San Jose, California's third largest city, has been growing rapidly since the 1950s, when tech companies started operating in and around the city. However, in 2016 San Jose, often dubbed 'the capital of Silicon Valley', is stronger than ever, economically speaking. The city is either home or a close neighbour to companies such as Google, Facebook and Apple, all currently making record profits and riding high on the wave of a tech boom. Riding on the back of that success is San Jose which, according to Bloomberg research, with a gross metropolitan product per capita estimated at $105,482, is the wealthiest city in the US.
Talking to fDi about his city's economic situation, Sam Liccardo, the mayor of San Jose, describes himself as “the luckiest of mayors". The statistics back up Mr Liccardo's claims, as San Jose has one of the lowest unemployment rates in the US. And investments keep pouring in. Just in the last quarter of 2015, Samsung, Apple and Google all made announcements that they all will create jobs in the city, with Samsung set to open its Silicon Valley headquarters in the nothern part of the city, and Apple and Google extending existing premises.
Getting the price right
Being the US's luckiest mayor does not mean that Mr Liccardo's job is free of worries, however, given the the extent to which the tech boom has increased the cost of living in the city. According to Realtor.com, the median price of a house in San Jose metro area is the highest in the US, and rental prices are among the highest in the country. “It is great to see new jobs being created and on top of that, jobs that are very well paid. But we need to make sure that our city remains an affordable place to live for everyone,” says Mr Liccardo.
The number of tech employees living in the city is quickly growing, and so is the city's dependence on the tech industry. “Our economic success these days relies heavily on the tech industry, there is no secret in that,” says Mr Liccardo. “But we have other industries that can are very interesting for investors,” he adds, pointing to real estate and retail-related investments and advanced manufacturing. “You might not associate San Jose with manufacturing but this industry is a great fit for our city. For high-value-added production you need engineers colocated with those who can work at an assembly line, and you can find both groups of workers in our city,” says Mr Liccardo.
It might be hard to imagine Apple or Google going bust or relocating any time soon, the same could have been said of Detroit's auto industry a few decades ago. At least San Jose has its eyes on cultivating a more diverse, and therefore future-proof, economy that should serve it well should the hard times hit.