In Silicon Valley, an economic rebound
The innovation capital is prospering again, with more jobs and the nation’s highest wages.
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Two local Stanford PhD candidates formed the company in 2002. With help from the world’s epicenter of venture capital located in nearby Menlo Park, they solved some of the technological hurdles in “thin film” solar energy.Skip to next paragraph
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Then the founders picked a place to headquarter their factory. San Jose won out because of the local talent pool, availability of industrial space, and the city government’s help in moving things along quickly, says CEO Martin Roscheisen.
“It’s truly phenomenal the way the city has streamlined administratively. Several of the key permitting items are literally 24 hour [turnarounds],” says Mr. Roscheisen, who says the wait times in other locations would be three to six months. “It means everything – being in business or not. We cannot possibly be stalled by permits in building our factory.”
San Jose revamped its business outreach after the dot-com collapse. One key change, says Paul Krutko, the city’s chief development officer, was the formation of teams from across city government who travel to businesses to approve permits. Since 2002, the program has permitted 9 million square feet of commercial space, housing almost 15,000 jobs.
“It cost the city about $81 a job to make that happen,” says Mr. Krutko. “We think that’s a pretty good trade-off.”
The weak dollar has benefited Nanosolar and the rest of the export-based economy of Silicon Valley. Nanosolar manufactures solar cells in the United States, paying wages in cheap dollars, then sells to Europe, which pays in higher-value Euros.
“High-tech manufacturing can be done as cost effectively in San Jose as in Shanghai or New Delhi – it’s all based on skilled labor. The skilled people now cost about the same in either place. The gap has shrunk very rapidly,” says Roscheisen.
The concentration of top talent here remains unparalleled, thanks in part to the region’s welcoming of skilled immigrants. San Jose has the most diverse ethnic population of any US city, with only 39 percent of residents born in the US. Roughly two-thirds of innovative companies in San Jose have at least one foreign-born member of management, says Krutko.
The entrepreneurial ethos also draws talent. “It’s great minds accepting failure as a part of the journey,” says Saeed Amidi, president of the Plug and Play Tech Center in Sunnyvale. The center serves as a hotel for start-up companies, offering low-cost office space as well as introductions to Valley players.