California’s economy suffers from multiple personality disorder. There is not a single California marketplace. Instead, there are four centers of economic mass, and each is on a different path. The Bay Area and, to a lesser extent, San Diego, are booming. Call it California’s “tech coast.”California’s tech sector is vigorous, and it’s driving statewide economic growth rates that occasionally exceed the U.S. growth rate. California’s tech sector will continue to prosper for the foreseeable future, and California’s tech coast will continue to be one of the world’s most innovative and vigorous economies. The Greater Los Angeles area and parts of the East Bay comprise an economy still in transition from an industrial economy to something else. Call it “post-industrial California.” Post-industrial California has already seen the demise of its tire, steel and auto manufacturing, along with most of its ship building and aircraft manufacturing. The transition has been difficult, but insulated by its diversification, climate, ports and location on the prosperous Pacific Rim. Post-industrial California has mostly avoided the devastation we see throughout the Rust Belt. Although, we note that San Bernardino has the nation’s second-highest poverty rate for cities of more than 200,000. Post-industrial California’s transition will continue. We think this mostly means that its economy will plod along, growing very slowly most quarters with an occasional quarterly decline. Inland California (the Great Central Valley, the deserts and rural Northern California) is suffering what amounts to a depression. Call it California’s “poverty belt.” Unemployment rates are extraordinary, and they were high even in the mid-2000s. Poverty is persistent. Economic growth is rare and localized. Expect little economic growth in California’s poverty belt. Then there is California’s “geriatric coast.” It’s continuous from Los Angeles to the Silicon Valley. It skips the Bay and begins again at the north end of the Golden Gate Bridge, extending through Mendocino County. This area is where wealthy and, usually, older, people come to enjoy life. It is a consumption economy with little investment or growth. The jobs, outside of its still-impressive agricultural sector, are mostly related to tourism, retail, restaurants, government and businesses that support a wealthy and aging leisure class. There is one growth industry here: medical care. It will continue to be an increasingly important component of the geriatric coast’s economy. Think of it as a big, wealthy, Retirement Village by the Sea. It will get older and richer as the middle class continues to shrink. California’s multiple personality economy poses policy challenges. Forces for the status quo are strong, and many participants in California’s policy conversations have strong incentives not to see California’s fundamental economic challenges. They can usually cite some tech coast statistics and argue that California’s economy is just fine, or better than fine. Without significant policy changes though, California’s tech sector and venture capital infrastructure will eventually go the way of the state’s industrial base; they will simply disappear. Californians will eventually notice that the center of innovation has moved east or overseas. It will take longer for tech to leave than it took for, say, the automobile industry to leave, because of increasing returns to scale and the virtuous cycle of tech and venture capital. Still, eventually, other centers of innovation will reach critical mass. It could be Austin. It could be Singapore. It won’t matter much to Californians where it goes. It will be gone, and maybe then Sacramento will recognize that California has serious economic challenges. Bill Watkins is executive director of California Lutheran University’s Center for Economic Forecasting and a CLU economics professor.