BayRisk Insurance Brokers specializes in technology accounts. We protect software, hardware, internet and technology consultants to name a few. We have seen a recent surge in our clients adding staff, adding space, buying buildings, and an overall growth in revenue. This is great news! We love to see small technology based businesses succeed. However this raises the question of are we looking as the next technology bubble? Here is an article just on the subject...
Tech bubble? Not yet, but don’t get too excited either
There are rumblings around town about a tech bubble like the one that burst following the dot-com boom in the late 1990s. Yet while tech growth in San Francisco has unquestionably fueled the economic recovery here, there is insufficient evidence to make the case for a bubble. Nonetheless, it is not too early to start thinking about what a bust could mean for the economy.
At the annual San Francisco Chamber of Commerce ForecastSF event, Wells Fargo Securities chief economist John Silvia presented data showing that high-paying tech jobs are boosting housing prices. The last time San Francisco saw rents increase like this was during the dot-com boom, and we all remember how that ended.
But there are stark differences between the last boom and this one. For instance, Silvia noted during an interview that a lot of money was thrown at startup companies in the last tech boom, and IPOs were the norm even for businesses that had barely gotten off the ground.
This time around, they are the exception, and even high-profile IPO flops like that of Facebook tend to be connected to real companies with real revenue streams. The majority of the companies raising big money now are ones whose products are already used by large numbers of people.
Mayor Ed Lee, who has positioned tech at the forefront of his economic plans, also believes that talk of a bubble is unwarranted. He said the rush of tech jobs is filling vacancies in office space because of the economic downturn, not building new buildings for companies.
“I don’t think we are really started yet, therefore any predictions of us being in a bubble, to me, don’t even have a premise yet,” Lee said. “We still have a ways to go to fill all of the vacancies.”
Read more at the San Francisco Examiner here...