Cassidy: Globalization complicates Silicon Valley s regional rivalries

.2 million grant. San Antonio kicked in $6 million, while encouraging the county government, the state university system and a local research foundation to add $4 million more to make the move easier for InCube and its companies.

"We were able to do that," Castro, 36, said, "mostly because San Antonio hasn't been as hard-hit as most communities in the United States."

I'll say. San Jose's Redevelopment Agency, for instance, has been pummeled by the recession. Its staff has been cut roughly in half since fall 2009. Still, Executive Director Harry Mavrogenes insists the agency is determined to keep companies in San Jose and help them grow. The agency says that since 2007 it's spent $10 million to keep or attract 11 companies. Mavrogenes points to a new Business Development Division and a $3.5 million agency fund to invest in the equipment that companies need to expand. Which is nice, but which is also about a sixth of what InCube got to grow in Texas.

And he has a surprising reason for optimism: There has been an uptick in manufacturing in the valley.

"Costs are going up in India and costs are going up in China," he said, "and believe it or not, people are finding it competitive to have manufacturing jobs here."

The numbers are not huge and are generally in the cleantech field or involve businesses that have developed specialized techniques that they want to keep close to protect them from intellectual property pirates.

Still, we should treasure whatever manufacturing jobs are finding their way to the valley. They may be the most valuable jobs we can create right now. Russell Hancock, CEO of think tank Joint Venture: Silicon Valley Network, has been alarmed for years by the disappearing opportunities in the valley for the middle class. The ranks of the rich are prospering and growing, he said. And the number living in poverty is on the rise, while solid middle-class work is disappearing.

"We really are becoming this high-cost community," Hancock said, "where it's the ultrarich and then all the people who take care of them."

It was Hancock who got me thinking about corporate headquarters and whether landing one really does a region much good if the headquarters doesn't come with the jobs for the rest of us. You're probably thinking a mayor like Castro, a Democrat who Texans are already talking about as an eventual presidential candidate, would be smart enough to have figured that out.

He is.

"Maybe the best economic development scores are not the headquarters," Castro said, "but the 1,500 or 2,000 jobs that are really the meat and potatoes of what a company does."

Which has me thinking that Silicon Valley would be wise to keep its eye on the meat and potatoes that it still has.

Contact Mike Cassidy at mcassidy@mercurynews.com or 408-920-5536. Follow him at Twitter.com/mikecassidy.

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