From the Gold Rush days to the explosive growth of the Internet at the beginning of the 21st century, California's economic history has been one of constant change, growth and prosperity. Starting as a sparsely populated Western frontier with fewer than 100,000 residents in 1850, California's population now exceeds 34 million. From an economy that was too small to measure before the Gold Rush, California is now the eighth ranking economy in the world, about the size of Mainland China, and larger than Brazil, Canada or Spain. California's gross product exceeded the trillion-dollar mark in 1997, the first state to achieve this record. Last year, it was the first state to top $1 trillion in personal income. 

Beyond size, California is also a world technological and economic leader. California is an example of what the future has in store for the rest of the nation. It has been the birthplace of many of the world's most significant technological innovations, social trends, and is a model of economic innovation and prosperity. As this new century begins, there are few economies better suited to this new "information age" than California's. 

California possesses a vibrant and diverse industrial tapestry. Historically, the state's remoteness from the industrial states of the East and Midwest caused it, from the beginning, to develop a fairly complex economy, rather than one devoted to a few specialized industries. Over time, new industries were introduced that, rather than displacing established industries, were simply added to the existing base, which heightened its complexity. This pattern of adding rather than displacing industries gives California its rich economic texture in which long-established industries, such as agriculture and mineral extraction, thrive alongside emerging industries, such as biotechnology, telecommunications and the Internet. Thus, from its frontier beginnings, California has become the largest and most diverse economy in the nation.

Click on each era for a short description of the important economic developments of each period


The Gold Rush Plants the Seed 1848-1899


20th Century Industries               1900-1929



Adversity Begets Prosperity        1929-1945


A Modern Economy is Born        1946-1975


Leading the Way                        1976-1999



The 150 years since statehood witnessed unimagined changes in the California economy.  The population explosion of the Gold Rush left behind prosperous farms, merchants, and railroads.  The transcontinental railroad linked California with the rest of the U.S.   The ability to ship goods east, coupled with California’s moderate climate, prompted new industries looking for a favorable environment—motion pictures and aircraft manufacturing in particular—to move to the Golden State.  The dislocations of the Dust Bowl and the Great Depression drove another wave of migration.  The demand for ships and planes and other military hardware spurred by World War II led the state to become a manufacturing powerhouse.  Postwar prosperity, the continuing military demands of the Cold War, the popularity of the “California lifestyle”—spread in large measure by Hollywood—and the state’s proximity to the Pacific Rim combined to spark further businesses and household growth.   

California’s strong entrepreneurial sprit, world class port, transportation and higher education systems, coupled with an existing high technology base—developed in part from defense-related industries—have all contributed to the state’s enviable position as the world leader of the New Economy. 

This Report attempts to highlight in just a few pages the lengthy and complex economic history of America’s largest state.  Inevitably, important events, people, industries or enterprises were left out or overlooked.  This is not to denigrate in any way the contribution of tens of millions of Californians to this remarkable story.

Return to Beginning The Gold Rush Plants the Seed 1848-1860  20th Century Industries    1900-1929 Adversity Beget Prosperity 1925-1945 A Modern Economy is Born    1946-1975       Leading the Way   1976-1999