did a quick plot of unemployment rate history of silicon (from Employment Development Department website). the idea was to see if the current situation (at 7.8% unemployment as of Dec 2008). the idea was to see when the jobs would start to open up.
purely from corp planning cycles perspective, you can expect companies to plan 2009 as ‘conservative/hunker down’ year. so it would put us at 2010 as the earliest ‘growth’ year.
i am no regression guru, but if you notice, the time spent rising to the peak is much sharper in 2001 cycle than in 1990 cycle (2 yrs vs. 3 yrs). it’s probably even more sharp in 2009 cycle (~ 1 yr). assume the trigger point is around Oct 2008, marked by a VC’s obituary of good times – that puts us at Q4 2009 at the next unemployment peak. due to corp budget cycles, it might more likely be around Q1 2010.
next question is, what’s the peak? my hypothesis is that it’d be less than the 9.1% of 2003. the 2003 cycle was the dotcom bubble, pinching the Valley harder than the rest of the industries and regions. since 2008 is more organic meltdown, and the volume of labor force hasn’t risen as much as it did last time (see chart below), the unemployment rate might top out at 8.25-8.5%.
and when would the good times roll again? based on the same theory of accelerated swings above, i’d say, a year from recovery that puts us into Oct-Dec 2010. apple (or may be google, facebook, whoever) probably would have a killer product for christmas, lifting us to a nice Jan 2011.
loose logic, but that’s what bloggers do.
Speaking of the employment situation, Junior Achievement just put out a new report about how the country needs a more “Entrepreneurial Workforce” to remain competitive. It’s kind of a different way of looking at the problem. Here’s the link http://www.ja.org/files/The_Entrepreneurial_Workforce_full-11.pdf.
thanks for the link. it does make sense that innovation is the primary path out of a downturn.