Future Of Bay Area Jobs
In the last two decades the Bay Area economy has seen jobs move out of the region to domestic and overseas locations, in search of lower costs and markets. Initially limited to manufacturing and assembly, the sophistication of the operations performed overseas has risen steadily and now includes computer programming, support and integration, and a range of other service and white-collar functions. Engineering and design, once performed almost exclusively in the United States and other developed economies, is also being done overseas by multinationals or by local companies contracted to them.
With some of the highest costs of doing business in the nation, Bay Area companies in particular have had major cost incentives to source and distribute their activities globally. Increasingly, however, other factors such as rising capabilities and growing market opportunities in other regions have provided additional motivation.
These factors, combined with a weak economy, have intensified interest in the media and among business, labor, government and community leaders in global offshoring and its impact on the domestic jobs base. Some strongly endorse offshoring as a strategy vital to competitiveness, while others are alarmed at the depth and speed of the changes that are occurring due to globalization and are proposing legislative restrictions.
By focusing only on offshoring, however, and ignoring key trends that affect jobs such as demographics and technology, the current debate lacks the balanced perspective needed to assess the many dynamics at work and the range of options available. Much of the debate is based on anecdotal information, without good empirical data. And little of the information that is available is specific to the Bay Area, which as one of the most globalized economies in the nation and the worlds technology leader is at the center of the offshoring phenomenon.
With these considerations in mind, the Bay Area Economic Forum, Joint Venture: Silicon Valley Network, the Stanford Project on Regions of Innovation and Entrepreneurship and A.T. Kearney have joined to deliver an in-depth regional perspective on this issue. The objective of the partners and of this study is to help business and community leaders and state and regional policymakers understand the Bay Area's job market and how it is changing in response to key global and domestic trends. The model it provides is designed as a tool to anticipate structural shifts, both positive and negative, resulting from these trends. We believe that the analysis will provide the foundation for a broader and more balanced examination of what is happening to Bay Area jobs - and why. We also believe that the study approach and findings are applicable to other regions and have national implications.
The best policies are proactive rather than reactive. Economic globalization is here to stay and will accelerate in the coming years. Managing it and the other key issues impacting California and the Bay Area's competitiveness and economic leadership will require strategic vision by business, government and community leaders alike.