Shall I dare say the D word - Depression! Ok I've said it.
I have lived in Silicon Valley now for five years moving from Boston in 1999. As an entrepreneur in high tech, I've said it before and it's time to say it again ...we are in a major depression. Yes I used the D word. If your in high tech in Silicon Valley then you're living in a modern day depression. Networking events for entrepreneurs are like soup kitchen lines.
According to an AP story today they agree.
According to the study, the losses were especially pronounced in San Francisco, which saw high-tech employment shrink by 49 percent between March 2001 and April 2004. Boston also suffered disproportionately, with the number of high-tech jobs falling by 34.1 percent.
In talking to close friends who have lived through good and bad cycles (also known as 'spins' in the VC community) they tell me there are great signs of recovery. Key to success is to survive the down cycle and take advantage of the upcycle.
Personally I think that we've seen the worse and signs of investment and innovation are coming back (except the telecom sector - that will be a slow recovery).