SAN JOSE — Silicon Valley’s economy remains red hot as the region adds innovation jobs faster than rival areas, but a host of challenges could imperil that growth and edge, according to a report released Thursday.

Santa Clara County last year led the nation with the fastest increase for jobs in internet, information services, software, product and component manufacturing, and specialized information services.

Silicon Valley’s innovation economy grew faster in 2016 than in 2015, and it outpaced all rival tech hubs. Last year, job growth in innovation industries was 8 percent in Santa Clara County; 7 percent in Austin, Texas; 4 percent in New York City; 3 percent in Boston; and 2 percent both in Seattle and Southern California, according to the report, by San Jose-based Silicon Valley Leadership Group and Mountain View-based Silicon Valley Community Foundation.

Yet soaring housing prices, brutal traffic snarls and troubling education results are among the flaws that threaten to undermine the economy in Silicon Valley, the report stated.

“Silicon Valley remains the Earth’s epicenter of innovation,” said Carl Guardino, president and CEO of Silicon Valley Leadership Group. “While we celebrate our strengths, we must also work on our weaknesses.”

Plenty is at stake, not the least of which is the health of one of the nation’s most robust job markets.

Silicon Valley has about 479,300 total innovation jobs, which puts it at No. 3 — behind the No. 1 region, the vast Southern California area, which has roughly 553,900 innovation jobs, and the No. 2 area, the New York metro region, which has 511,600 innovation jobs, the report found. Boston was No. 4 with 302,900, Seattle was No. 5 with 261,600, while Austin was No. 6 with 101,700 innovation positions.

A scorecard for Silicon Valley that measured 22 key indicators raised warning flags. In this year’s report, eight indicators were improving, 10 were showing decline, and four had no change. Last year’s report found seven measures improving, five were in decline, and 10 indicated no change.

“It’s getting tougher to live here,” said Emmett Carson, president of the Silicon Valley Community Foundation. “As it gets tougher, people may look for other opportunities in other areas. The cost of housing, ways to cut commute times down, these are some competitive issues we have to address. If we don’t repair this, it will become our Achilles heel.”

Traffic is clearly a major problem, one that casts Silicon Valley in a poor light compared with its rivals, the report determined.

The average Silicon Valley worker spends an hour and 10 minutes commuting, round trip, second only to New York City workers, who spend an hour and 14 minutes commuting per day, according to the study. Since 2010, commute times have lengthened by 15 percent in Silicon Valley, compared with increases of 5 percent to 11 percent for the competing regions.

Housing is another big problem that challenges the region, the report stated. While the number of housing units increased 2.6 percent, the population expanded about 6 percent. That means new housing supply continues to trail both jobs and population growth, a divergence that portends even higher home prices.

“Silicon Valley earns the distinction of being the least affordable place to live of any of the innovation regions in the report,” said Erica Wood, chief community impact officer with the community foundation.

The report’s authors also are concerned about figures that show 53 percent of Silicon Valley’s 11th-grade students failed to meet state standards in mathematics and 33 percent failed to meet standards for English.

The South Bay region is gaining about 2,000 residents per month, according to the report, relying on figures prepared by Burlingame-based Collaborative Economics. But that net gain was driven primarily by a net inflow of 2,800 people who arrive each month from other countries. At the same time, a net of 800 people are leaving Silicon Valley for parts of the United States outside of the Bay Area.

“While Silicon Valley’s innovation industries and foreign talent base remain strong by any measure, the region’s ability to sustain its post-recession growth may be eroding,” the report stated.