California’s economy is so substantial that its size and power is best understood when compared to entire nations rather than other states. In fact, if the state of California were an autonomous country, it would have the eighth largest economy in the world. The Gross State Product for California was almost $1.9 trillion in 2011, representing more than one tenth of the GDP for the entire US.
Students in the state’s many business schools are more often pursing international business majors, as they have every reason to anticipate more investment in the state by foreign-owned multinationals and continued expansion into foreign markets by California-based companies. California is poised to benefit from the recently negotiated US-Columbia Trade Promotion Agreement (CTPA), which will eliminate tariffs on 87 percent of US exports to Columbia. The elimination of these tariffs will spur trade between the US and Columbia to such an extent that it is expected to increase US GDP by $2.5 billion.
According to the International Trade Administration, the CTPA will also provide new opportunities for California’s business community to access Columbia’s $134 billion per year business process outsourcing (BPO) services market. Since 2004, when the US-Chile trade agreement went into effect, California’s exports to Chile have grown by 272 percent. It is expected that the new CTPA will provide a similar boost to the trade exchange with Columbia, California’s newest South American trade partner.
Nearly 60,000 California-based businesses were involved in international trade in 2011, and of these, most were classified as small to medium in size. These smaller enterprises were responsible for 43.6 percent of California’s total exports to foreign markets in 2011. These exporting businesses are helping to drive the demand for international business majors who will be needed for their expertise in global supply chain and logistics management, foreign market analysis and business consultation, as well as custom brokerage and trade law compliance.
California’s International Trade Partners
According to the International Trade Administration, in 2010 California exported merchandise and services totaling $143.2 billion to foreign markets. California’s number one trade partner is its neighbor to the south, Mexico, which received $20.9 billion in exports from California in 2010. As California’s second biggest trade partner, Canada imported $16.2 billion in products, services and raw materials from the Golden State in 2010.
With its many shipping ports, California is well positioned geographically to participate in trade with Pacific Rim nations. Among California’s leading Pacific Rim trade partners are China, which imported $12.5 billion in materials, finished goods and services from California in 2010; followed by Japan with $12.2 billion and South Korea with $8 billion.
International Business Jobs in California
Some of the biggest and most successful global corporations are headquartered in California, providing a range of opportunities for professionals who have honed expertise in international business. According to the International Trade Administration’s 2010 report, multinational corporations were responsible for employing 561,000 workers and corporate professionals in California.
Leading international businesses based in California include computer and electronic products producers, which were responsible for $43.1 billion of California’s total international exports in 2010. Global consumer electronics innovator, Apple Incorporated, is based in Cupertino, providing over 60,400 jobs in California and around the world. In nearby Silicon Valley, worldwide e-commerce giant, eBay, operates its headquarters, while Hewlitt-Packard, one of the most recognized names in personal computer manufacturing, is based in Palo Alto. Network solutions giant, Cisco Systems, is headquartered in San Jose, and employs more than 63,000 workers and office staff worldwide.
Corporations involved in both conventional and alternative, green energy solutions have made their home in California. Oil giant, Chevron Corporation, with its US headquarters in San Ramon, is active in energy exploration and production in more than 180 countries around the world. BP West Coast Products, US subsidiary of the UK’s British Petroleum, has its headquarters in La Palma, from which the company facilitates petroleum exports to foreign markets in South America, Europe, Australasia and Africa. Solar Turbines Incorporated, wholly owned subsidiary of Caterpillar, Inc., with its headquarters in San Diego, manufactures compressors and generators used to provide green energy solutions in solar panel and wind turbine applications, and employs over 5,500 workers worldwide.
Making International Business Contacts in California
California offers many resources for those interested in information about the impact international business is making on the state: