1. www.econosystems.com The Sizzling U.S. Economy: Will the SF Bay Area Economy Finally Be Pulled Along? Presented by Anne Ramstetter Wenzel to the Silicon Valley Economic Roundtable December 10, 2003

2. www.econosystems.com Presentation Overview: Facts & Figures of the San Francisco Bay Area. Includes a 9-County Area: Alameda, Contra Costa, Marin, Napa, San Francisco, Santa Clara, Solano and Sonoma Counties. Employment Situation. State of California: Employment Impact. www.econosystems.com

3. Overview (continued) Outsourcing: Impediment to growth? Employment by Industry Office vacancy Rates. Venture capital investing Retail Outlook Q & A www.econosystems.com

4. The SF Bay Area by Land:

5. www.econosystems.com The SF Bay Area Population:

6. www.econosystems.com SF Bay Area Taxable Sales www.econosystems.com

7. The Unemployment Rate is Going Down…

8. www.econosystems.com But so is San Jose’s labor force…

9. www.econosystems.com The two surveys show a different story:

10. www.econosystems.com State & local government employment was a source of growth until this year:

11. www.econosystems.com Outsourcing of jobs has occurred mainly in business services…

12. www.econosystems.com And Manufacturing…Hitting SF & San Jose areas the hardest

13. www.econosystems.com Low demand for workers is dampening demand for office space:

14. www.econosystems.com Venture capital investing continues to be concentrated here. Funding levels are lower than the peak but still healthy. $1.4 billion in Bay Area VC investments during the 3 rd quarter of 2003. –The Bay Area received 1/3 the national total. –More than $860 million invested in October & November.

15. www.econosystems.com Retail Outlook is Modest Last year, sales were down. Department store inventories to sales ratio is at a historical low. –Low inventories may inhibit sales growth even in the face of stronger demand. –Specialty and clothing stores performing best. The season should be better than last year.

16. www.econosystems.com The Outlook: Modest Growth… …tempered by: – continued overseas outsourcing and automation of software programming. –California’s budget woes, causing falling government employment & freezing of “non- essential” California contracts. But the tech recovery and overall brisk national economy will weigh in for growth.

17. www.econosystems.com Recession Recovery & Forecast: