California Poised To Lead Again When Recovery Gathers Steam; Diversity of businesses, tech's long-term future outweigh higher costs.(A)

Byline: CHRISTINA WISE

At the height of the tech bubble, California seemed to mint new millionaires nearly every day.

From '97 to '99, 323 companies came public in the state, making new millionaires of the Internet whiz kids who changed how we all communicate and shoveling billions into the tech industry. That was especially true in the north.

But in the aftermath of the tech bust, Northern California looks a lot like Southern California did when defense spending retreated in the early '90s. The state as a whole shows the strains, with a higher jobless rate and a gaping budget deficit.

The question is what role California will play in the nation's recovery. Will it still be a powerhouse or will it continue to suffer from the post-tech hangover?

Early on, Southern California may lead, thanks to its diverse economy. But the north could take over when tech finally recovers.

At the end of March, the U.S. jobless rate stood at 5.8% while California's stood at 6.6%. In Santa Clara County, home to Silicon Valley, unemployment was 8.4%.