STEVE INSKEEP, Host:
In California's Silicon Valley, the economy is showing signs of a turnaround. Social media companies like Twitter and Facebook are both surging. And overall there's even been an uptick in hiring. Still, the recession has done a lot of damage, as NPR's Jim Zarroli reports.
JIM ZARROLI: Tim Leberecht is chief marketing officer.
TIM LEBERECHT: Many people may have products that we designed in their bathroom or in their living rooms. They don't even know that we were the secret force behind them.
ZARROLI: Ken Rosen, an economist at the University of California at Berkeley, says confidence is slowly coming back to the valley.
KEN ROSEN: I go down there at least once a month and the energy is so palpable again in the startup world, the venture world.
ZARROLI: Russell Hancock is president of Joint Venture Silicon Valley Network, a kind of public-private forum for discussing regional issues.
RUSSELL HANCOCK: There was a period where we thought Silicon Valley might be immune to this whole thing. We're a technology economy, we're export oriented. But it turns out Silicon Valley is like any American region. We had people in a lot of pain and stress.
ZARROLI: Hancock says last year the economy added more than 12,000 jobs, the first net increase in years. But the jobless rate is still nearly 10 percent. Hancock says the gains in the private sector are being offset by a big drop in state and local government jobs.
HANCOCK: For the last year or two, we were using stimulus funds locally. That's now completely dried up, and so now local governments are facing the full brunt of this recession.
ZARROLI: He also says there's a fundamental difference in the job market today and it may not bode well for the region. Big companies like Intel and Hewlett- Packard used to hire thousands of people in the area.
HANCOCK: Companies are no longer infatuated with size. Because this is how you compete. So companies today are hiving off entire divisions and they're taking a different approach.
ZARROLI: In part they turn to freelancers, consultants, and smaller local companies. Frog Design employs about 100 people at its headquarters, and the company is careful about hiring. Tim Leberecht says getting too big too fast would undermine the culture of innovation the company likes to foster.
LEBERECHT: This place would be very, very different if 500 people worked here. We wouldn't be able to create the kind of culture that we want to attract the types of people that we need.
ZARROLI: Jim Zarroli, NPR News, San Francisco.
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