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SAN FRANCISCO - 11/10/03 - Technology jobs continue to decline in San Francisco and San Jose, but the technology-led economic downturn is temporary, suggests a recently released report compiled by the Federal Reserve Bank.
 
The report indicates that the Bay Area region is better positioned for recovery than Los Angeles, which suffered through a similar crash initiated by the collapse of the aerospace industry in the late 1980s.

The Bay Area is one of the leading information technology (IT) centers in the nation, the report says. The region's focus on innovation and technology made it a primary beneficiary of the national IT investment run-up during the latter half of the 1990s.

However, since December of 2000 nearly one in ten jobs have disappeared, with the tech sector accounting for half of the loss.

The report notes that the region has lost 350,000 jobs, or 9.5% of total payroll and compares it to the national job drop recorded at 2% and the Los Angeles falloff registered at 12.3% during the aerospace recession.

In addition, the area lost a larger share of non-tech jobs than other tech centers in the last several years, particularly in the airline and hotel businesses.

The report's authors assert that the Bay Area is not likely to find itself in the same spot as Los Angeles did, where by the mid 1990s the role of the aerospace industry was significantly diminished.

Instead they argue that the region "will not only retain its position as the world's leading tech center due to its key resources such as universities, research labs and skilled workforce, but that its tech industry is more than likely to rebound in the near future."

To obtain a full copy of this report, please visit the Federal Reserve Bank of San Francisco website at: http://www.frbsf.org/publications/economics/letter/index.html.

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