The State of California has now surpassed the United Kingdom as the fifth largest economy in the world by growing their gross domestic product $127 billion over the last two years, to $2.7 trillion. The U.K’s economic shrunk this year, believed to be a result of exchange-rate fluctuations the country has suffered over the last couple of years.
“We have the entrepreneurial spirit in the state, and that attracts a lot of talent and money,” said Sung Won Sohn, an economics professor at California State University Channel Islands. “And that’s why, despite high taxes and cumbersome government regulations, more people are coming into the state to join the parade.”
The revelation is part of data released by the federal government last week that shows the growth is due to the large population of the state, the influence of Silicon Valley, as well as the film industry.
Real estate and financial services grew by $26 billion over the course of the two years, the information sector grew by $20 billion and manufacturing increased by $10 billion. The news comes six years after the State dropped to tenth on the list of biggest economies, due to the great recession that ravaged the United States in the late 2000s.
California has contributed 16% to the United States job growth, with only 12% of the population. The growth is said to be concentrated in areas like San Francisco, San Jose, and San Diego.
The biggest surprise of all may be that California has surpassed the U.K.’s economy with 25 million less more people living there. The United States, China, Japan and Germany are the only countries with bigger economies then that of California’s now, an impressive the feat is in today’s economy
California isn’t the only U.S. state with a large economy – Texas has the 11th biggest economy with $1.7 trillion and New York has the 11th biggest with $1.5 trillion.
“The state calculates California’s economic ranking as if it were a country by comparing state-level GDP from the Bureau of Economic Analysis at the U.S. Department of Commerce with global data from the International Monetary Fund,” according to The New York Times.
Photo by Ken Lund via Flickr