Bay Area Is the Nation’s Fastest-Growing Economy

The Bay Area has emerged as the nation’s fastest-growing regional economy by several key measures, according to a report released today by the Assn. of Bay Area Governments and the Bay Area Council, a local industry group.

The region’s growth and affluence come largely from the relentless boom in high-tech industries fueled by the highest concentration of top research-university programs in the nation, concludes the report, prepared by research firm McKinsey & Co.

With 26 Fortune 500 companies, the Bay Area was second only to New York in a survey of eight metropolitan areas. The local per-capita income reached $38,300 last year, the highest in the nation. And if the region were a separate country--an idea some residents have proposed only half-jokingly--its gross domestic product would rank 21st in the world.

“Everybody knows that the Bay Area is a high-wage and high-cost place, but it turns out that the reason wages are high is that productivity is high,” said Ted Gibson, chief economist of the California Department of Finance.

Productivity in the computer and electronics sector reached $200,000 of output per employee in the Bay Area last year, the report said. That compares with $178,000 of output in Austin, Texas, the next-highest region, and easily beats $115,000 in Los Angeles and $105,000 in New York. The Bay Area holds a similar productivity lead for the biotechnology, environmental technology and multimedia industries.

The downside of this growth and wealth creation is a high cost of living, housing shortages and traffic gridlock second only to Los Angeles. The problems have been particularly acute in Silicon Valley. Skyrocketing housing costs have led to urban sprawl as home buyers look farther and farther afield for homes they can afford.

“They’re going to choke on themselves if they don’t start to build houses there,” Gibson said. “The techies can afford the price of admission, but the municipal employees and Safeway clerks can’t.”

Efforts to build more housing have been hampered by “not in my backyard” resistance, despite the best efforts of local governments and planning groups that count victories in hundreds of housing units when the problems are in the tens of thousands, Gibson said. “There has to be a basic attitude change” to keep improving the region’s quality of life, he added.

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Charles Piller can be reached at charles.piller@latimes.com.