Much of the state's industrial production depends on the processing of farm produce and upon such local resources as petroleum, natural gas, lumber, cement, and sand and gravel. Since World War II, however, manufacturing, notably of electronic equipment, computers, machinery, transportation equipment, and metal products, has increased enormously. Defense industries, a base of the economy especially in S California, have declined following the end of the cold war, a serious blow to the state. Farther north, Silicon Valley, between Palo Alto and San Jose, so called because it is the nation's leading producer of semiconductors, is also a focus of software development. California continues to be a major U. S. center for motion-picture, television film, and related entertainment industries, especially in Hollywood and Burbank .
Tourism also is an important source of income.
One of the state's most acute problems is its appetite for water. In the lush Imperial Valley , irrigation is controlled by the All-American Canal , which draws from the Colorado River. In the Central Valley the water problem is one of poor distribution, an imbalance lessened by the vast Central Valley project . Cutbacks in federally funded water projects in the 1970s and 80s led many California cities to begin buying water from areas with a surplus, but political problems associated with water sharing continue. Listing from Electric Library , a pay service.