Is Silicon Valley becoming a high tech Skid Row?

Falling demand for office space in Silicon Valley saw rent fall by 30 per cent last year as companies in decline continued to close offices and lay off staff.

A lack of 'bums on seats' meant the area, once famed as the heartland of the burgeoning global technology sector, bucked all trends for land prices and rents and it continued in a downward spiral.

Average rent for high-tech office space fell from $21.48 per square foot in the first quarter of 2002 to around $15.24 at the end of the year. This time last year concerns were already being raised about the rapid decline of Silicon Valley (see http://www.silicon.com/a50556 for more) and it's continued nosedive in the ensuing 12 months will have done little to allay such fears.

At the height of the dot-com boom, floor space in Silicon Valley would have set you back around $50.88 per square foot, according to a report from Reuters.

Similarly unemployment in the region has risen from 1.3 per cent at the height of the dot-com boom in late 2000 to around 7.8 per cent currently.