Three states — California, Washington, and Massachusetts — house America’s technology economy. Their information sectors grew 861%, 1,172%, and 519% respectively since 1997. No other force in the American economy comes close.
The information sector — NAICS 51, covering software, data processing, broadcasting, telecom, and publishing — is the single most transformative force in the US economy. Nationally, it grew from roughly $500 billion to $1.70 trillion in real terms since 1997, a 240% increase. But three states dominate it so completely that they produce 40% of the national total.
California ($476B), Washington ($154B), and Massachusetts ($52B) combined for $682 billion in information sector real GDP in 2024. Washington’s concentration is the most extreme: the information sector is 21.9% of its entire economy, essentially making it a tech-state in the same way North Dakota is an energy-state.
California’s information sector is the largest by far, growing from $49 billion to $476 billion. But Washington’s growth rate is even more extraordinary: from $12 billion in 1997 to $154 billion in 2024 — a 1,172% increase. This is the Amazon and Microsoft effect. Amazon Web Services alone generates more revenue than the entire GDP of many US states, and its value added flows largely through Washington.
Massachusetts took a different path. Its information sector grew from $8.3 billion to $51.6 billion (519%), driven not by consumer tech but by biotech informatics, enterprise software, fintech, and cybersecurity. Companies like HubSpot, Akamai, and the Cambridge biotech corridor define a tech ecosystem distinct from Silicon Valley or Seattle.
The COVID-19 pandemic was rocket fuel for all three. Washington’s information sector jumped from $84 billion (2019) to $103 billion (2020) — a 22% increase in a single year as cloud computing, e-commerce, and remote work tools surged in demand.
| State | Total GDP 2024 | Info Sector 2024 | Info as % of GDP | Info Growth 1997–2024 |
|---|---|---|---|---|
| California | $3,307B | $476B | 14.4% | 861% |
| Washington | $702B | $154B | 21.9% | 1,172% |
| Massachusetts | $629B | $52B | 8.2% | 519% |
| Three-state total | — | $682B | — | — |
| US total info sector | — | $1,704B | 7.3% | ~240% |
| Three-state share | — | — | 40.0% | — |
The geographic concentration of the tech economy is without precedent in modern American economic history. No three states command 40% of any other major sector. Oil and gas, manufacturing, finance — all are more dispersed. Yet the information sector, which is now the fastest-growing and arguably most strategically important sector, is concentrated in three metro areas: the San Francisco Bay Area, the Seattle metro, and the Boston–Cambridge corridor.
This concentration explains why housing costs in these regions have detached from the rest of the country. It explains why state tax revenues in California and Washington are among the most volatile — they rise and fall with tech stock prices and IPO cycles. And it raises a question that policy makers have only begun to grapple with: what happens to the rest of America when 40% of the information economy lives in three states?
The technology economy has created the most geographically concentrated wealth engine in American history. Three states produce 40% of the nation’s information sector GDP. Washington’s information sector grew 1,172% — from $12 billion to $154 billion — making it the most dramatically transformed major state economy of the 21st century.
When we wonder why housing costs in San Francisco, Seattle, and Boston seem disconnected from the rest of America — this is the answer. The tech corridor is not just growing faster; it is operating on a fundamentally different economic plane.