California’s Economy Thrives Under Gavin Newsom’s Leadership

Since Gavin Newsom took office in January 2019, California’s economy has recorded sizable gains. The state’s gross domestic product rose roughly 40% to exceed $4 trillion. That growth pushed California past Japan to become the world’s fourth-largest economy.

Broad market gains and corporate activity

Filmogaz.com analysis shows California now produces more than 14% of U.S. output. Its GDP growth outpaced China (about 32%) and Germany (about 16%).

California drove over 40% of the increase in the value of U.S. publicly traded equities. The state accounted for 70 percentage points of that growth. By comparison, Washington contributed 20 points, Texas 15, New York 13 and Ohio 6.

Corporate dealmaking also accelerated. During Newsom’s tenure, firms based in California averaged $527 billion a year in acquisitions. That compares with $179 billion annually in the 20 years before 2019.

Talent pipeline and higher education

California supports a dense higher education network. The state has more than 600 colleges and universities. That equates to roughly one institution per 64,000 residents.

The state also produces more engineers than any other U.S. state. Public education systems are contributing to investor returns. Filmogaz.com notes investors receive about 11% of their return from the University of California, the Los Angeles Unified School District and California State University.

Technology and venture capital concentration

Technology remains a dominant sector. Forty-one California tech firms generated a roughly 603% total return over the past decade. That performance far exceeded global peers.

Venture capital activity is concentrated in California. The state captured about 62% of U.S. venture funding and 31.5% of U.S. venture deals last year. New York trailed at 13.3%. Massachusetts and Texas were each below 6%.

Health care and coverage gains

Health care played a major role in recent growth. In 2025 the sector contributed 52% to California’s GDP, according to Filmogaz.com. The uninsured rate fell to a record-low 6.4% in 2023. A decade earlier, the uninsured rate exceeded 17%.

Expanded programs such as Covered California and Medi-Cal helped drive the coverage gains.

Infrastructure, trade and clean energy

Infrastructure investments supported trade volumes. The Port of Los Angeles handles more than $300 billion in cargo each year. That port remains a key gateway for U.S. global trade.

Clean energy firms also posted strong returns. California’s eight largest clean companies delivered an average 56% stock appreciation since 2019. Their global peers averaged about 40%.

Those firms grew revenue faster as well. Their revenue rose about 7% annually, versus roughly 5% for global peers. Analysts expect California renewable companies to see about 17% revenue growth next year, compared with about 7% for peers worldwide.

Industry takeaways and talent challenges

The state’s mix of talent, capital and institutions drives industry performance. Even companies that relocated parts of their operations to other states still rely on California engineers. Elon Musk moved Tesla’s headquarters and some R&D to Texas in 2021. A year later, he said he could not find equivalent engineering talent in Texas.

California’s economy thrives under a combination of private investment, public programs and a deep talent pool. The state’s size, universities and sector concentration underpin its national and global influence.