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ExporTech: Helping Small Businesses Access Emerging Markets
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We’ve said it before: Contrary to popular belief, manufacturing isn’t dead in America’s cities. In fact, a new study by the Brookings Institute shows that American exports area at their highest level in over a decade. From 2009 to 2010, American exports grew by a whopping 10%--the highest growth seen since back in 1997.
While these numbers are impressive, they could be even better, if small businesses only had a better understanding of how to access foreign markets.
In December 2011, Commerce Secretary John Bryson echoed this fact: “Many companies would like to export – they have great products to sell – but they aren’t sure how to get started. Small businesses in particular often face big challenges getting export financing, building relationships with foreign suppliers, or dealing with unfamiliar foreign rules and regulations.”
Small businesses already face challenges in capacity; the bandwidth needed to understand the complicated emerging market scene often prevents American companies from accessing the 95% of the world’s consumers who outside of the U.S.
To help small manufacturing businesses weave their way through the complicated international trade web, the U.S. Department of Commerce’s International Trade Administration has created the ExporTech program. The program assists participating companies in “developing an international growth plan, provides experts who will vet their plans and connects the companies with organizations…that will help them move quickly beyond planning to actual export sales.”
As outlined in a recent Manufacturing Innovation blog, entrepreneurs meet for three, one-day sessions over the course of three months. Between sessions, participants work with exports to develop their specific export plans. Customized workshops address the needs of each participant and include specialized attention to each company’s exporting and manufacturing challenges.
Since the programs’ inception, 53 ExporTech sessions have occurred in 23 states. More than 360 companies have participated, reporting the following results:
- Average sales increase of $170,000 per company
- Additional sales generated within just 3 to 6 months
- Average cost savings of $34,000
Programs such as these are vital to the success of small and mid-sized manufacturing companies located within our cities. Nine metro areas – including Chicago, Houston and Boston – each have more than 100,000 export-related jobs; New York and Los Angeles each have over 300,000 of such jobs. Cities that used to be manufacturing powerhouses are rejuvenating their economies by focusing on exports: in Milwaukee, Youngstown and Grand Rapids exports account for 90% of their manufacturing base.
As we already know, small businesses are a major driver of job growth, particularly in our inner cities; however, supporting small businesses in manufacturing produces a further catalyst to economic development, as the sale of goods brings money back in to the local economy. Moreover, manufacturing jobs offer good, middle-class wages that can put urban residents on a path to economic opportunity.
How is your city or region supporting export growth? What programs have you deployed to help small businesses navigate foreign markets?
The World Trade Center Kentucky, an affiliate of the international organization, maintains two offices in the state that are the “front line” for information and assistance in this field, including referral to US Dept. of Commerce programs.
By Steven Spalding on 03/15/2012
Tampa has definitely placed international export to the forefront of its agenda for long-term success. Tampa Hillsborough Economic Development Corp’s event schedule is evidence. http://www.tampaedc.com/userfiles/files/International/Events/2011 0401-Events Calendar.pdf
In a tangible sense Tampa has begun implementing Foreign Trade Zones which work to reduce tariffs and various duties on the import and export of goods.
By Andre Satchell on 03/15/2012
The Government of Canada assists SME exporters in several ways.
1. It has a 50 page document called Are You Export Ready, which asks many probing questions about the export readiness of a company.
2. It used to run and it still may run a program called First-time Exporters Program - which is a program designed to help a group of first-time exporters enter new markets for the first time.
3. It used to run and may still run a program called the Cross-border Export Program - it was a special program which took groups of export neophytes to a neighbouring export market. In the case of Canada that market was the United States and it involved entry into the border states in the Northern US that were adjacent to Canadian provinces. The program was effective in part because each new cluster of exporters entering the bordering state could learn from each other. In addition, by clustering the efforts of the exporters it helped Canada’s trade commissioners focus on the markets of specific states which had specific laws and regulations, the markets within each state region were fairly homogeneous and the trade knowledge and resources for each state could be easily gathered rather than having to do it for the whole of the United States…which has many regional markets - The Northeast, The Mid-West, The Southern States, Texas, California, Denver region, The Pacific Northwest, etc.
4. The Program for Export Market Development was a program designed to cluster and provide support for exporters that would be showing their goods and services at the same international trade fair. Support was provided on a one-time basis to help new exporters enter new markets. One of the advantages of the program was that it allowed Canada to create a common area within each trade fair to show-case Canadian goods and services presented by Canadian exporters. This helped raise the profile of these exporters at these large trade fairs.
5. Canada funded the establishment of a export training program that was to be offered at colleges and universities across Canada called the Forum for International Trade Training. The program franchised an eight module program to the colleges and universities. Each school was responsible for recruiting local export specialists and professors to offer the training on various topics such as Export Market Readiness, Export Finance, Trade Logistics, International Marketing, The Cultural Do’s and Don’ts of Export Marketing, etc. The program was hugely successful and graduates with FITT accreditation were quickly recruited by Canadian Export Companies.
6. Special Trade Attachés were established in key export markets. In the case of Canada these STAs would be stationed in key markets that were of interest to Canadian exporters such as Boston, Mass., Austin, Texas and Raleigh North Carolina (high tech hubs); New York (finance); Chicago (Mid-west Gateway); Detroit (Auto-sector matching the Canadian auto-sector in Southwestern Ontario); Hollywood, California (linking the American and Canadian cinema and entertainment industries).
By William Finseth on 03/19/2012
7. Store-front operations - Small Business and Entrepreneurship Advisory Service Centres and something called the Community Futures program - a network of co-funded business advisory centres where SMEs and first-time entrepreneurs and exporters could turn to for help. The centres were usually staffed by one well-trained business graduate. Each centre would have a wealth of self-directed training materials and reference directories (e.g. Dun and Bradstreet’s Exporters’ Encyclopedia, Trade Journals, Economic Journals) and a host of on-line resources. These centres also had volunteer boards that were staffed by successful local business owners and entrepreneurs who would act as mentors to the clients of each centre. The Community Futures program also had a local economic development component which would work with local economic stakeholders to establish specific economic development strategies and business cluster strategies and export strategies for each region. These programs played a major role in helping local communities grow. They also played a major role in protecting the communities during times of economic upheveal and change. For example, after the formal signing of the North American Free Trade Act because of the open borders policy making the passage of goods across borders so much easier, many American companies shut-down their branch plants, which led to high-unemployment in the cities and towns effected. The Community Futures infrastructure at the local level brought together all of the key economic stakeholders of the region, including the three levels of government (municipal, provincial, national) to develop strategies which help reduce the damage that the loss of the branch plants was causing. This led to innovative thinking and a burst of entrepreneurship which saw the launch of hundreds of new Canadian mid-size companies which were created using the valuable human resources, buildings and land and established business infrastructure to launch new businesses. Each level of government stepped in to play its respective roles. For example, large financial reserves which had been built up under Canada’s Employment Insurance Program were spent on retraining employees if that was what was needed to launch a new business. Programs like Investment Canada went into high gear to attract foreign direct investment into these plant vacancies because the buy-in to set up new operations with access to the large US market were so much lower in Canada than in the United States, while offering a much more skilled workforce.
By William Finseth on 03/19/2012
The Integration and Trade Sector of the Inter-American Development Bank develops specialized databases, models and tools to monitor and assess the impact that integration and trade has on the Region. This portal provides public access to these data and tools. You can access their site here http://www.iadb.org/int/intradebid/Home.aspx?Opcion=0?lang=en
By Natalia Laguyas on 03/20/2012
BY Amanda Maher on March 14th, 2012
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