Despite the 2.4 percent surge in US economic growth in the second quarter of 2003, joblessness in the premier US high-tech center still topped eight percent.

After losing nearly 200,000 jobs in the economic crash of 2001, unemployment in the area is much higher than the national average of 6.2 percent.

"This region will tend to recover later than the country because we flew so high and crashed so far," explained David Shiver, vice president of consultant Bay Area Economics.

The arc between San Jose and San Francisco was home to roughly ten percent of the US high tech industries when anything seemed possible in the 1990s.

Silicon Valley led US growth driven by venerable electronics companies such as Intel, Hewlett-Packard and Sun Microsystems, as well as thousands of new startups that developed Internet, telecommunications, medical and pharmaceutical technologies.

But two years after the meltdown of hundreds of cutting-edge businesses, there are few signs of a recovery.

In San Jose 8.5 percent of workers are unemployed. In San Francisco to the north the rate is six percent even as the city shrinks amid an exodus of laid-off workers.

However, layoffs have slowed, consumer confidence is up slightly and more companies are reporting rising profits.

Computer chip maker Intel, an area bellwether, reported in July that it had doubled its profit in the first half of 2003 over the same period last year.

Reflecting this, the S and P technology stock index soared by 50 percent since October. Wall Street welcomed a handful of new public listings of Silicon Valley companies in June and July. During 2002, it was almost impossible to take a fledgling technology stock public.

A survey released last week by Santa Clara University says tech executives are more optimistic about their companies' future than they were six months ago.

"It remains to be seen if this steady increase in optimism translates into new investments and business growth," said professor Robert Hendershott, who oversaw the survey.

While the 1990s expansion was Internet-driven, no one knows what new technology might spark another boom.

Some economists think the next round of growth will not generate nearly the same number of jobs.

Stephen Levy, director of the Center for the Continuing Study of California's Economy in Palo Alto, said that the turnaround in profits at tech companies is largely rooted in boosted efficiency.

"There's no job pick-up in the area," Levy said.

"The companies can recover and their sales can grow without any hiring.

"The San Francisco Bay area is doing worse than others because we have a high concentration of technology business."

And the push for efficiency has sent jobs to less expensive countries such as India, China and Russia, Shiver said.

In July, software maker Siebel Systems Inc. announced it was laying off 490 workers and sending some of the jobs abroad.

Connecticut-based consultant Gartner Inc. predicts that a half-million jobs in US high-tech industries could be exported by 2004.

Despite high labor costs, the San Francisco Bay will remain the US high-tech center, analysts said.

The area's dozen universities and 480 company headquarters make for an unparalleled concentration of skills and brainpower.

Shiver pointed out that private companies, government agencies and regional universities are investing some 45 billion dollars this year in research and development.

But the key is in new companies.

"The future of the valley is startups," said Levy.

Venture capital investments rose eight percent between April and June, to 1.3 million dollars, the first quarterly increase since 2000, according to consultant Venture One.

But that's just a fraction of the eight billion dollars lavished on young companies each quarter in the peak year, 2000.

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