Silicon Valley's optimism isn't shared by the people who work there. According to the AP (http://www.siliconvalley.com/mld/siliconvalley/9350384.htm), area employees are the most pessimistic in the United States. Twenty-seven per cent fear losing their jobs, compared to 18 per cent nationally. Although the unemployment rate has fallen, few new jobs have been created, and laid-off workers have simply moved on.

There's another big reason for the pessimism: offshoring. The migration of white collar jobs is expected to hit the IT sector harder than others, with one in six jobs vulnerable. States that worked hard to attract high-tech jobs are also ruing the decision, and discovering that a more diversified economy is more prosperous during the bust.

However, there may be a more immediate threat to Silicon Valley's prospects than offshore alternatives. After the dot.com bubble burst, the area's housing bubble continued to expand. If the jobs return, employers are likely to look for areas with a lower cost of living, such as Texas and Oregon, Gartner VP Martin Reynolds said recently. ®

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