Posted on: Monday, January 14, 2002

San Francisco's ready to bounce back, study says

By Liz Enochs
Bloomberg News

SAN FRANCISCO — The damage done to the nine-county San Francisco Bay area by the bursting of the dot-com bubble won't last, and the region's economy will start to boom again soon, according to a report by a business-government research group.

The San-Francisco-area economy probably will expand by 4.2 to 5.1 percent annually over the next three to five years, boosted by productivity growth, according to a study by the Bay Area Economic Forum. That's faster than the U.S. average of 4.1 percent growth achieved between 1996 and 2000.

From 1995 to 1999, productivity in the Bay area increased at a 5.3 percent annual pace, more than double the 2.5 percent rate of overall U.S. growth in productivity, or output per worker hour, the report said.

"The majority of the Bay area's recent economic gains are actually due to sustainable factors, that if properly shepherded by sound public policy will fuel continued economic growth," said Sunne Wright McPeak, chief executive officer of the Bay Area Council, a business group and partner in the Forum.

Part of the region's productivity boom is a result of higher-than-average prices and a surge in venture-capital investment, the report said.

Most of the growth spurt can be traced to the Bay area's concentration of highly skilled workers and industry-leading companies, as well as a business culture that fosters innovation, the report said.