The Bureau of Labor Statistics in its Regional Report dated August 2009 says "Of the 11 industries analyzed in this report, 8 experienced employment declines and 3 industries—pharmaceuticals, aerospace, and scientific research—exhibited employment growth during the 2001 to 2008 period. " The BLS report states that employment in silicon valley declined by 17% in the 2001-2008 period, while the average wages grew approximately 36% in the same time frame. In March 2000, the NASDAQ reached a peak of 5130. But by December 2000, the index had dropped more than 50% to stand below 2500. The employment rate took a big hit and Santa Clara county posted a 7.6% unemployment rate soon. By 2004, however, jobs in the hi-tech sector returned and by 2008, jobs in specific sectors such as Aerospace, Pharmaceuticals, and scientific research had added enough jobs to exceed their pre-recession employment levels. While Silicon Valley's jobs stagnated between 2001 and 2008, nationally, the jobs grew by 4%, according to the BLS report.
Despite this downturn, silicon valley continues to be the hot bed of innovation: in 2008, 11 out of the top 20 cities issuing patents in the Unites Stated were in the Silicon valley.
What about the recent recession, you ask? According to the BLS report, despite the recession that began in December 2007, Silicon Valley high-tech employment grew by 2.5% during 2008; however average wages fell by 1.5% during this period. Further, the BLS states that sample data so far and anecdotal evidence suggests that high-tech employment declined in 2009, perhaps negating the 2008's marginal employment gains. For more information visit US' Bureau of Labor statistics site (http://www.bls.gov)