Aerial image of California's Silicon Valley. Courtesy of Wikimedia Commons

A Silicon Valley organization that studies issues affecting economy and quality of life in the region has released a new report that rings alarm bells at full volume. The region is far from reemergence from the recession, with its innovation economy stalled and its "global competitive standing at risk as never before," according to the report's authors.

"Silicon Valley's innovation engine has driven the region's prosperity for 60 years, but at the moment we're stalled," said in a statement Russell Hancock, CEO of Joint Venture, the organization that publishes the annual report, titled Silicon Valley Index. "What's hard to say is whether we're stuck in neutral, which has happened before, or whether it's time now for a complete overhaul."

Joint Venture's board of directors includes a multitude of industry and government leaders that wield influence in the region, with representation from companies like Google, Bank of America and Webcor, as well as public organizations like Stanford University, California State Senate and Santa Clara Board of Supervisors.

Besides the worldwide economic slump, Silicon Valley's problems are exacerbated by rapid economic growth in other countries and the dire financial state of California, the state whose government is currently facing a $20 billion budget deficit.

Historically, Silicon Valley companies have relied heavily on workforce from foreign countries like China and India. As those two countries' economies are quickly growing, the report predicts that those sources of educated workers will curtail its generosity over the coming years.

Sacramento's budgetary gridlock and general political dysfunction "has direct and debilitating effects on the region's ability to prepare the workforce, provide crucial infrastructure, maintain quality of life, and keep pace in the talent race with other regions."

According to the report, 90,000 jobs were lost in Silicon Valley between the second quarter of 2008 and 2009. The "green" economy, is so often expected to be a solution to joblessness, has created 12,000 jobs in the region.

Venture capital - the way Silicon Valley entrepreneurs have traditionally secured capital for starting new companies or expansion of existing ones can no longer be counted on. The federal government is once again a key investor in innovation and research, but "Silicon Valley is not attracting significant shares of federal funding, and has not for some time."

Silicon Valley region encompasses Santa Clara and San Mateo Counties and portions of Alameda and Santa Cruz Counties.

The full report can be found on Joint Venture's Web site.