California Uber Alles: Golden State Now World’s Fifth Largest EconomyCC0US23:07 05.05.2018Get short URL101
California has become the world’s fifth largest economy, exceeding that of the UK, according to federal data released Friday.
According to public data, California’s gross domestic product (GDP) rose $127 billion between 2016-2017. The state’s economy grew 3.4 percent in 2017, according to the US Department of Commerce.
All of the state’s economic sectors, including its technology sector in Silicon Valley and its entertainment sector in Hollywood, have contributed to California’s sharply rising GDP.
“We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money,” said Sung Won Sohn, an economics professor at California State University Channel Islands, the New York Times reported.
“And that’s why, despite high taxes and cumbersome government regulations, more people are coming into the state to join the parade,” Sohn added.
While financial services and real estate grew $26 billion between 2016-2017, the state’s information sector experienced $20 billion in growth. Manufacturing was up $10 billion over the same time period.
California had the world’s fifth largest economy 2002, until the 2008 recession hit world markets. Since that time, however, the state has increased its GDP by $700 billion and added an estimated 2 million jobs.
The GDPs of China, Japan, Germany, following the total GDP of the US, are the only economies on Earth that currently surpass California’s GDP.
According to Lee Ohanian, an economics professor at University of California, the state’s economic growth is spurred by worker productivity.
Although the UK has 25 million more people than California, the Golden State surpassed the island nation’s economy between 2016-2017 for that reason.
However, California’s economic growth has mostly been observed in the coastal metro areas surrounding San Francisco, San Jose, Los Angeles and San Diego.
“The non-coastal areas of CA have not generated nearly as much economic growth as the coastal areas,” Ohanian said in an email to the New York Times.