Top Sectors in State

Most descriptions of the Southern California economy highlight the importance of aerospace, entertainment, real estate, finance and tourism. But by far the greatest number of businesses and jobs are in the retail and service sector, according to a new study from Claremont Graduate School’s Center for Applied Social Research.

A third of the state’s gross economic output derives from California’s 400,000 retail and service establishments, the study said. And nearly half of those businesses are found in the five counties of the Los Angeles area: Los Angeles, Orange, Ventura, Riverside and San Bernardino counties.

While 80% of retail and service establishments employ five or fewer workers, the study noted, these small businesses create more jobs than any other sector of the economy and help fulfill the California dream of self-employment. They also serve as the entryway to the working world for thousands of youths, older people, women, immigrants and the less educated.

The study, written by Allan W. Wicker and Jeanne C. King, also noted: “Although retail/service establishments are numerous in Southern California, their existence is often precarious and their life spans are typically short.”

The average age of Southland retail establishments is 6.8 years, with the oldest being department and drug stores, auto dealerships and appliance outlets. The shortest-lived businesses tend to be specialty foods stores, pet shops, art supply houses and, of course, bars and restaurants.

The greatest concentration of retail and service establishments per 10,000 residents is found, not surprisingly, in affluent Beverly Hills, Palm Desert, Palm Springs and Costa Mesa. The least number of such businesses is found in Oxnard and Ontario.