[youtube http://www.youtube.com/watch?v=5TeI2t4FBbo?rel=0&hd=1&w=560&h=340] In Silicon Valley, a survey of local economists by the Mercury News says the local economy will improve somewhat next year, with jobs in tech and health care continuing to post gains. It's the public sector that will bleed. Pay will rise, especially in tech, where competition is heating up for certain types of talent. We looked on Dice this morning, and found about 4,000 jobs listed for the Valley. Among the skills most in-demand: development, communications, engineering, and implementation. Another Valley perspective: the competition for talent has become "a war." That's according to Todd McKinnon, the co-founder and chief executive of San Francisco software start-up Okta. He says he plans to spend 80 percent of the company's new capital on salaries, mostly for engineers. In his view, "I go home and watch the news and the talk about the economic condition of this country, and it's a totally different world when you're trying to recruit top people in tech. Basically, we have 0 unemployment." At least that's what he sees in the case of talented software engineers. McKinnon says that for every 50 resumes Okta sees, the company talks to 30 people and interviews 10 to hire one. A total of 39 percent of Fortune 500 and large multinationals expect headcount increases from 1 to 5 percent, an improvement from 21 percent in 2009. Technology, retail, and professional services firms made the strongest hiring forecasts. What might slow hiring? The broader economic outlook, demand levels for products and services, regulation, and health care costs. DiceTV Update: Silicon Valley Companies are Picky - But They're Looking for the Best Techs