Gloom, But Not So Much Doom, Here in Silicon Valley
The skies may be dark and pundits are lining up with their dreary predictions, but here in Silicon Valley there are other forces at work that might counterbalance our local pain and even contribute mightily to the national recovery.
On November 14, 2008, Gerald Celente, a renowned US trend forecaster, appeared on Fox Business Network (See the YouTube video of Gerald Celente) and predicted that by 2012 we’d have economic depression, tax rebellions, riots, and more families concerned with buying food than Christmas presents in the United States.
Celente also predicted that in 2009 and beyond food-producing gardens will become common on people’s lawns, as resources generally become more scarce. Other predictions for 2009 and later include a possible revolutionary advance in renewable energy technologies, miracle cures from stem cell research, a shift toward holistic healing practices and a crash of the overpriced college-industrial complex. Celente says to escape the mood of economic depression people will be delighting in entertainment and alcohol.
While I am aligned with many gloomy predictions—including some of what Celente articulates—I can’t buy into the doom scenario with him, particularly for those of us fortunate enough to live and work in the Silicon Valley area. This writer believes that 2009 will surely see a continuing decline, and that it will be at least the end of 2010 before we see any signs of national economic recovery, and this may not come without a major global conflict, of the type we never wanted to see again.
However, Silicon Valley has much going for it and may bounce back sooner and better than the rest of the country. First of all, the drop may not be as precipitous, either in terms of job losses or real estate pain. The last recession was led by technology, and this is a more classic consumer led recession. So, we may be a little more insulated than the last time around.
Also, we have several sectors here that may actually fare quite well during the next several years. Certainly with President Obama’s push for energy independence, green tech may be a real bright spot for us here in Silicon valley. Life sciences also stands ready to continue its climb.
But interestingly, I like Internet opportunities as well. This is because of the wholesale move to smart phones and the accompanying demand for low cost, instant entertainment that will only become more voracious during the difficult economic period ahead of us. Perhaps it represents the ultimate irony: the cause of our last economic meltdown – in 2001 – was the over-hyped Internet companies. Now that sector may actually be part of an economic solution from 2009 onward.
More importantly, I believe our venture capitalists will decide that they need to actively support these sectors, as they have been doing for decades — that is, building companies and jobs for years to come, and all this without 1 cent of TARP bailout money.
Rich Brenner is Founder and CEO of The Brenner Group, one of Silicon Valley’s premier professional services firms. Rich is a veteran executive, entrepreneur, investor, board member, and philanthropist.
Read more about Silicon Valley news, trends, and commentary in The Brenner Banner.
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