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September 2011, Vol. 134, No. 9
Survival and growth of Silicon Valley high-tech businesses born in 2000
Tian Luo and Amar Mann
Tian Luo is an economist in the San Francisco regional office, Bureau of Labor Statistics; Amar Mann is a supervisory economist in the same office. Email: luo.tian@bls.gov or mann.amar@bls.gov.
High-tech businesses born in 2000 in the Silicon Valley had below-average survival and employment growth rates from 2000 to 2009, except for the year 2000, during which surviving firms of the cohort experienced significant growth that carried over for 8 years; year-specific and industry-mix effects, however, weaken the latter conclusion
During the late 1990s and 2000, a flurry of investment in Internet and technology companies gave rise to the "dot-com bubble." This financial bubble reached its peak on March 10, 2000, when the NASDAQ (formerly the National Association of Securities Dealers Automated Quotations) attained a level of 5,132, about 4 times higher than it had been 3 years earlier. As the gap between the valuation and the performance of many companies became apparent, Internet stocks tumbled. The nasdaq reached its low point on October 9, 2002, when it fell to 1,114, roughly one-fifth the level at its peak. "Ground zero" during this period of boom and bust was Silicon Valley, an area centered in and around San Jose, California. The area was home to many of the Internet-based companies that came to typify the dot-com frenzy of the era.
Quarterly Census of Employment and Wages
Crash and reboot: Silicon Valley high-tech employment and wages, 2000–08.—Jan. 2010.
Births and deaths of business establishments in the United States, The.—Dec. 2008.
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