Q&A: Russell Hancock on Silicon Valley’s economy and COVID rebound
SAN JOSE — Russell Hancock, president of Joint Venture Silicon Valley, is keeping a close eye on the Bay Area’s economy, monitoring the signs of its strength and taking stock of the weaknesses exposed during the pandemic. think tank that he leads produces regular reports about the Silicon Valley economy and its job market, which help Hancock keep track of what’s going on in the region. This news organization recently spoke with him about Silicon Valley’s path through the pandemic, the tech sector and the future of work.
Q: What’s your general assessment of the job market in the South Bay and the Bay Area?
A: We are in surprisingly good shape. It’s better than anybody expected.
Q: Why is that the case, considering the ongoing coronavirus and its variants?
A: We are home to the tech companies that have turned out to be essential to life during the pandemic. The platforms, the communications tools, the devices, the networks, the electronics and the architecture that support the devices and services we need.
Q: What about the tech sector in Silicon Valley specifically?
A: The tech economy did not take a hit. Tech has had two banner years. Tech is getting record amounts of venture capital. We are blowing through records for market caps. In every way you can measure it, this is an economy that is as strong, robust and resilient as any you can find in the world.
Q: Do areas of concern remain, even considering the strong economy and job market?
A: As an economist, I have to speak with both hands. On one hand, the economy is strong. On the other hand, the pandemic introduced pain and suffering, displacement, evictions, hunger. All of those took place on the same landscape as that strong economy.
Q: What are some of the lessons from the pandemic?
A: It laid bare the injustice of our society. The world is not fair. The people who were the most vulnerable were the most likely to lose their jobs, to be furloughed, or to be exposed to the disease.
Q: Are we in an on-again, off-again economic recovery?
A: Yes we are. The economy never moves in a straight line. Our broad outlines are moving in a northeasterly direction, up and to the right. But the problem is the various waves of this disease. We have had false starts and false stops.
Q: How must the economy change, how must we change to deal with the coronavirus?
A: We are coming to realize we will never eradicate this disease. We have to think of this disease as a new species that lives among us. We have to figure out ways to coexist with it. We are finding ways to do that.
Q: Is the tech exodus real or is it a myth?
A: The tech exodus is exaggerated.
Q: What makes you say that?
A: The first question is are people leaving the Bay Area? Working remotely doesn’t mean your job has left the Bay Area. Those workers will come back to the Bay Area as restrictions are lifted and more work takes place in person. People may be floating around but the jobs have stayed here.
Q: What about some of the corporate departures?
A: In Silicon Valley, we have had a sum total of four companies that moved their headquarters out of California. Tesla, Oracle, HPE, Palantir. Four data points isn’t enough to call that a trend. And these four cases all have unique backstories. The CEOs of these four companies that left departed for reasons that seemed to be personal for them. And more importantly, the workforce didn’t follow the CEOs.
Q: Are you encouraged by the big leases and property purchases by Facebook, Apple, Google, LinkedIn, Amazon and others in the South Bay?
A: The commercial real estate activity shows the strength of the regional economy, the appeal of Silicon Valley. It shows the health and vitality of these large tech firms. It shows these tech companies have deep roots. It would be no small thing for them to pull up stakes and go elsewhere. It’s more than a huge headcount. They have made massive commitments to Silicon Valley.
Q: Will companies return to the office in a substantial way?
A: Our future is hybrid work. We will return to the office but we won’t return five days a week. Tech companies will allow employees to create their own mix. Flexibility in schedules will come to be seen as a worker’s right.
Q: Is there a way to turn the corner on the region’s housing problems?
A: Our elected city officials are now referring to the housing situation as a crisis. For the first time, our elected officials are starting to have the heft and the stamina to face down the NIMBY voices in the council chambers. You have a strident governor and an energized Legislature saying that if cities don’t act, the state will intervene.
Q: What is the outlook for the Silicon Valley economy?
A: The outlook is bright. I am not a Pollyanna. I am speaking in a neutral, clinical way. Our economy was on a nine-year tear of growth and expansion and the only reason that nine-year tear was terminated was because of the pandemic. Job gains are happening. The tech economy is doing what is always does after a downturn, which is to shift into promising new areas. Restructuring is going on. But Silicon Valley’s economy can handle that. All the fundamentals are in place for more growth.
RUSSELL HANCOCK
Job: President & Chief Executive Officer, Joint Venture Silicon Valley and president of the Silicon Valley Institute for Regional Studies. Adjunct Professor, Public Policy Program, Stanford University
Age: 59
Birthplace: Rockledge, Florida
Grew up in: Kent, Washington
Residence: Palo Alto
Education: Harvard University, B.A. in Government; Stanford University, Ph.D. in Political Science
Family: Married. Three children, three grandchildren.
FIVE THINGS ABOUT RUSSELL HANCOCK:
1. Married for 37 years to Marguerite Gong Hancock, who is vice president of innovation at the Computer History Museum.
2. Is an ordained minister and just completed a nine-year term in a leadership role in a local branch of the Church of Jesus Christ of Latter-Day Saints.
3. Leads a parallel life as a concert pianist, appearing as soloist with symphony orchestras across the United States. Founder of The Saint Michael Trio, artists in residence at Montalvo Arts Center.
4. Runs half-marathons.
5. Current books: “The War for Kindness” by Jamil Zaki, “Truman” by David McCullough, “Why Liberalism Failed” by Patrick Deneen.