California is growing in spite of its draconian business regulations. Perhaps things would be even better with more friendly laws for small businesses.
California is the most populous state, contains more people than the 21 least populous states combined. [1]
Taking China and India as a reference, I believe population is a big reason for its growth.
1. https://en.wikipedia.org/wiki/List_of_U.S._states_and_territ...