Silicon Valley’s Competitive Woes

Silicon Valley, Bay Area, Silicon Valley Leadership Group, Sunnyvale, Cupertino, Mountain View, MTC, VTA, Metropolitan Transportation Commission

Silicon Valley, Bay Area, Silicon Valley Leadership Group, Sunnyvale, Cupertino, Mountain View, MTC, VTA, Metropolitan Transportation Commission

Three primary issues facing Silicon Valley’s success and competitiveness are transportation, housing and education.

By Jack Stubbs

Tech has now permeated every sector of our industry, not just in the U.S.A. but also globally. The importance of the Bay Area in that evolution has really grown as well,” Vladimir Bosanac of The Registry said. Even as the technology industry increasingly influences and drives the economic engine of the Bay Area at large—thus heightening the competitiveness of the Silicon Valley as one of the most prominent tech hubs in the country—issues of congestion, transportation and education are continuing to challenge the success and competitiveness of the Valley’s rapidly evolving economy.

On Tuesday, July 14th, The Registry facilitated an event called “Keeping Silicon Valley Competitive” where a civic leadership panel discussion was held to discuss the issues of transportation and education currently being faced throughout the Silicon Valley. The panel was attended by Carl Guardino of the Silicon Valley Leadership Group, Mayor Jim Griffith from Sunnyvale, Mayor Rod Sinks from Cupertino and Mayor John McAlister from Mountain View. The panel discussion was held at the Computer History Museum at 1401 North Shoreline Blvd. in Mountain View.

The Civic Leadership Panel served as a medium through which to confront two interconnected issues increasingly plaguing the Silicon Valley’s competitiveness—transportation and housing. “What we hear from a regional perspective in terms of our economic competitiveness and our quality-of-life as we recruit and retain talent are really the flipside of the same coin: transportation and housing—those are the two really big economic and quality-of-life challenges we face,” Guardino said.

One of the primary reasons why transportation remains such a problem throughout the Valley is because some of the region’s most prominent areas have little or no influence with issues regarding public transportation, according to Griffith of Sunnyvale. “We take primary responsibility for the roads, but that doesn’t include the highways, and we have virtually no say in issues such as public transit. Our focus tends to be the residential streets, bike lanes and [similar things].” Most of the more significant decisions about public transit are typically decided by the MTC (Metropolitan Transportation Commission) and the VTA (Santa Clara Valley Transportation Authority), says Griffith. Discrepancies in financial clout also inhibit the cities’ ability to weigh in on the public transit network. “A lot of it [depends on] where the money is spent. The VTA and MTC have very large budgets. The decisions as to where those transportation dollars get divided up are well beyond us. We see both of those bodies tend to be dominated by San Jose-based entities, which makes it a little bit challenging for us to try and get the public transit that we think we need.” Griffith added.

Aside from a financial standpoint, a lack of transportation options presents a very real problem in the valley in terms of expansion within the region, according to Sinks. “We’re very interested in building a coalition of cities to fix the transit desert that we find ourselves in today. We have the generic problem of people needing to get to work. We have a lot of apprehension about growth, but we can fix that if we take bold steps forward to address our transportation needs.” In order to combat the multiple problems presented by the transit desert that the panelists believe the valley has largely become, alternate transit solutions and strategies are being considered throughout the community.

Mountain View, for example, has implemented a vehicle cap in an effort to reduce congestion and compensate for the growth in the region. “We decided to take a single occupancy vehicle cap and make it so that any businesses in North Bayshore wanting to grow have to meet [that cap]. We put the onus on the businesses to try to come up with a solution to reduce traffic,” McAlister said.

A more comprehensive system—a combination of effective mass transit and ride-sharing services—is being applied in Cupertino. “Today, conventional wisdom says that we need to have a lot of ridership within a half a mile of transit centers,” Sinks said. One solution might be “a combination of effective mass transit in the corridors plus the great reach that we can have through these ride-sharing services at inexpensive prices,” he added. Other alternative ride-sharing services—such as Lyft and Uber—are also being considered to combat the transportation crisis.

However, such measures are not necessarily viable options since they don’t achieve the density required around mass-transit stations, according to Guardino. “We can’t bypass the need for density near transit stations, thinking that Lyft or Uber or automated cars are going to save us from that need,” he said. An alternative such as BART, which carries 440,000 weekday passenger trips, would more likely achieve the required density, Guardino suggested. While it is imperative to consider intermodal solutions to the transportation crisis, modernization and improvement of existing options—such as BART and Caltrain—is crucial.

While there were some understandable differences in agreement throughout the panel, all parties assented that considering intermodal solutions and looking at the bigger picture are just two of the crucial components at play. “We have to be bold… We have to think intermodal… we have to be inclusive: we’re glad to be in tech, but there are a lot of disabled and poor folks, who need mass transit service…we have to be geographically balanced,” Guardino said.

Indeed, such an arsenal of strategies will have to be utilized in order to achieve the ultimate goal of moving the masses throughout the valley via public transit, according to McAlister of Mountain View. “If you look at the Silicon Valley and South Bay, we don’t really have the transportation infrastructure to move masses.” A larger vision—and an in-depth consideration of how the transportation network fits into and influences the larger region—is required.

And when the larger Silicon Valley network is examined, transportation is only one piece of the puzzle when it comes to assessing what is enhancing or inhibiting the competitiveness of the valley regionally. “The issues facing Silicon Valley’s success are transportation, housing and education. When we compared the competitiveness of the Silicon Valley to the other seven top tech regions in the United States, those are the three areas in which we mainly need to improve,” Guardino said, while also emphasizing the need to think regionally when considering the three primary components.

One of the strategies being used to combat the housing imbalance in Mountain View—and throughout the region—is the use of developmental impact fees. “Mountain View [has] implemented development impact fees for residential, commercial and ownership to generate funds to make sure that we can build or buy affordable housing units to try to keep the rent increases and the imbalance to a minimum,” McAlister said. From an education perspective, however, lack of funding—and a lack of sufficient financial capital—means that schools cannot be competitive relative to the housing development marketplace. “There’s a major problem with schools in that there is a school impact fee that is attached to housing. All the schools realistically need something like $30 dollars per square foot for every unit of housing that’s built—and instead they’re getting $3 dollars per square foot. There’s no hope of a school being built when it comes to being competitive and acquiring land to expand their holdings,” Griffith said.

As well as failing to be competitive in relation to the housing market, schools in the valley lack the necessary infrastructure to succeed, according to McAlister. “Right now, we don’t have the financing or infrastructure to make sure that the schools are up to technology standards, teaching methods or adequate payment for teachers.” If the funding and financial problems facing schools are not addressed at the state level, McAlister suggests, the valley will likely lose its competitive edge over surrounding regions. “We have to go to the state level to change the funding [to] stay competitive. Otherwise, the housing and transportation isn’t as important. That’s where we’re going to lose our competitiveness [through education].”

According to Mayor Griffith, another concern is a fundamental disconnect between schools systems and the city government in terms of development. “This means that schools are largely divorced from the whole development process, which means that they’re left with having to deal with the impact of the development later. Schools will never spend the operational money on capital expenses—they will spend it on operational stuff. There has to be some sort of dramatic mode shift so that schools have the opportunity to get the capital revenue they need,” he said.

Certainly, few who attended the panel would disagree that such a dramatic mode shift isn’t necessary—at the levels of transportation, housing and education. Nevertheless, the challenge within the valley remains: how to initiate that shift while still maintaining its competitive edge.