Biology of Business

Los Angeles

TL;DR

A 1913 aqueduct transformed a 500K-person desert pueblo into a $1T economy—Hollywood, aerospace, and 31% of US container trade followed the water.

City in California

By Alex Denne

Los Angeles exists because William Mulholland refused to let geography decide what was possible. The Spanish founded a modest pueblo here in 1781—not because the Los Angeles River was impressive, but because it was the only reliable water source in a coastal desert basin with 300 days of sunshine and perfect growing weather. That river could support perhaps 500,000 people. Today, 13 million live in the metropolitan area.

The transformation began in 1913, when Mulholland completed a 233-mile aqueduct from the Owens Valley, moving water uphill through sheer engineering will. 'There it is: take it,' he said at the opening ceremony—and Los Angeles took everything. Without imported water, the city couldn't have absorbed the industries fleeing toward it: first the movie studios escaping Edison's East Coast patent monopoly (the Ninth Circuit refused to enforce his claims, and Mexico was just over the border if enforcers got close), then the aircraft manufacturers attracted by year-round flying weather and cheap desert land for runways.

Each wave built on the infrastructure of the last. Hollywood's studios created skilled technicians and optical equipment—which proved useful when Douglas Aircraft set up in a Santa Monica movie studio in 1920. By World War II, 60-70% of American aerospace had concentrated in Southern California, producing 300,000 aircraft. The same airfields and aerospace expertise later seeded the defense electronics industry, and the same deal-making culture shaped Silicon Beach's entertainment-tech hybrid.

The port complex of Los Angeles and Long Beach now handles 31% of all U.S. containerized trade—America's gateway to Asia. In 2024, LA moved a record 10.3 million TEUs, with the metropolitan GDP exceeding $1.06 trillion. The January 2025 wildfires caused $28-54 billion in damages, exposing infrastructure vulnerabilities in a basin engineered for unlimited growth.

By 2026, LA faces the tension inherent in all ecosystem engineering: systems designed for one environment become brittle when conditions change. Water politics, fire risk, and trade war disruptions test whether the city can adapt its infrastructure as creatively as Mulholland once built it.

Key Facts

3.8M
Population

Related Mechanisms for Los Angeles

Related Organisms for Los Angeles