San Jose: Economy

Major Industries and Commercial Activity

The rapid expansion of high-technology industries triggered uninterrupted growth in the Silicon Valley—San Jose and Santa Clara County—from the 1950s through the early 1980s. The 1985 recession, however, left a stagnant economy, pointing to a need to diversify the economic base of the area. Studies indicated that high-technology companies had to move toward decreased reliance on the defense industry. By the early 1990s businesses in San Jose and Santa Clara County showed less than 20 percent of their budgets devoted to government contracts. The city was encouraged by a 1992 study that reported the nation's beleaguered semiconductor industry claimed 43.8 percent of the world market, up from a low of 36.9 percent in 1988.

By 1997 the nation was riding the wave of a booming New Economy—involving the creation of new companies that put the Internet to use to change the way business is done. High technology had become a major factor in the economic growth of U.S. cities, and San Jose was at the center of it all. By 2000 San Jose was a mecca for hot startup companies and venture capital dollars. San Jose, and in particular the Silicon Valley region, is a hotbed of technology and technological innovation. The area has received more patents than any other technology region in the United States. Technology businesses centered here continue to grow and expand in the twenty-first century, as does the growth of service and support businesses to the industry.

Incentive Programs—New and Existing Companies

Local programs

The city of San Jose adopted a Local Preference Policy in May 2004. The policy works to encourage local companies to work with other local companies and the city to promote further job growth for residents and to keep "more of the City of San Jose's spending within the regional economy." The Local Preference Policy goes hand in hand with the Small Business Opportunity Program, which works to smooth the process for small businesses of selling their products and services to the city.

A variety of loans, bonds, and special funds are available to local businesses in San Jose. Among them are the Development Enhancement Special Fund, which helps businesses secure loan funds for expansion, working capital, inventory, or other qualified business expenses; Industrial Development Bonds offer financing options for manufacturing firms that are job-generating; the Lenders for Community Development program provides access to small business loans and lines of credit; and the Revolving Loan Fund makes funds available to small businesses for a variety of uses.

The San Jose Silicon Valley Chamber of Commerce works to develop and maintain the metropolitan area economy. Their particular focus is on aiding small and medium-sized companies involved in international business. The chamber's international trade program includes seminars, networking events, and exhibitions. The San Jose Downtown Association also works to stimulate and improve business conditions. The SBA/CiscoSystems/San Jose Entrepreneur Center provides services to entrepreneurs and small businesses.

State programs

An 18-square mile state-designated Enterprise Zone offers businesses operating in the zone significant tax savings and other financial benefits. The zone consists of San Jose's downtown area and benefits retail, commercial, and high-tech businesses located there. Benefits of operating in the Enterprise Zone include Sales and Use Tax Credits; Hiring Tax Credits; Net Operating Loss Carryover and Net Interest Deduction for Lenders programs; and a Business Expense Deductions program. San Jose is also a designated Foreign Trade Zone, which allows companies to reduce, delay, or eliminate customs fees on imported goods. The Silicon Valley Export Assistance Center offers state and government programs that assist companies who wish to export goods.

Job training programs

The Silicon Valley Workforce Investment Network works with local businesses and residents. The network's one-stop system offers resources for job seekers, as well as services to businesses that include pre-employment screening, access to qualified applicants, training programs, and assistance with employee transitions.

Items and goods produced: missiles; rocket boosters; computers; atomic electrical equipment; fruit, vegetable, and fish cans; dairy products; chemicals; aluminum; paint; fiberglass; matches; medical equipment

Development Projects

In 2003 and 2004, more than 240,000 square feet of retail space was added in downtown San Jose. The Neighborhood Business Districts (NBD) program was established as part of an effort to boost retail business in San Jose's older neighborhoods; its efforts have resulted in 40 new restaurants and retail stores opening among the districts by early 2005. CIM Group's Central Place was approved in early 2005; construction on the downtown mixed-use highrise housing project will begin in fall 2005.

A massive plan for the redevelopment of North San Jose, or the Innovation Triangle, is on the ballot for city council to vote on in spring 2005. The North San Jose 2030 plan calls for a redevelopment of the approximately 42 million square feet of industrial space in the Innovation Triangle, which is currently home to more than 1,200 multinational companies. The plan cites that the space is currently "functionally obsolete," and calls for renovations as well as an additional 26.7 million square feet of new research and development space and office space, 32,000 new housing units, and 1.4 million square feet of retail space.

A $2.8 billion expansion of the San Jose International Airport was underway in 2005, with phased completion dates and expansions and improvements ranging from new concourses and parking garages, terminal and roadway improvements, and an Automated People Mover. When completed in 2015, the airport will serve 17.6 million passengers annually, up from 11.5 million.

Economic Development Information: San Jose Silicon Valley Chamber of Commerce, 310 South First Street, San Jose, CA 95113; telephone (408)291-5250

Commercial Shipping

Nearly half of the traffic at San Jose International Airport is business related, which makes the facility an important factor in the Silicon Valley economy. Revenues from freight shipments average more than $10 million annually; cargo handled at the airport in 2004 exceeded 5 million pounds. Four air cargo carriers and several air freight services maintain facilities at the airport. Two major rail freight lines and a number of motor freight carriers also operate in the metropolitan area.

Labor Force and Employment Outlook

According to San Jose's Office of Economic Development, more than 85 percent of the region's new jobs come from companies that are less than 10 years old. A well-educated and abundant work force coupled with the great quantity of high-level jobs created annually combine to create a shortage of qualified employees in the region. With more than 7,000 technology companies, the technology industry is responsible for employing more than 300,000 people.

The following is a summary of data regarding the San Jose metropolitan area labor force, 2004 annual averages.

Size of non-agricultural labor force: 859,900

Number of workers employed in . . .

natural resources and mining: 100

construction: 41,700

manufacturing: 170,100

trade, transportation and utilities: 130,000

information: 32,700

financial activities: 35,000

professional and business services: 165,900

educational and health services: 94,500

leisure and hospitality: 69,800

other services: 24,900

government: 94,700

Average hourly earnings of production workers employed in manufacturing: $17.21

Unemployment rate: 6.2% (January 2005)

Cost of Living

San Jose suffers from a severe shortage of affordable housing and is among the most expensive cities to live; conversely, San Jose residents also have the highest disposable income in the nation.

The following is a summary of data regarding key cost of living factors for the San Jose area.

2004 (3rd Quarter) ACCRA Average House Price: $766,310

2004 (3rd Quarter) ACCRA Cost of Living Index: 170.8 (U.S. average = 100.0)

State income tax rate: Ranges from 1.0% to 9.3%

State sales tax rate: 6%

Local income tax rate: None

Local sales tax rate: 1.25%

Property tax rate: Average 1.1% of full cash value

Economic Information: San Jose Silicon Valley Chamber of Commerce, 310 South First St., San Jose, CA 95113; telephone (408)291-5250; fax (408)286-5019; email info @sjchamber.com. State of California, Employment Development Department, 800 Capitol Mall, MIC 83, Sacramento, CA 95814

San Jose: Recreation

Sightseeing

Most of the attractions in San Jose are related to the natural beauty of the area or to its historical past. Kelley Park is a popular site, offering a variety of diversions, including Happy Hollow Park and Zoo where visitors can enjoy family-oriented amusements and view wildlife in a 12-acre natural setting. The 16-acre San Jose Historical Museum on the park grounds features a recreated turn-of-the-century town with such exhibits as a working blacksmith shop, a Victorian home, and a doctor's office. Also located in Kelley Park is the Japanese Friendship Garden, featuring flowering trees and shrubs, waterfalls, and koi fish. Other botanical gardens in San Jose are Overfelt Botanical Gardens and the Municipal Rose Garden.

Alum Rock Park is a wildlife refuge containing mineral springs, trails, and picnic facilities; the Youth Science Institute based in the park offers educational programs and special events to acquaint children with nature. Ardenwood Historic Farm in neighboring Fremont is a working farm that demonstrates agrarian life from 1880 through the 1920s; among the exhibits are soap and candle making and the planting and harvesting of crops with horse-drawn equipment.

Especially popular with tourists is the Winchester Mystery House; according to legend, this "haunted" Victorian mansion, containing 160 rooms, was built by the wealthy but eccentric widow of the maker of the Winchester rifle to appease the spirits of the rifle's victims. Nationally known for its table wines, the San Jose area boasts dozens of wineries; many offer wine-tasting and tours of their facilities. Several theme parks operate in Santa Clara County, including Paramount's Raging Waters in San Jose's Lake Cunningham Regional Park and Paramount's Great America in nearby Santa Clara.

Arts and Culture

San Jose is becoming a regional center for the arts as local performing groups and organizations consistently draw larger audiences from throughout the Bay Area. A wide range of theatrical, musical, and dance performances is presented at the Center for the Performing Arts and the Montgomery Theater downtown.

The American Musical Theatre of San Jose entertains capacity crowds with three to four annual Broadway musicals. The San Jose Repertory Theatre produces classic and contemporary drama, and plays for children are staged by the San Jose Children's Musical Theater. The San Jose Symphony and Opera San Jose present full subscription seasons. The Ballet San Jose Silicon Valley is considered one of the country's most innovative ballet companies, with a repertoire of more than 120 modern and traditional classical ballets. HP Pavilion hosts varied performers such as U2 and Mormon Tabernacle Choir.

San Jose's museums and galleries specialize in a variety of fields. Attractions include the Children's Discovery Museum, offering hands-on exhibits, and The Tech Museum of Innovation, offering an IMAX theater and interactive experiences in new technologies. The Rosicrucian Egyptian Museum features the city's only planetarium as well as astronomical and scientific displays; a full-scale Egyptian tomb exhibit; and a collection of Egyptian artifacts.

The San Jose Museum of Art features changing exhibits of American art. The San Jose Museum of Quilts and Textiles, one of the few museums of its kind in the country, provides a showcase for the history of quilts and textiles. The work of local and Bay Area artists is shown at the Institute of Contemporary Art and at the Works Gallery.

Arts and Culture Information: San Jose Convention and Visitors Bureau, 408 Almaden Blvd., San Jose, CA 95110; telephone (408)295-9600; toll-free (800)726-5673

Festivals and Holidays

Special events and celebrations take place in the San Jose area throughout the year, many of them focusing on the cultural heritages of the region's diverse population. Winter events include January's San Jose International Auto Show; in February, the Vietnamese Spring Festival and Parade offers food, entertainment, games, and other fun highlighting Vietnamese culture in the city. Spring offerings include the San Jose Art Festival, a juried art show; and the Golden Circle Theatre Party, an annual black-tie benefit, both in March. April's annual Iris Show is a favorite of gardeners and iris aficionados; May brings cultural celebrations including the Nikkei Matsuri, Cinco de Mayo Parade and Festival, and the Zee Heritage India Festival. Summer events include the Comcast Jazz Festival and the weekend Downtown Farmers Market. Fall's offerings include dance and arts festivals, Halloween at Bonfante Gardens, and the Silicon Valley Marathon. San Jose's year winds down with a Holiday River Parade and Lighting Ceremony, and the Nuestra Navidad, an celebration of Christmas in the Mexican tradition.

Sports for the Spectator

San Jose is in an advantageous location for fans of professional sports. The National Hockey League's San Jose Sharks play at the HP Pavillion. The HP Pavillion also hosts the San Jose Stealth lacrosse and AFLs SaberCats football teams, as well as figure skating, boxing, and other sporting events. Major league soccer's San Jose Earthquakes play at San Jose State University's Spartan Stadium. The San Jose Giants, the farm club for the San Francisco Giants National League baseball team, play their home games at Municipal Stadium in San Jose. Horse racing is on view at Bay Meadows Racecourse in San Mateo and at the Santa Clara County Fairgrounds.

Several professional teams compete within driving distance of San Jose; among them are baseball's San Francisco Giants and Oakland Athletics, and Oakland's Golden State Warriors of the National Basketball Association (NBA).

Sports for the Participant

A variety of neighborhood and regional parks in the San Jose area provide facilities for a variety of activities such as water sports, baseball, tennis, golf, hiking, horseback riding, and wildlife study. San Jose's 144 large and small neighborhood parks and gardens, and another 9 regional parks, are maintained by the city; especially popular are Almaden Quicksilver Park, Alum Rock Park, and Lake Cunningham Regional Park. Numerous reservoirs and lakes are located throughout the region for sailing, waterskiing, and windsurfing. A number of golf courses exist in the area, including two Jack Nicklaus-designed golf courses, and the new Los Lagos Golf Course spanning Coyote Creek.

Shopping and Dining

With several major and outlet malls, regional shopping centers, and myriad neighborhood stores and specialty shops, San Jose can meet the needs of most consumers. San Jose's largest shopping center is Eastridge; a major renovation scheduled for completion in 2005 will offer shoppers one million square feet of shopping, dining, and entertainment options. The San Jose Flea Market is one of the nation's largest flea markets and attracts more than 2,000 sellers and more than 80,000 shoppers per week to its 8 miles of corridors and alleys. Shoppers will find anything from antiques and collectibles to freshly-made foods. The "Produce Row" section of the market is touted as California's largest farmer's market.

Restaurants are plentiful in San Jose, offering American cuisine and ethnic specialties ranging from German and French to Mexican, Persian, Moroccan, and Thai dishes. Several authentic Japanese restaurants are clustered in historic Japantown. Santa Clara Valley wineries combine brunches, luncheons, and picnics with wine tastings; the area is noted for its Chardonnay, Zinfandel, and Johannisburg Riesling wines.

Visitor Information: San Jose Convention and Visitors Bureau, 408 Almaden Blvd., San Jose, CA 95110; telephone (408)295-9600; toll-free (800)726-5673

San Jose: Education and Research

Elementary and Secondary Schools

Fourteen school districts serve the population of San Jose, including the largest, San Jose Unified School District. News in 2005 was of the district's continuing budget difficulties, with the district facing a $9-11 million deficit for the 2005-2006 school year and a $11-13 million deficit for the following year. Cited as contributing to the crisis was a steadily declining enrollment, a decrease in state funding, and increases in operational expenses; of special concern are possible school closings.

The following is a summary of data regarding the San Jose Unified School District as of the 2002–2003 school year.

Total enrollment: 32,612

Number of facilities elementary schools: 27

junior high/middle schools: 7

senior high schools: 7

other: 1 college preparatory

Student/teacher ratio: 21.5:1

Teacher salaries (2002-2003)

Minimum: $33,128

Maximum: $72,665

Funding per pupil: $8,546 (2001-2002)

More than 60 private and parochial schools serve San Jose.

Public Schools Information: San Jose Unified School District, 855 Lenzen Avenue, San Jose, CA 95126; telephone (408)535-6000

Colleges and Universities

Based in San Jose is San Jose State University, the oldest public institution of higher learning on the West Coast, as well as one of the largest universities in the 23-campus California State University system. San Jose State University educates nearly 30,000 students and offers 134 bachelor's and master's degrees in 110 concentrations; the university prides itself on being the top supplier of engineering, computer science, and business graduates to the Silicon Valley high-tech workforce. The San Jose/Evergreen Community College District is comprised of San Jose City College and Evergreen Valley College; both award associate of arts and science degrees, and occupational and technical training to their more than 30,000 students. The University of Phoenix-North California Campuses has a facility in San Jose, which awards bachelors and masters degrees. Also located in the San Jose area are technical and vocational schools, adult learning centers, and extension facilities. Several colleges and universities—some of them considered among the best in the nation—are within driving distance of San Jose. They include Stanford University, Santa Clara University, and the University of California campuses at Berkeley and Santa Cruz.

Libraries and Research Centers

The San Jose Public Library system operates a main facility, 21 branches, and a bookmobile. Library holdings consist of more than 1.9 million items. The newly-constructed $177.5 million Dr. Martin Luther King Junior Main Library opened in 2003. The new building, 7 years in planning, was a joint development effort between the city, San Jose State University, and the San Jose Redevelopment Agency. With 8 floors and more than 475,000 square feet, the library is among the largest in the country and serves more than one million visitors annually. The Main Library also houses a special collection in the California Room, featuring state and local history from 1849 to the present; the Cultural Heritage Center; and the Ira F. Brilliant Center for Beethoven Studies. In early 2005 three new neighborhood facilities had opened, adding square footage and replacing older library buildings; at the same time, four branches were closed and construction was beginning on new facilities.

The San Jose State University library, now part of the San Jose Public Library's Dr. Martin Luther King Junior Main Library, houses the Steinbeck Research Center, which contains the writings and memorabilia of novelist John Steinbeck, a San Jose area native, as well as the world's largest collection of the writer's first edition books.

San Jose institutions conduct research activities in such fields as gerontology, the environment, and telecommunications. IBM's Almaden Research Center conducts industrial research in computer science, software, computer storage technology, and physical and materials science and technology.

Public Library Information: Dr. Martin Luther King, Jr. Main Library, 150 E. San Fernando Street, San Jose, CA 95112; telephone (408)808-2000

SAN JOSÉ

SAN JOSÉ, California, is located seven miles below the southern tip of San Francisco Bay, on Coyote Creek and the Guadalupe River, fifty miles southeast of San Francisco. It is the seat of Santa Clara County. It was founded in 1777 as San José de Guadalupe under the Spanish Reglamento Provisional because the Spanish government wanted to lessen the dependency of the presidios (forts) on the missions for their food supply. It was the first civil town (pueblo) established by the Spanish in what was then known as Alta California. Until the gold rush of 1848 it was the most important town in the province. When California entered the union in 1850, the first state legislature met in San José, but only for a year. Major agricultural products included tree fruits, nuts, berries, vegetables, and livestock, and it was the world's largest dried-fruit packing and canning center.

Beginning with scientific development related to World War II, the entire county became a center for electronics research and space-related technology, ultimately acquiring the nickname Silicon Valley. San José is home to San José State University, the oldest public institution of higher learning in California, founded in 1857. The 2000 census listed the population of San José, the third-largest city in the state, as 894,943.

BIBLIOGRAPHY

Arbuckle, Clyde. History of San Jose. San Jose, Calif.: Smith and McKay, 1986.

McCarthy, Francis Florence. A History of Mission San Jose, California, 1797–1835. Fresno, Calif.: Academy Library Guild, 1958.

Mora Torres, Gregorio. Los Mexicanos de San José, California: Life in a Mexican Pueblo, 1777–1846. 1994.

Winther, Oscar Osburn. Story of San Jose, 1777–1889, California's First Pueblo. San Francisco: California Historical Society, 1935.

Carolle Carter

San Jose: History

San Jose Begins as Agricultural Center for State

San Jose was California's first civic settlement, founded in 1777 by Mexican colonists and named El Pueblo de San Jose de Guadalupe for St. Joseph and the Guadalupe River near the town site. The town was established in order to bring agricultural development to the Alta California territory; each settler was issued animals, farm implements, seeds, and a 10-dollar monthly stipend. These farmers joined Spanish missionaries who were already in the area. The Native American inhabitants of the region were the Olhone; the disruption of their culture by the missionaries and farmers and the spread of diseases eventually led to their virtual extermination.

As a supply station for prospectors during the gold rush, San Jose underwent a population explosion; upon incorporation in 1850 the city's inhabitants numbered 5,000 people. San Jose was the state capital from 1849 to 1851, and then became an important stage and boat link on the route to San Francisco until the advent of the railroad in 1864. Growth continued through the 1880s, reaching a culmination with the real estate boom and bust of 1887 when land sales totaled $2 million per day before the market collapsed. By the turn of the century San Jose was a major center for the cultivation of apricots, prunes, and grapes; with rail connections to other cities, it was also an important regional shipping hub.

High-Technology Revolution

Prior to World War II San Jose, with its 18 canneries and 13 packing houses, was the world's largest canning and dried-fruit packing center. The city also pioneered the manufacture of specialized mechanical farm equipment in California; among the products introduced by local inventors were the spray pump and the steam-powered stemmer-crusher for wine making. In the 1950s, however, San Jose was transformed from a farming community to a high-technology capital by another of its natural resources: silicon. This element is used in making semiconductors, a basic component in high-technology industries. Thus San Jose and Santa Clara County came to be known as "Silicon Valley." Originating at Stanford University in nearby Palo Alto, a vast military-industrial complex, which includes the Ames Research Facility of the National Aeronautics and Space Administration (NASA) at Moffett Field, ultimately spread throughout the Southern Peninsula.

San Jose's largest population boom was triggered by this high-technology revolution, and growth continued unabated from the 1950s through the early 1980s. Buoyed by the success of computer companies, a steady flow of venture capital poured into San Jose and Santa Clara County to finance new firms that sprang up almost overnight. Expansion began to moderate only with the 1985 recession in the computer industry. Unemployment remains relatively low in the San Jose metropolitan area, as more than 20 percent of the semiconductors and related devices made in the United States continue to be produced in the Silicon Valley. The city nevertheless has been faced with problems resulting from uncontrolled development. Steps have been taken toward a solution, in the form of a new light-rail system designed to alleviate traffic congestion and stricter controls on expansion and construction. By the end of the twentieth century, residents and city planners alike were looking ahead. At the start of the twenty-first century, San Jose boasted great economic opportunity, many jobs, and a high standard of living. The area frequently ranks near the top of quality of life studies sponsored by universities and national media.

Historical Information: History Museums of San Jose Archives, 1650 Senter Road, San Jose, CA 95112; telephone (408)287-2290