SAN JOSE, Calif. --
By NBC11's Daniel Garza

The dot-com boom and bust is long behind Silicon Valley. In fact, 2007's productivity gains surpassed the highs of the dot com-boom. Nevertheless, the economic gains are offset by the economic instability that will define 2008, according to a new study.

The 2008 Silicon Valley Index released Tuesday by Joint Venture Silicon Valley Network and Silicon Valley Community Foundation paints a picture of a vibrant and innovative economy where families have to earn high incomes in order to make ends meet.

"The index reflects good news for some in Silicon Valley, rough patches for others and heart wrenching choices for many," said community foundation president Emmett Carson.

The index defines the Silicon Valley region as Santa Clara and San Mateo counties, which added 28,000 jobs from 2006 to 2007.

In general, Silicon Valley workers earn relatively high incomes. Real per capita income is 57 percent higher than the U.S. average. But, the cost of living, including housing, is 47 percent higher than the rest of the nation, according to the index.

"The rapid change imposed by innovation, venture capital investment and globalization among our leading companies keeps Silicon Valley in the world spotlight," said Russell Hancock, president of Joint Venture. "But the volatility of our financial markets, the subprime mortgage crisis and fears of impending recession dims the glow or our workforce."

According to the study, "Economic turbulence is bringing pressure to Silicon Valley workers and their families, particularly mid-wage earners, as they move between jobs and work for small firms that offer fewer benefits."

The index noted that Silicon Valley's population grew by 38,000 people from 2006 to 2007. The region is now home to 2.5 million. The combined populations of San Mateo and Santa Clara County combined is 35 percent foreign-born, while 48 percent speak a language other than English at home.

The study found that disparities in health and education persist by race and ethnicity. High School dropout rates and juvenile offenses increased slightly. Child immunization rates are not improving.

Silicon Valley's exorbitantly priced real estate market yielded a mixed bag in 2007. Foreclosure rates increased by four times over 2006 and rents increased by 7 percent. But, the share of new housing approved near mass transit increased by 55 percent.

The index coincides with Joint Venture's annual State of the Valley conference scheduled for Friday at the San Jose McEnery Convention Center. Keynote speakers will include former U.S. Secretary of Labor Robert Reich