According to the original plans of Georgia's founders, its people were to be sober spinners of silk. The reality was far different, however; during the period of royally appointed governors, Georgia became a replica of Carolina, a plantation province producing rice, indigo, and cotton. After the Revolution, the invention of the cotton gin established the plantation system even more firmly by making cotton planting profitable in the piedmont. Meanwhile, deerskins and other furs and lumber were produced in the backcountry; rice remained an important staple along the coast; turnpikes, canals, and railroads were built; and textile manufacturing became increasingly important, especially in Athens and Augusta.

At the end of the Civil War, the state's economy was in ruins, and tenancy and sharecropping were common. Manufacturing, especially of textiles, was promoted by "New South" spokesmen like Henry Grady of Atlanta and Patrick Walsh of Augusta. Atlanta, whose nascent industries included production of a thick sweet syrup called Coca-Cola, symbolized the New South idea—then as now. Farmers did not experience the benefits of progress, however. Many of them flocked to the mills while others joined the Populist Party in an effort to air their grievances. To the planters' relief, cotton prices rose from the turn of the century through World War I. Meanwhile, Georgians lost control of their railroads and industries to northern corporations. During the 1920s, the boll weevil wrecked the cotton crops, and farmers resumed their flight to the cities. Not until the late 1930s did Georgia accept Social Security, unemployment compensation, and other relief measures.

Georgia's economy underwent drastic changes as a result of World War II. Many northern industries moved to Georgia to take advantage of low wages and low taxes, conditions that meant low benefits for Georgians. The raising of poultry and livestock became more important than crop cultivation, and manufacturing replaced agriculture as the chief source of income. In 1997, less than 1% of the employed labor force was working in agriculture; 32% were service workers; 22% retail salespeople; and 19% were manufacturers. Georgia is a leader in the making of paper products, tufted textile products, processed chickens, naval stores, lumber, and transportation equipment.

Textile manufacturing, Georgia's oldest industry, remains its single most important industrial source of income until 1999 when output from food processing exceeded it. From 1997 to 2001, annual textile output declined 8.4% whereas output from food processing increased 12.1%. Other manufacturing sectors were also increasing, so that from 1997 to 2000, there was an overall 16% increase in Georgia's manufacturing output. More than half of the gain was lost, however, in the national recession in 2001, as manufacturing output fell 8.3% in one year, reducing the net gain since 1997 to 6.4%. By contrast, output from general services increased nearly 40% 1997 to 2001, and from financial services (including insurance and real estate) increased almost 32%. Output from other service areas—wholesale and retail trade, transportation and public utilities, and government—all increased more than 25% 1997 to 2001. The national recession of 2000, however, impacted Georgia's economy worse than most, as its strong annual growth rates at the end of the 20th century (8.2% in 1998, 8.5% in 1999 and 6.7% in 2000) dropped abruptly to 1.5% in 2001. The state lost more than 133,000 jobs from January 2001 to October 2002. Layoffs in the fourth quarter of 2002 amounted to a 2.2% increase over the fourth quarter of 2001, the worst performance in the country.

Georgia's gross state product in 2001 was 10th in the nation at $299.9 billion, to which general services contributed $61.1 billion; financial services, $49 billion; trade, $55.1 billion; government, $37.2 billion, transportation and public utilities, $33.4 billion, and manufacturing, $43.5 billion. The public sector constituted 12.4% of gross state product.