Homes are expensive, California unemployment runs higher than national levels, and an inland versus coastal economy splits California. Even so, business activity and venture capital are way up, many fields are projected to grow, and California is a center of design and innovation. Jeffrey Kravetz, regional investment director of The Private Client Reserve of U.S. Bank, gave an optimistic assessment about the economy at the Valley Industry and Commerce Association Business Forecast Conference Oct. 20.
CSUN, along with representatives of business, government and agencies, took part in the event. With a population of 39.2 million people, California has the largest economy of any state. Its gross domestic product (GDP) soared to $2.67 trillion in 2016. “California expansion is one of the longest on record,” Kravetz said.
And the explosion of tech and start-up companies attracts investment capital. “California leads the nation in venture capital. Venture capital is very healthy,” Kravetz said. About 53 percent of all venture capital went to California in 2016. It leads the nation with $31.3 billion invested. California ranks fourth nationally in tech innovation, with its Silicon Valley in Northern California and Southern California’s Silicon Beach.
But it’s not just tech that drives the California economy. Other fields are projected to grow, including education, health, construction, various trades, leisure and hospitality, and tourism. “Tourism is a huge component of the California economy,” he said. “265 million people visit California each year. The tourism economy is thriving.”
However, California still has two economies: a thriving tech and innovation coastal economy, and inland communities that suffer higher unemployment and poverty rates. “This growth in the economy masks problems at the state level,” Kravetz said. California has the highest poverty rate in the nation, and expensive housing and the high cost of living contribute to the situation.
But despite its challenges, California’s economy is expected to expand “as long as the national economy is doing well, and California continues to innovate,” he said.