Its glass half-full again, the region retools for another revolution. Will it be boom and bust redux?

Russell Hancock has a job few people would have coveted over the past few years. As president and chief executive officer of Joint Venture: Silicon Valley Network, Hancock has been trying to figure out how the busted area might reinvent itself - no mean feat when the entire region seemed lost in a pessimistic cloud, its leading industries left for dead. You might think he pined for the boom days. Nope. "That period was a time warp. It meant nothing; it had nothing to do with reality," he says. "We're resuming life now as normal."

That's true, but only to a point. A lot has changed in the years since the boom began. Already, in the jobs being created, one can see the outlines of a Silicon Valley reinvented­ on the rebound. New jobs aren't coming from old standby industries like silicon chips and software design, but from areas like biotechnology, life sciences, healthcare, and nanotechnology. The valley has advantages in these areas - intellectual capital at area companies and universities, and a burgeoning R&D community, for instance -which are among the fastest growing in the U.S. economy. "These are clusters where we have assets," Hancock says. "Particularly when you're talking about things coming out of the national research labs and high-end university research labs. We're encouraged."

It's no surprise to old-timers that Silicon Valley's death has been greatly exaggerated. People have declared the Valley dead before, only to see it retool and accelerate again. The question is, what will drive the rebound this time? Who will benefit? Will it lead to another boom - and eventual bust? From the busy streets of San Francisco to placid Palo Alto to the land across the Bay, we probed some of the sharpest minds in technology. Despite continued unease, not to mention impatience for the next "revolution," we found a Silicon Valley convinced good times are near.

We hardly need to recap what the tech bust wrought: thousands of jobs lost, VC funding­ reduced to a trickle, tiny office buildings left vacant. Worst, though, was an indicator untracked by economists - the "glass is half-empty" attitude. Silicon Valley's collective, seemingly intractable optimism was replaced by a region-wide funk.

"The Valley has gone through what I call a state of depression," says Gary Hooper, a former biotech CEO and 30-year veteran of the technology industry.

"For a while, there was a lot of skepticism about how anybody could possibly make money with technology ideas," adds Rob Lerner, the former CEO of Vapore, a company that invented and manufactures an M&M-size ceramic pump that can be used in everything from camping stoves to, potentially, drug-delivery systems.

Slowly, cautiously, the region is shaking off this unnatural pessimism and regaining its courage. The business community sees lots of reasons for hope. Most important, companies once again are buying what the Valley sells. "One of the main reasons we saw this huge downturn was that major companies stopped buying [IT equipment]," says Raffi Amit, the Robert B. Georgen Professor of Entrepreneurship at the Wharton School of the University of Pennsylvania. "Now we see those sales are rising."

Venture-capital funding, both for start-ups and for more mature companies, has also made a comeback. When Lerner needed additional funding for Vapore last summer, he was received well. "The level of interest is quite high," he says. "The general sense is that the purse strings are loosening and the appetite for developing tech companies is ramping up."