By Tony Romm - 02/11/10 05:22 PM EST
Even Silicon Valley -- once an innovative, lucrative tech hotbed -- has struggled to weather last year's economic recession.
A new report, released Thursday, finds that the 2009 downturn has left many of the region's top businesses hampered by a "new era of uncertainty, with vulnerabilities that could compromise our long-term prosperity."
Those obstacles include withering investment, dwindling finances and increasing competition from other countries, not to mention slimming support from California government and growing unemployment, the report finds. All of those challenges, the Index concludes, have put the region "at risk" and in many ways threatened future innovation.
"2009 was a rough year. We learned the hard way that Silicon Valley is not immune to the larger forces at work in the global economic recession," wrote Russell Hancock, president and CEO of Joint Venture: Silicon Valley Network, and Emmett. D. Carson, president and CEO of Silicon Valley Community foundation.
"Like other regions, we have lost tens of thousands of jobs, absorbed thousands of home foreclosures, and seen our incomes decline," they added. "Despite our many strengths—from talented people to world-class technology—we could not insulate ourselves from the larger economic downturn."
Ultimately, the two trade groups stressed in their report that Silicon Valley businesses still "have many strengths," and they emphasized that the region competes on a "very-high level" with other, similarly advanced tech hubs throughout the world.
But the tone of their latest report was unmistakeably dismal. The Index noted that the region was struggling to attract new workers, as many bright tech minds from other countries were remaining there, as their local economies grow more competitive. At the same time, the state of California was cutting funds to higher education programs that could normally churn out talented workers -- all the while quabbling over already sparse resources that could help Silicon Valley thrive.
While the Index characterized those problems as concerning, they implored other members of the Silicon Valley community to reject "complacency" and begin to innovate new solutions that keep the region competitive.
"From the rise of Asian economies to California’s budget meltdown, our future will in many ways depend on how we respond to forces emanating beyond our region," the report stressed.