There is a growing view that Silicon Valley is in a steep decline. The Valley's unemployment rate is well above the national level. Salaries are down. VC investments are in a slump. Manufacturing is moving to cheaper locations, and other regions - both in the U.S. and overseas - are increasingly competitive.
The New York Times even recently described Silicon Valley as in "what a latter-day Wagner might call the Techiedämmerung." I have no idea what this means, but it sure sounds bad.
But at the same time many Silicon Valley companies are thriving. Apple just reported blockbuster earnings. Google's profitability and growth is staggering, and the next 18 months will see a raft of new Silicon Vally tech millionaires as companies like Facebook, LinkedIn, Zynga and others go public.
Even Valley companies declared dead or severely wounded, liked Yahoo and eBay, are showing signs of life.
Silicon Valley, and the broader Bay Area, is also the home of many thriving tech companies outside of traditional IT spaces. Biotech and health related companies are rapidly expanding. A wide range of clean tech and clean energy companies call Silicon Valley home, and Silicon Valley is becoming a growing power in the increasingly tech-driven advertising, entertainment and publishing industries.
Silicon Valley may be in decline. But it seems more likely to us Silicon Valley is moving through a period of Shumpeterian creative destruction, with new technologies, companies, industries and business models emerging.