15.4: Calfornia’s Economic Sectors

Economics geography is based off three interconnected sectors: the primary, secondary, and tertiary. Each plays a distinct role in the production and consumption of progress and prosperity. First, let's delve into their unique contributions, understanding how their intricate interplay shapes the world around us- so we can learn how these sectors relate with five large areas of California’s overall economy (agriculture, Film & Television, Travel & Tourism, Tech, and Imports/Exports).

Figure 15.2: Map of California Counties by GDP (Gross Domestic Product). California counties by GDP 2021 is licensed under CC BY-SA 4.0

The primary sector provides the raw materials, the secondary sector crafts them into tangible goods, and the tertiary sector delivers the services that keep everything running smoothly. A farmer's crops nourish a truck driver who delivers manufactured goods to a restaurant where a chef uses them to prepare a meal served by a waiter. Each action ripples through the interconnected system, creating a symphony of economic activity.

However, the balance between these sectors is not static. Developed economies tend to shift towards a larger tertiary sector, focusing on services and knowledge-based industries. Meanwhile, developing economies often rely more heavily on the primary and secondary sectors for their economic engine. Understanding this dynamic interplay is crucial for navigating the complexities of our globalized world.

Lastly, we find that the GDP (Gross Domestic Product) is not equitable across all counties of the state. GDP or Gross domestic product is a monetary measure of the market value of all the final goods and services produced in a specific time. The following map identifies that seven counties that gross less than $1 Billion, and to put into perspective, Alpine counties GDP is less than $115,000 (2020), while Santa Clara, which is less than half the size of Modoc county has a $382 Billion GDP (2022).

Agriculture

Compared to other states, California has a large agriculture industry (including fruit, vegetables, dairy, and wine production), The total economic contribution is likely more than double this value. Airborne exports of perishable fruits and vegetables amounted to approximately $579 million in 2007. By way of comparison, California exported more agricultural products by air that year than 23 other states did by all modes of transport. Its agriculture is dependent on illegal immigrants.

According to the California Department of Food and Agriculture, "California agriculture is a $55 billion dollar industry”. Milk is California's number one farm commodity. The state's almond industry produces the most export value of any farm product, with $10.4 billion in sales in 2023. California leads the United States in strawberry production; due to its optimal climate and productive soil, the state is the source of over 80% of the nation's strawberry harvest.

For more information on California’s agriculture- see Unit 6- California’s Agriculture.

Film & Television

The silent film era blossomed in California, fueled by innovative filmmakers like D.W. Griffith and Cecil B. DeMille. Studios like Paramount Pictures and Metro-Goldwyn-Mayer sprung up, creating iconic stars like Douglas Fairbanks and Mary Pickford who captivated audiences worldwide. California's landscapes became backdrops for Westerns, historical epics, and romantic comedies, solidifying its connection with escapism and the American dream.

The advent of sound in the late 1920s presented both challenges and opportunities. Many silent stars struggled to adapt, but California remained a hub for innovation. Walt Disney pioneered animation in Burbank, while studios like RKO Pictures embraced new technologies like Technicolor, further cementing California's lead in the evolving entertainment industry. The Golden Age of Hollywood, roughly from the 1930s to the 1950s, cemented California's global cultural influence. Studios like Warner Bros. and 20th Century Fox churned out musicals, comedies, and genre films that entertained and inspired millions. Stars like Humphrey Bogart, Marilyn Monroe, and John Wayne became household names, embodying American archetypes and shaping cultural trends.

Out of the Collection: William S. Harte

Did you know that one of the highest-paid male actors of the Silent Era of film was a Cowboy? Either scan the QR code or visit this link to learn more about Santa Clarita’s Cowboy, and some of his famous friends! (Video length: 3min).

This era also saw the rise of television, with California at the forefront. Networks like CBS and NBC established their headquarters in Los Angeles, producing iconic shows like "I Love Lucy" and "The Mickey Mouse Club" that defined the medium for generations. California's beaches, mountains, and sprawling metropolises became backdrops for countless sitcoms and dramas, further blurring the lines between reality and the silver screen.

Figure 15.3: Publicity Photo of Lucille Ball & Desi Arnaz in I Love Lucy, California in 1956. Image by CBS Television is in the public domain.

The late 20^th and early 21^st centuries brought challenges to California's media dominance. Rising production costs, competition from international studios, and the fragmentation of the audience spurred consolidation and diversification. Smaller independent studios emerged, cable television thrived, and new giants like HBO and MTV rose to prominence.

The digital revolution brought even more profound changes. The rise of streaming services like Netflix and Amazon Prime Video challenged the traditional studio model, while social media platforms and user-generated content democratized storytelling. California, however, remained at the heart of this digital transformation, with Silicon Valley giants like Apple and Google playing key roles in shaping the future of media consumption.

Tourism - The County Fair

The seed of California's fair tradition was sown in 1850, a mere year after statehood. A vibrant editorial in the Daily Alta California envisioned an "exhibition that would astonish the world" – a celebration of California's burgeoning agriculture, industry, and natural wonders. Thus, the California State Fair was born, initially bouncing between Sacramento and San Francisco until finding its permanent home in Cal Expo in 1917.

For over a century, the California State Fair served as a grand stage for the state's progress. Farmers proudly displayed their prize crops, inventors unveiled their technological marvels, and artisans showcased their skills. The iconic Midway boomed with laughter and the scent of cotton candy, while livestock barns echoed with the mooing of prize-winning cows and the clucking of champion chickens. It was a microcosm of California's burgeoning identity, a melting pot of cultures and ambitions brought together in a festive atmosphere.

But as California's population boomed and cities sprawled, the centralized State Fair struggled to meet the needs of an increasingly diverse and geographically dispersed populace. This is where the story of county fairs takes a fascinating turn.

Fueled by local pride and a desire for smaller, more community-oriented celebrations, the first official California county fair, the Sonoma-Marin Fair, blossomed in 1906. Others quickly followed suit, sprouting like vibrant wildflowers across the state. By the 1930s, the network of county fairs had established its own identity, distinct from the grand spectacle of the State Fair.

These local fairs catered to the unique agricultural and cultural strengths of their respective regions. The El Dorado County Fair, steeped in mining history, celebrated lumberjacks and gold panners. The San Diego County Fair, with its proximity to the ocean, highlighted marine life and aquaculture. Each fair reflected the character and aspirations of its local community, fostering a sense of belonging and celebrating their unique stories.

Figure 15.4: Goats at the Ventura County Fair. Image by Jeremy Patrich is used under a CC BY 4.0 license.

As California continues to evolve, its county fairs adapt and innovate. There are 78 county fairs in California, which employ over 4,500 peoples and earn nearly $300,000,000 annually (almost half of this revenue alone is from the Los Angeles County Fair). Many have embraced green initiatives, showcasing sustainable agricultural practices and eco-friendly technologies. Others integrate educational exhibits and STEM programs, fostering a love for learning in young minds.

Tech

In the late 19^th century, California's Stanford University emerged as a fertile ground for scientific exploration. Lee de Forest's invention of the audion in 1906, a precursor to the modern triode, planted the first seeds of what would become a technological revolution. World War II further accelerated innovation, with California companies playing key roles in radar and other wartime technologies. By the 1950s, the transistor, invented at Bell Labs, arrived in Silicon Valley, sparking a gold rush of sorts for semiconductors. Companies like Fairchild Semiconductor, founded in 1957, laid the groundwork for a burgeoning electronics industry.

However, hardware alone wasn't enough. In the 1960s, venture capital firms like Kleiner Perkins, fueled by post-war prosperity, began taking risks on fledgling tech companies. This symbiotic relationship between investors and innovators proved crucial, allowing companies like Hewlett-Packard, founded in a Palo Alto garage in 1939, to scale and flourish.

The 1970s ushered in the personal computer revolution. Silicon Valley was at the forefront, with companies like Apple and Atari creating iconic machines like the Apple II and the Atari 2600. These early computers, while primitive by today's standards, sparked a cultural shift, democratizing access to information and paving the way for the digital age.

Figure 15.5: The Apple I, The First Apple Product- 1976. Image by Apple is licensed under CC BY 4.0

At the heart of this revolution was Apple, founded in 1976 by Steve Jobs and Steve Wozniak. California's culture of collaboration and risk-taking proved fertile ground for their audacious vision of an accessible, user-friendly computer. Apple's focus on design, usability, and user experience, unlike the clunky, technical machines of the time, resonated deeply with consumers, propelling them to the forefront of the personal computer era.

Meanwhile, Silicon Valley's entrepreneurial spirit thrived, with companies like Intel and Cisco becoming household names. The region saw a constant churn of ideas, failures, and breakthroughs, fueled by a relentless pursuit of technological advancement.

The 1990s witnessed the rise of the internet, another revolution birthed in Silicon Valley. Netscape, co-founded by Marc Andreessen in 1994, created the first widely used web browser, opening the door to a vast, interconnected world of information. Soon, companies like Google, Ask Jeeves, and Yahoo! emerged, transforming how we accessed and processed information.

California's sunny disposition wasn't just metaphorical. Its mild climate and natural beauty attracted a diverse pool of talent, from engineers and programmers to artists and designers, creating a vibrant ecosystem of cross-pollination and innovation. This melting pot of minds fostered companies like Facebook and YouTube, pushing the boundaries of social media and online content creation.

The 21^st century saw a shift toward cloud computing and mobile devices. Silicon Valley giants like Apple, with its groundbreaking iPhone, and Google, with its ubiquitous Android platform, redefined how we communicate, consume content, and navigate the world. The rise of venture capitalism on Sand Hill Road continued to fuel ambitious startups, from Uber disrupting transportation to SpaceX aiming for the stars.

Mining

California’s hidden wealth extends far beyond oil and gas. The Gold Rush of 1848-1855, the Silver Rush in the Calico Mountains in 1881, and others may seem like ages ago, but today, California’s still are on the hunt, and continuing to mine in ‘them thar hills.’ In fact, there are over 5,000 mining claims on public lands in California today. The California Geological Survey geologists map, analyze, and share crucial information about the Golden State's diverse mineral bounty, categorized into three main groups:

· Metals: Unearth the allure of gold, silver, iron, and copper, the backbone of various industries.

· Industrial Minerals: From the everyday marvels of clays and limestone to the high-tech wonders of rare-earth elements and boron compounds, discover the building blocks of everything from construction materials to cutting-edge electronics.

· Construction Aggregate: Build a solid foundation with sand, gravel, and crushed stone, the essential resources shaping California's infrastructure and landscapes.

Case Study - Boron

A large borax deposit was discovered in 1925 along a border of Kern and San Bernardino Counties, along State Route 58, and the mining town of Boron was established soon thereafter. This borax deposit is now the world's largest borax mine. It is owned by Rio Tinto Minerals (formerly U.S. Borax). It is operated as an open-pit mine, the largest open-pit mine in California.

Figure 15.6: The Rio Tinto Boron Mine, In Boron, California in 2012. Image by Marcin Wichary is licensed under CC BY-SA 2.0

This mine supplies nearly half of the world's supply of refined borates. Rio Tinto Minerals is Boron's primary employer, employing over 800 people. Today, borate minerals are used to make soaps, cellphone glass, fertilizers and even used to coat the ceramic tiles on the underside of space shuttles.

Case Study - Cerro Gordo

Cerro Gordo Mines, located in California's Inyo Mountains, were once a bustling hub for mining silver, lead, and zinc. Active from 1866 to 1957, these abandoned mines also produced smaller amounts of gold and copper. While some smelting happened on-site, larger smelters were built by Owens Lake to handle the workload. These smelting operations gave rise to the towns of Swansea and Keeler. Transporting the refined metals, mostly to Los Angeles, proved challenging, limiting the mines' overall success. The Cerro Gordo boom for silver and lead peaked in the 1880s, followed by another boom for zinc in the 1910s.

Here's a breakdown of what miners processed between 1789 and 1880:

• Ore: 4,223 short tons (roughly equivalent to 3,831 metric tons)
• Gold: $3,307 worth (roughly equivalent to $88,088 in today's dollars)
• Silver: $140,517 worth (roughly equivalent to $3,742,932 in today's dollars)

Between 1865 and 1949, the mine also produced a massive amount of resources:

• Lead: Over 35,000 short tons (roughly equivalent to 32,000 metric tons)
• Silver: 4,400,000 troy ounces (roughly equivalent to 140,000 kilograms)
• Zinc: 11,800 short tons (roughly equivalent to 10,700 metric tons)

Figure 15.7: Overlook at the Mine Train & Cerro Gordo. Image by Jeremy Patrich is used under a CC BY 4.0 license.

Imports & Exports

The importing and exporting of materials is key for economic growth, and the best way to trade globally is to have a port. California has two primary ports for trade, the Port of Los Angeles and the Port of San Francisco. In 2022, the top three import origins of California were China ($148 Billion), Mexico ($60.5 Billion) and South Korea ($31.2 Billion). Also in 2022, the top three imports of California were petroleum oils ($28.9 Billion), medium sized cars ($20.2 Billion and portable computers ($18.2 Billion).

Exports in California reached $186 Billion, making it the largest exporter out of the 53 exports within the United States. The top three exports were aircraft parts (6.03 Billion), machines and apparatus ($5.47 Billion) and machine parts ($4.51 Billion).

Port of Los Angeles

The Port of Los Angeles was first documented by Portuguese explorer Juan Rodriguez Cabrillo, in 1542. Officerly founded in December of 1907, the use of this port has been constant- serving our communities, war effort and more. In fact, during WWII, the US military hired 90,000 workers to produce military vessels. Today, the Port of Los Angeles is a seaport managed by the Los Angeles Harbor Department, a unit of the City of Los Angeles. It occupies 7,500 acres (3,000 ha) of land and water with 43 miles (69 km) of waterfront and adjoins the separate Port of Long Beach. Promoted as "America's Port", the port is in San Pedro Bay in the San Pedro and Wilmington neighborhoods of Los Angeles, approximately 20 miles (32 km) south of downtown.

Figure 15.8: Container Ship at The Port of Los Angeles, Circa 2021. Image by Downtowngal is licensed under CC BY-SA 4.0

The cargo coming into the port represents approximately 20% of all cargo coming into the United States. The port has 25 cargo terminals, 82 container cranes, 8 container terminals, and 113 miles (182 km) of on-dock rail.

In 2023, The port's top imports were furniture, automobile parts, apparel, and footwear. The top exports at this port were fabrics, animal feed, recycled materials, and paper.

Port of San Francisco

The Port of San Francisco was first documented by a Spanish supply ship in 1775, and later officially found founded 1863. It was designated to serve as the maritime commerce for the entire state and was California’s first port. The port area under the commission's control comprises nearly eight miles of waterfront lands, commercial real estate, and maritime piers from Hyde Street on the north to India Basin in the southeast. The list of landmarks under port control include Fisherman's Wharf, Pier 39, the Ferry Building, Oracle Park (formerly AT&T Park, SBC Park and Pacific Bell Park), located next to China Basin and Pier 70 at Potrero Point. Huge, covered piers on piles jut out into San Francisco bay along much of the waterfront, bordered by the Embarcadero roadway.

In 2023, The port's top imports were car parts (electric accumulators), batteries, automobiles (medium sized cars). The top exports at this port were nuts, gas, automobiles, and tar oil.

Case Study - Kaiser Steel

Born in the crucible of World War II, the Kaiser Steel Corporation emerged out of Fontana, California, in 1941 to address a critical need: supplying steel for Henry J. Kaiser's growing West Coast shipbuilding facilities. With costly eastern steel transportation disrupted by the war, Kaiser embarked on a $125 million venture (adjusted for inflation, a staggering $2.24 billion) to construct a mill in Fontana, California. While the government provided a sizable loan, Kaiser envisioned full ownership, unlike the post-war privatization of the Geneva plant in Salt Lake City, Utah. However, wartime concerns over coastal attacks led to a strategic inland location and restrictions on the mill's size, two hurdles that would hamper its future. Another important addition to this beginning would be the creation of Kaiser Permanente in 1945, an insurance program that would help prepay workers health needs… which later would turn would expand to a healthcare insurance and provider we see today.

Despite its limitations, Fontana quickly roared to life. From 1943 to war's end, it churned out over 1.2 million tons of steel ingots, powering the construction of 230 ships, and forging countless armaments. Its productivity even surpassed the larger Geneva plant. Yet, wartime success couldn't erase the inherent challenges - a location ill-suited for efficient transport and a capacity constrained by government lenders.

The peacetime era brought new struggles, while the Korean War production saw a temporary resurgence, the 1970s witnessed Kaiser Steel succumbing to the relentless tide of cheap imports from Japan and Korea. Open hearth furnaces, the technology of choice at the time of construction, proved increasingly outdated. In a last-ditch effort, Kaiser poured capital into modernizing the facility, adding basic oxygen furnaces, and doubling capacity.

Figure 15.9: The Interior of the Kaiser Steel Mill in Fontana, California in 1949. Image by Los Angeles Daily News is licensed under CC BY 4.0

In a strategic pivot, Kaiser sought opportunities beyond domestic steelmaking. The early 1960s saw lucrative contracts with Japanese steel producers, securing long-term iron ore exports from California and Nevada. These deals, while generating significant revenue, couldn't compensate for the company's core struggles.

Despite the modernization efforts, Kaiser Steel couldn't escape the confluence of internal and external pressures. International competition, stringent environmental regulations, labor disputes, and corporate raiders all chipped away at its viability. Finally, in 1981, the inevitable arrived. Kaiser announced the phased closure of Fontana, marking the end of an era for American steelmaking on the West Coast.

Case Study - California Oil & Gas

California's oil and gas industry has been a dominant force for over a century, shaping the state's economic and cultural landscape. In the 19th century, oil played a limited role, primarily replacing whale oil for lamps with kerosene and providing lubricants for the burgeoning machine age. Large-scale oil production, however, hadn't yet arrived.

The 20th century ushered in a dramatic transformation. Major oil discoveries near Los Angeles and the San Joaquin Valley coincided with a surge in demand for gasoline fueled by the rise of automobiles and trucks. California rapidly ascended to become a major oil producer for the nation. Production skyrocketed from a mere 5% of the national supply in 1900 to a staggering 38% by 1914. This boom brought immense economic benefits. Kern County, the San Joaquin Valley, and the Los Angeles basin became hubs for oil drilling and production, creating jobs and fostering rapid development. Offshore oil exploration also began, adding another dimension to the industry.

However, the industry's growth wasn't without consequences. The devastating 1969 Santa Barbara oil spill, where millions of gallons of crude oil poured into the Pacific Ocean, served as a stark reminder of the environmental dangers of offshore drilling. This disaster led to a permanent ban on new offshore oil and gas leases and platforms in both state and federal waters. While existing platforms can drill new wells, expansion possibilities are limited.

Today, California's oil production remains significant, but it contributes a smaller share of the national total compared to its peak. Additionally, the state imports most of its natural gas, another key component of the industry. California faces a complex challenge. Oil and gas continue to be a source of revenue and jobs, but environmental concerns and a shift towards renewable energy sources are pressing issues. The state is navigating ways to balance these competing forces, with a focus on stricter regulations and a gradual transition towards cleaner energy alternatives.

Figure 15.10: Two Men Standing Near a Wooden Shed Enveloped with Dozens of Oil Derricks in a Los Angeles Oil Field, California in 1904. Image by California Historical Society is licensed under CC BY 4.0