of Creandum flew in from Sweden to share with Silicon Valley his point of view regarding the direction of technology. Investing at equity at low price then selling when the price has been realized at IPO is no longer the case. More capital is required for follow-ons with current investments than bets on new startups in hopes of a return. Many realize now that early-stage startups leads to failure.

Investors are looking toward more mergers and acquisitions with  later stage companies that have a proven successful product. European venture capitalists are affected by the immigration troubles going on in the US. With troubles obtaining work visas and lacking the ability to travel, many outsourced talents are looking to emigrate to Europe.

At the moment, the war for talent is high. Fritjofsson believes Silicon Valley may have peaked in importance a few years back and its current situation with its employees allowing other ecosystems to gain momentum in importance. With so much trouble to emigrate to the US, immigrants are considering staying within their home countries or elsewhere in Europe or Asia.

Christian Lagerling, co-founder and senior advisor at GP Bullhound, reiterated what Fritjofsson said, giving his Nordic perspective on tech economics. Lagerling believes 2017 will be an all-time high for European entrepreneurs trying to dip into the ecosystem. In 2016, Sweden had a good year when IPOs, M&A market transaction market dipped, and thrived in the fundraising market. It has experienced a record high in household debt, with an all-time high debt owed  to GDP, an increase in mortgage loans, and record low interest rates. Inflation is an economic activity that have picked up since the election with the Swedish krona appreciating and the NASDAQ at an all-time high.

The event ended with Estonian vodka, the first batch to hit the States and brought in especially for the Silicon Vikings. With insight from politicians, economists, and venture capitalists the audience was left to ponder what may occur in 2017.

We may come to witness a shift in the talent pool heading toward Europe. However, we should not underestimate Silicon Valley’s innovative minds. With virtual reality and artificial intelligence all the hype, we should see ourselves as trendsetters. Silicon Valley looks to capitalize on that momentum as cyber security’s importance ramps up steam after the elections. The nation’s largest cyber security conference, RSA Conference, is being held February 13 to 17 for anyone who is interested. Silicon Valley may have peaked with inventions but its innovations are here to stay and compete.

California politician John Chiang spoke about  the financial impact on a state level. Since Mexico, Canada, and China are California’s biggest exporters and importers. California fears that the backlash on Trump’s actions may affect the state’s relations with its biggest business partners. Chiang calls on California to be united and set an example for the rest of country by reaching out to those countries and ensure relations will be well. China’s representatives withdrew from meeting in Los Angeles due to President Trump’s actions on the media. Chiang personally spoke with representatives from China, assuring them that California will work to maintain a healthy business relationship moving forward.

Chiang states that the US needs to pick things up, especially if it falls behind Europe and China in investments. California receives the largest amount of foreign investments among the states. California looks to focus on building and maintaining foreign relations to keep those investments.

The problems don’t end there as there is a housing shortage in California. Tax cuts are affecting low income housing in California with a need to restock the housing market. California is losing its middle class and young people. Sixty percent of residents require at least two degrees to get a job and, in the process, be able to afford to live in California.

Sean Randolph stated that  employment in the Bay Area is better in  most of California with most real estate investments financed by Chinese foreigners. San Francisco and Los Angeles are the largest investment targets for the Chinese, who many see as the reason 5,000 more housing units were added last year.

In the past year, rent costs fell 2% but housing in the Bay Area is still difficult to market due to steep prices. The average  of 1-bedroom apartment rental in San Francisco is about $3,400. Most skyscrapers, office spaces, and buildings that are currently being developed were investments made by tech companies.

Real estate in California is driven by tech. Although there have been less and less investments each year, it is forecasted to remain that way in 2017 as well. The ups and downs of California involve 16,364 patents in the Bay Area in 2016, 587 iPo tech companies in 2015, and 158,300 delays in vehicle hours in 2016, corporate tax reform, reshored profits, regulatory easing, infrastructure, localized issues, sanctuary cities costing the city (safe spaces), trade with Mexico and China, R&D cleantech, Immigration tech companies and biotech, restaurants and hotels.

The greater Sacramento economic council sees a huge immigration of talent within the Bay Area. Most are moving to the likes of Seattle, New York City, and Austin. If these people were to stay within the Bay Area, the workforce would double in 10 years. The Bay Area makes up 12.2 million people in the competitive marketplace. The GDP is the highest of any US mega region.

Bay Area is the epicenter of global innovation which boasts a shared and talented workforce of 208,000. About 31,000 people are currently enrolled in a 4- year university degree within 90 miles. The national trend allows California the opportunity to buck the trend and sustain relations.

California remains committed to diversity, carrying a population comprising 26% Nobel Peace Prize winners immigrants, 24% patent applicants, 20% faster job growth among 100 metro regions with 20% more foreign regions, and 70% of the most successful startups. Silicon Valley should stick together to build a better and more sustainable competitive position.

Garage Technology VenturesBill Reichert thinks  Silicon Valley in 2017 is now in its Innovation 5.0 era. Innovation 1.0 started with the wheelbarrow; Innovation 2.0 with steam and electricity, and Innovation 3.0 with corporations. Reichart claims Innovation 4.0, which was between the end of World War II and 2008, was a revolutionary period as it introduced, jet travel, atomic energy, cell phones, GPS, led lighting, lithium ion batteries, and venture capitalists to the world. Very few of these were developed in Silicon Valley.

“We are  in the Innovation 5.0 period  which dates back to 2008 to the present,” he said.

Innovation 5.0 is said to be the greatest period of all as it birthed the iPhone, Google, Apple, Tesla, Alibaba, and Amazon. The current state suggests there is slower growth for creation as the momentum rides with the globalization of innovation. Tech is changing models for entrepreneurs and investors, increasing desperation from all constituents as everything is trending simultaneously. Accelerated hype cycles pour money in as investors and developers search for the next big thing to disrupt each and every industry. Reichert goes on to state that venture capital is a small asset class compared to investing in loans and bonds. There is more participation in venture ecosystem due to compressed hype cycles; virtual reality, foodtech, edtech, etc. This results in greater resilience in the market thus holding lower returns.

Carl Fritjofsson of Creandum flew in from Sweden to share with Silicon Valley his point of view regarding the direction of technology. Investing at equity at low price then selling when the price has been realized at IPO is no longer the case. More capital is required for follow-ons with current investments than bets on new startups in hopes of a return. Many realize now that early-stage startups leads to failure.

Investors are looking toward more mergers and acquisitions with  later stage companies that have a proven successful product. European venture capitalists are affected by the immigration troubles going on in the US. With troubles obtaining work visas and lacking the ability to travel, many outsourced talents are looking to emigrate to Europe.

At the moment, the war for talent is high. Fritjofsson believes Silicon Valley may have peaked in importance a few years back and its current situation with its employees allowing other ecosystems to gain momentum in importance. With so much trouble to emigrate to the US, immigrants are considering staying within their home countries or elsewhere in Europe or Asia.

Christian Lagerling, co-founder and senior advisor at GP Bullhound, reiterated what Fritjofsson said, giving his Nordic perspective on tech economics. Lagerling believes 2017 will be an all-time high for European entrepreneurs trying to dip into the ecosystem. In 2016, Sweden had a good year when IPOs, M&A market transaction market dipped, and thrived in the fundraising market. It has experienced a record high in household debt, with an all-time high debt owed  to GDP, an increase in mortgage loans, and record low interest rates. Inflation is an economic activity that have picked up since the election with the Swedish krona appreciating and the NASDAQ at an all-time high.

The event ended with Estonian vodka, the first batch to hit the States and brought in especially for the Silicon Vikings. With insight from politicians, economists, and venture capitalists the audience was left to ponder what may occur in 2017.

We may come to witness a shift in the talent pool heading toward Europe. However, we should not underestimate Silicon Valley’s innovative minds. With virtual reality and artificial intelligence all the hype, we should see ourselves as trendsetters. Silicon Valley looks to capitalize on that momentum as cyber security’s importance ramps up steam after the elections. The nation’s largest cyber security conference, RSA Conference, is being held February 13 to 17 for anyone who is interested. Silicon Valley may have peaked with inventions but its innovations are here to stay and compete.

The event ended with Estonian vodka, the first batch to hit the States and brought in especially for the Silicon Vikings. With insight from politicians, economists, and venture capitalists the audience was left to ponder what may occur in 2017.

We may come to witness a shift in the talent pool heading toward Europe. However, we should not underestimate Silicon Valley’s innovative minds. With virtual reality and artificial intelligence all the hype, we should see ourselves as trendsetters. Silicon Valley looks to capitalize on that momentum as cyber security’s importance ramps up steam after the elections. The nation’s largest cyber security conference, RSA Conference, is being held February 13 to 17 for anyone who is interested. Silicon Valley may have peaked with inventions but its innovations are here to stay and compete.