New venture outsourcing blog

Daniel Weintraub at the Sacramento Bee wrote an opinion piece today, Silicon Valley Index shows sides of new economy, where he notes that, “Even as much of the rest of California braces for what looks like a slowdown, the state’s best known economic engine - Silicon Valley - is humming along…”  This “humming along” is being reported via the Joint Venture: Silicon Valley Network’s Index of Silicon Valley for 2008.  The economic report is quite interesting, if you’re into that sort of thing (as I am)!

The really fascinating aspect of Weintraub’s opinion piece to me though, was his acknowledgement of contrary economic indicators and how they can be resolved:

• The share of middle-income jobs in Silicon Valley is shrinking
• Share of households earning less than $35,000 has been declining since 2004
• The number of low-paying jobs is growing as a percentage of the work force 
• More households are reporting higher incomes
• Share of households earning more than $100,000 has been increasing since 2004
• The share of households earning between $35,000 and $100,000 has stayed roughly the same
• Nearly 4 in 10 households earn more than $100,000 / year!

How does Weintraub reconcile these?  He points to the increasing “free agency” of the workforce.  The Silicon Valley culture is now one of work for hire, specialists as consultants, which of course means companies are doing more outsourcing than ever before.

It’s interesting that the fraction of outsourcing has increased so dramatically in Silicon Valley and that it’s been so good to their economy.  As Silicon Valley’s bread and butter are high technology new ventures, the advantages of outsourcing for startups is apparently clear to them.  Hopefully other startups around the world will continue to follow suit!

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