California Economy

By | October 28, 2022

Share by Sectors of California ‘s Gross Domestic Product in 2008

California ‘s gross regional product was $3 trillion in 2018. In 2007, before the credit crisis, this was US$1812 billion. California was then responsible for 13% of the gross domestic product of the US. Had the state been an independent country, it would have been the seventh largest economy in the world (or the eleventh largest economy by purchasing power parity). The gross domestic product per capita that year was $38,956. The California economy relies heavily on trade, about a quarter of the economy consists of foreign trade. In 2008, the state exported USD 144 billion. The main export product (about 42% of total exports) is computers and electronics.

According to, the main foreign investors in the state are Japan, the United Kingdom, Switzerland, Germany and France. Foreign investment accounted for 4.2% of all employment in 2005.

Unemployment was just below 6% in 2007, but had risen to 12% in 2009 as a result of the credit crises. The distribution of wealth is skewed. Some of the wealthiest areas in the US are in the state, such as La Jolla near San Diego, Beverly Hills near Los Angeles, Newport Beach in Orange County, and San Francisco. The median home price in the state is about $500,000 but in these places is near $2 million. The state also has some very poor areas: some parts of the Central Valley are among the poorest areas in the US.

Viticulture at Paso Robles

Agriculture and Mining

Agriculture has become a major source of income since the wave of poor farmers from the mid-U.S. in the 1930s. In 2009, agriculture was directly responsible for 2% of gross domestic product. California is best known for fruit growing (especially citrus fruits) and viticulture, as well as vegetables and dairyare important products. Agriculture is concentrated in the Central Valley and the Los Angeles area in the south of the state. The latter area is dependent on water supply from the north for irrigation water. Since the second half of the 20th century, agriculture has made extensive use of illegal, and therefore cheap, labor from Mexico. Because the illegal workers enter California through the shallow border rivers, they are called wetbacks.

In the early 20th century, California fruit growing professionalized. The Californian fruit, which is exotic in the eastern US, was conveniently marketed as a brand by Sunkist, among others. Today, California is by far the largest exporter of fruit in the US.

California owns about 90% of all viticulture in the United States [18] and exports wine all over the world. Grape cultivation has been around for some time, but wine production only started on a large scale in the 1960s. Today, viticulture can be found along almost the entire length of the coastal mountain ranges, in the Central Valley and in the foothills of the Sierra Nevada. The major wine regions of the US are referred to as the American Viticultural Area (AVA) by the US government. Well-known AVAs in California are Napa Valley, Russian River Valley, Rutherford and Sonoma Valley. The largest wine region, however, is the vast Central Valley, where about 75% of all California grapes are grown.

Petroleum was discovered in several places in California in the last decade of the 19th century. Today, oil is drilled in the Central Valley near Bakersfield, in the Los Angeles Basin near Long Beach and Los Angeles, and off the coast between Santa Barbara and Los Angeles.


After World War II, the aviation industry grew strongly, such as Lockheed, Convair and later aerospace. The rise of television fueled the growth of the entertainment industry in Hollywood. A major factor in California’s economic growth were UCLA, Berkeley, and Stanford universities. These played a major role in the rise of ICT in the 1970s, after which the largest concentration of high-tech industry in the world emerged in the Mountain View area (south of San Francisco). This area was therefore nicknamed Silicon Valley. apple,Google, Hewlett-Packard, Xerox, Intel, Sun Microsystems, eBay, AMD, Meta, and McAfee are among the companies based there. Toyota started a joint venture car factory with General Motors in 1984 in Fremont, east of San Francisco.

Transport and Infrastructure

Interstate 80 at Berkeley

California has an extensive road network, which is maintained by the California Department of Transportation (Caltrans). Due to the car culture, the traffic jam problem in the major cities is large, despite public transport in those places.

The main highways (“freeways”) from north to south are Route 101, which crosses the Golden Gate Bridge among other things, and I-5 which runs from the Mexican border at San Diego past Los Angeles and through the Central Valley. An alternative to I-5 is State Route 99, which connects the cities in the east of the Central Valley. Along the coast is the much smaller State Route 1, known for its panoramas. The I-15 connects Los Angeles with Las Vegas (Nevada). I-40 and I-10. run from east to westconnecting Greater Los Angeles to Tucson and Phoenix in Arizona, I-8 connecting San Diego to Tucson, Route 50 from Sacramento to Lake Tahoe and Carson City (Nevada), and I-80 from San Francisco to Reno (Nevada). To the north, in addition to I-5 and Route 101, Route 97 and Route 199 also connect to Oregon.

California’s largest airports are Los Angeles International Airport and San Francisco International Airport, which mainly serve the Pacific and eastern United States. There are dozens of smaller airports in the state.

California has a number of important seaports, such as the contiguous ports of Los Angeles and Long Beach, which together make up the largest freight port in the United States, accounting for about a quarter of all container throughput in the country. The Port of Oakland, another major transhipment port, is the fourth largest port in the US.

The Disneyland amusement park near Anaheim, not far from Los Angeles, is a major tourist attraction

Public transport is generally better developed than in the rest of the US, although it is certainly not as extensive as in Europe. Interregional rail traffic (passenger services) is provided by Amtrak California, a partnership between Amtrak and Caltrans. Because not all cities have rail links, Amtrak California operates buses on some routes. Los Angeles and San Francisco have both a subway and light rail; San Jose, San Diego and Sacramento only have light rail. In the Bay Area, regional rail connections are provided by ACE, BART and Caltrain, in Greater Los Angeles by Metrolinkand in San Diego County by Sprinter and Coaster. Although most counties have some bus connections, the countryside is poorly served by public transport.

Plans for a high- speed train (California High-Speed ​​Rail) connecting San Diego, Los Angeles, Sacramento, Oakland and San Francisco are well advanced. The first trains will run around 2020.

California Economy