California Business Minute™

BACKGROUND

Located on the Pacific coast of the U.S., California stretches some 900 miles from Mexico to its
south, then north to the state of Oregon. It has had a rich history, first discovered by the Spanish
explorer, Juan Cabrillo who landed at what is now known as the city of San Diego.  The state was
influenced by the settlements by catholic missionaries specifically father Juniper Serra who dotted
the state with missions. In the 1800's with the discovery of gold in the northern part of the state the
population would explode which would lead to the growth of San Francisco and Sacramento. It
would be followed by expansive growth in agriculture and food processing because of the mild
climate, great soils and water resources in the three key agricultural valleys; San Joaquin,
Salinas and Sacramento. California would continue to grow and diversify. The film industry would
find California in the early 1900's and the City of Hollywood became synonymous with the film
 industry and would become a significant economic segment of the state.  And communities such
as Burbank and Glendale would become homes to television studios.  In concert with this, growth
in aerospace specifically in southern California, it would see significant growth prior to WWII but would
play a significant role after the war and specifically with the nation's space race in the 1960's.
California would continue to diversify with what would become known as the center of the world for
the high tech industry with the development of the Silicon Valley in 1960's-70.  And a decade later,
the state would begin to see the growth of the biotech industry and its growth in San Francisco,
San Diego and Los Angeles.  Today, the state's economy is progressing in areas of life sciences,
nanotechnology, renewable energy and autonomous technology (robotics).

ON THE WORLD STAGE
Again, if California were viewed as its own nation, it would be the eighth largest economy in the
world.  The US Department of Commerce estimates that California’s Gross State Product was
slightly larger than 1.6 trillion dollars in 2005, the latest year recorded.  A gross state product
identifies the values of the goods and services produced in the state which is similar to our
countries gross or other countries gross domestic product. While California had been previously
ranked fifth of sixth in the world, its economy has suffered from a variety of political bungling from
deregulation of electrical transmission, causing energy shortages for business and industry,
coupled with spiraling health care costs and worker’s compensation rates. These actions
combined with the recent strength of the economies of France and Italy in tandem with the
growth of China’s economy placed California in the eighth position.  Nonetheless, as many analysts
point out, as California goes so does the US economy, and it stands to reason as this data
illustrates that while it may have dropped a few positions, California is still an international
economic powerhouse and its economy can change on a dime.

California Ranks among the World's Top Ten Economies
 
-The gross state product is over $1.8 trillion, making it one of the world’s largest economies
-California accounts for over 13 percent of the nation’s output
-Our nation’s next largest state economy—Texas—is about 60 percent the size of California’s

Historically, California’s has been influenced by major corporations such as the Southern Pacific
Railroad, Standard Oil of California and Bank of America.  Today the economy is very diverse and
internationally focused.

The following provides some of the most recent available data on the major economic segments
of California.  Place cursor over link then click to view information on each segment. 

DEFENSE/MILITARY

California has always played a central role in America’s defense. The state provides
unique, mission-critical capabilities for the military that need to be preserved and
indeed strengthened if America is to maintain its position of leadership in a rapidly
changing world. California’s defense infrastructure provides the essential ingredients
necessary to transform and strengthen national military power for the new century.
There are more than 30 major defense installations in California, incorporating all
military services, more than double any other state. Each of these bases has unique,
important military value, and each is making critical contributions to national security,
today and for the future. California is the strategic gateway to Asia and the Pacific, the
increasingly important area of growing economic and military might in the 21st century.
California provides superior technology, joint training and operations, and the keys to
effective and efficient force projection in the future. California is therefore uniquely suited
to provide the human and physical infrastructure needed to meet the probable threats of
the coming decades and ensure America’s pre-eminent role in world security. Combined,
California’s bases form an unmatched defense complex that includes:

Irreplaceable Training Assets
California possesses a unique combination of irreplaceable assets: weather, climate,
terrain, available space on land and sea and in the air, and the people, buildings, and
equipment to use those assets full time. California’s unique value lies in the interconnectedness
and close proximity of its large unencroached military desert lands and nearby mountainous
terrain, the largest restricted airspace in the continental United States, and extensive
deepwater operating areas off its coast.

The economic value of national security in California is substantial, though perhaps not as
well known as it should be. Defense is California’s second largest industry, surpassing even
agriculture. According to the most recent data, annual defense spending on payrolls and
contracts reach approximately $39 billion in  the state, with an additional $3.5 billion in retired
military pay. A total of about 279,000 people, including active-duty military, civilians, Reservists
and National Guard, were employed by DoD in the state, working at some 30 major and dozens
of minor installations.

•  The state has the largest DoD presence with 36 major installations and more than 25 minor
    installations
•  DoD spending accounts for roughly $42 billion of the state’s economy – a greater figure than
   agriculture
•  The exceptional weather in California makes it one of the few places in the nation where military
   aircraft train   
    year-round
•  California has the first (and only) FAA-licensed civilian space port, at the Mojave Airport in 
   Kern County helping to promote military technology transfer opportunities

-Exports of goods made in California totaled $117 billion in 2005. Based on partial-
 year data, it appears  that exports will  increase by another 10 percent in 2006
-The largest category of exports is computers/ electronics
-Asia accounts for most California sales abroad, followed by Europe, Mexico, and
Canada

Source:  Sate of California, Legislative Analysts Office

THE CALIFORNIA DREAM CONTINUES…

While some take enjoyment in belittling the state, specifically its politics along with
its regulatory and tax issues, the opportunity to diminish this world power house only
adds to the fervor of its stalwart’s in both the public and private sectors to make it better
and they have.  California is an icon unto itself.  It represents the inventor, entrepreneur
and the free spirits.  It represents the dedication of generations that built more than a
state, but a world renowned business culture that constantly is changing becoming more
sophisticated through the embracement of new technologies, their applications and
deployment while growing the economy larger than any other. California is about
leadership.  It is a state that has been and continues to be ahead of others in public
policy development, such as with transportation, in the historic participation in the
building of the Continental railroad or more recently with issues of  taxation, such as
the infamous Proposition 13, the property tax limitation act, or on the environment
with the formulation of the most comprehensive environmental impact reporting process,
the California Environmental Quality Act or the most sophisticated natural resource
distribution system for water resources in the nation, with its aqueducts, canals and
reservoirs that make up the California project. Californians understand and appreciate
change. This could be because of its agricultural history and having  to make change
with every growing season. Or maybe its’ because of the ever changing innovative and
emerging technologies that are produced here that it has just become second nature to
its residents.  But what ever it is, California continues to change.  It is exactly the reason
behind this website.

The purpose of the California Business Minute’s is to provide the most current and up to
date changes on  the business climate and economy of the state. But somewhere between
enjoying the assets of this state from attending the games of the 5 Major League Baseball
teams, 4 National Basketball Association teams, 3 National Football League teams and 3
National Hockey League teams along with the surfing, skiing, sky diving, wine tasting while
living in and around some of the most beautiful geographical areas in the world from
Big Sur, Lake Tahoe, Yosemite to the Redwoods, Sierra’s, Cascade’s to the beaches or the
deserts, it will be the commitment even with all of these distractions to provide you with the
best and most current information  that illustrates the brilliance of the 'Golden State'.