The 7 Biggest Industries in California

Did you know that if California was a country, it would have the fifth-largest economy in the world? With a GDP of approximately $3.09 trillion, the Golden State configures between Germany and the United Kingdom. Thanks to Hollywood, Silicon Valley, manufacturing, and agricultural industries, California is one of the major economic engines of the United States. There are over four million small local businesses here that employ nearly 50 percent of the state’s workforce. While many contributing factors fuel the economy, California’s biggest industries are a tighter list—here’s a roundup for you.

These are the Largest Industries in California 

1. Agriculture 

According to 2015 statistics, California’s agriculture industry contributed $47.1 billion—yes, billion with a “b”—to the entire state’s economy. To put this into perspective, this amount was the largest for any state, making up 12.5 percent of the total agricultural production for all 50 states, surpassing Iowa and Texas by a long shot. 

Excluded from this total is the impact the industry has on other sectors, including shipping and warehousing—altogether, the trio makes up California’s biggest industries. And in case you didn’t know this about the Golden State’s Central Valley, the region yields more crops and farm-based goods than any other U.S. state. This agricultural hub is where the magic happens—asparagus, grapes, lettuce, orange, rice, shelled almonds, tomatoes, and milk being the main produce.

2. Film and Television

If you’ve ever wondered why the movie industry was established in sunny California, we’re here to answer your question. And no, there’s more than one reason behind it. Sure—over 300 days of sunshine make for stunning filming locations—but there are a few more things at play behind one of the largest industries in California. 

Movies were becoming gradually more popular in the 1900s, and an increase in production was needed in order to meet the demand. This mostly had to do with the weather, but California also had non-union labor at the time. This made film production significantly cheaper than on the East Coast. Pair this with the fact that practically any SoCal location could stand in for a movie set, and you’ve got yourself an up-and-coming industry.

Nowadays, far beyond the glitz and glamour, California’s film and television industry is a vital part of the state’s economy. La La Land creates content that beams all over the world, in turn employing hundreds of thousands of people up and down the state. The industry also impacts many other sectors, most notably film tourism. If you’re a movie buff thinking of visiting your favorite filming locations, no place is better than the Golden State. 

3. Travel and Tourism

It should come as no surprise that travel and tourism are California’s most vital engines for economic growth. Fueled by transportation advances and defined by big, ambitious ideas, California has been a powerful leader in this industry, drawing visitors not just from other states, but also from around the world.

Travelers spend hundreds of millions of dollars while vacationing here, bringing in $114.9 billion into the state’s economy according to 2019 statistics. This sort of spending generated $12.2 billion in local and state tax revenue and provided 1.2 million California residents with employment. 

There’s so much tourist gold in California that it’s nearly impossible to list it all. But according to a TV commercial titled Living the Dream, the most popular hotspots include Hollywood, Beverly Hills, Disneyland, Napa Valley, Pebble Beach, Lake Tahoe, San Francisco, Yosemite, Venice Beach, and more. The next time you’re traveling, make sure to add these destinations to your itinerary.

4. Tech

Silicon Valley—an almost three trillion dollar neighborhood—is home to 2,000 tech companies, and hands down one of the best regions to live in if you want to work in tech. But, it wasn’t always that way.

In the 1940s, when computers were still the size of rooms, a man named William Shockley co-invented the transistor at Bell Labs—this later became known as the computer processor. Later in 1956, Shockley left Bell and founded his own company which made transistors out of silicon and not germanium, quite innovative for the time. A curious journalist named Don Hoefler wrote a three-part report about the semiconductor industry in 1971, titled Silicon Valley USA. As we know now, the name stuck.

With growing popularity, tech became more and more synonymous with the Silicon Valley industry, as companies like Atari, Apple, Oracle, eBay, Yahoo, Paypal, and Google were founded in the area. Better yet, most—if not all of these companies—are leaders in their respective industries. Software, social media, robotics, fiber optics, and medical instruments companies create jobs and generate more tax revenue. 

5. Service 

When it comes to the service sector, the Golden State is nothing short of impressive. Consisting of professional, business, education, and health services, as well as financial activities and leisure, this industry makes California a great place to live and work. It hosts the largest banks in the U.S.—expect to find Wells Fargo, Charles Schwab Corporation, Silicon Valley Bank, and CIT Bank here. Colleges, universities, and other educational institutions also fall under this sector.

The University of California contributes a GDP of about $120 billion annually to the economy. With 1.7 million living alumni, the public land-grant research university system has produced 61 Nobel laureates. Simultaneously, California State University produces $17 billion a year in economic activity.

Fastest Growing Industries in California

6. Healthcare 

Ask any California resident to identify the largest single component in their thriving economy, and chances are they will reply with high-tech, motion pictures, or agriculture—rarely will they mention the healthcare industry. However, over the last half of the century, the Golden State’s medical care industry has become by far one of the state’s largest growing economic activities.

As one of the biggest growing industries in Los Angeles and the state, healthcare surpasses all other employment rates. How big is it? Federal, state, and local governments, employers, and individual California residents are spending well over $400 billion a year on medical care, averaging at about $10,000 for every resident.

7. Construction

Construction is among the fastest-growing industries in the Golden State, employing five percent of the state’s private workforce. In the summer of 2019, seasonally adjusted construction employment topped 900,000 for the first time in 12 years. Despite the slower growth rate in construction employment, California contractors still outshine their counterparts thanks to the neverending projects which lay ahead.

One such construction project is the award ceremony for the 2028 Olympics, which will be hosted in the City of Angels. This is already starting to spring forth numerous building ideas, including new sports venues and hotels.