If California was an independent country, it would have the fifth largest economy in the world. However, climate change has had a devastating effect on the California economy. The increased risks of wildfires, rising temperatures and frequent harsh droughts have had a serious impact on the ability of the state to sustain the agriculture that has long been an essential part of its economy, and has reduced tourism as well. Where can California look to boost its economy?
Small businesses
Small businesses are the backbone of a local economy. They help to rejuvenate neighborhoods and create a strong middle class. California might be known as the home of big tech, with huge companies such as Apple, Google, Facebook, HP and Tesla making their homes there but it is also a state with a population of over 39 million people with the buying power to sustain a high number of small businesses. With the popularity of shop local campaigns continuing to grow, the coming years could see a sort of small business renaissance. Support from state and local governments, which has been somewhat lacking in recent years, would help to guarantee a solid foundation on which these companies can thrive.
Gambling
Like many states, California has strict laws regulating the gambling industry. Currently, many card and dice games, including faro and roulette, and even some types of slot machines, are illegal. California’s eastern neighbour Nevada is one of the only states in the country with relaxed gambling laws and this has shaped their economy. Las Vegas and Reno were built on the gambling industry and have flourished for decades, using the draw of the casinos to also develop world-class dining, music and entertainment venues, and other attractions. While some visitors to the state might find the slot machines in premises ranging from grocery stores to airports a bit unsettling, it is impossible to deny the positive impact that the gambling industry has had on Nevada’s economy.
If traditional casinos require too much initial investment to appeal to developers, online casinos have the potential to increase revenue in their place. This UK licensed online casino for example, is one of many contributing to a massive influx of revenue in the UK. Though betting shops have a long history in the country, the rise of online casinos has played a large part in the increasing profitability of gambling. In 2019/2020 alone, the UK casino industry brought in roughly £3 billion in revenue. Though it would require a massive investment of time and energy to make the large-scale legal changes required to legalise more forms of gambling in California, it could provide positive benefits for the economy.
Alternative energy
California has already begun to embrace alternative energy as a way to boost its economy. The extensive deserts east of the Sierra Nevada mountains that run down the centre of the state provide an ideal setting for solar farms. These farms have the dual benefit of generating clean power while protecting the important ecosystems that thrive in these harsh conditions. California’s commitment to increasing its clean energy output has already had a positive impact on its economy – one in seven jobs relating to clean energy in the country are in California and the industry continues to grow. While solar dominates the clean energy industry, geothermal energy projects can finally put the shifting tectonic plates rumbling away under California to good use.
One possible issue that arises when considering expanding wind farms into coastal areas is the potential for them to have a negative impact on tourism. Tourists flock to the Southern California coast each year to enjoy the gorgeous views, benefiting the economy in the process, and some may be less interested in visiting if they know these views will be disrupted. However, this is a minor risk compared to the potential rewards, both economic and for the planet.
The American West has long been shaped by a ‘can do’ spirit that rises to meet the challenges placed in front of it. As long as Californians work together and continue to embrace this spirit and look for new opportunities, they will be able to overcome any economic challenges. The future might be uncertain but California is well-placed to succeed.
