Entrepreneurial Nation by Ro Khanna

Author:Ro Khanna
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2012-03-03T16:00:00+00:00

Investing in the U.S. and Foreign Commercial Service

The U.S. and Foreign Commercial Service is the principal export promotion agency of the federal government. It’s made up of 109 domestic offices, which I oversaw and whose function I outlined at the beginning of this chapter. It also has foreign commercial officers in our embassies in nearly 80 nations. The service has nearly 20,000 clients like Schramm, Inc., counseling almost 10 percent of American businesses that are currently exporting. It’s responsible for facilitating thousands of export sales worth more than $50 billion each year. The agency achieves these results with a headcount of less than 1,500 individuals and a budget of about $250 million.

Ask almost any businessperson who’s retained the Commercial Service, and he or she will tell you that it’s a government agency that works. For a fee of several hundred dollars, businesses receive assistance that often translates into six-figure export sales. The service’s success is attributable to its culture. It’s a bottom-up organization in which the best ideas come from the field, not from Washington bureaucrats. The organization has zero tolerance for paper pushers who are content to check off boxes. Regional managers get rid of such dead weight in the annual performance reviews. The trade specialists who survive show initiative. They offer customized and innovation solutions to help clients increase their global market share, routinely working on a weekend or late into the evening.

Despite this success, for almost a decade the Commercial Service has faced shrinking budgets when you take inflation and rising rent overseas into account. Our nation’s lack of support for the women and men who are advancing our economic interests is appalling. When I joined the administration in 2009, trade specialists didn’t even have BlackBerries. We scrounged through the budget to provide them. The Commercial Service still requires funding to improve its web portal for exporters, to meet basic travel needs and to ramp up staffing. Some states have stand-alone offices with only one Commerce official to service the entire population! Many overseas posts, such as those in China and Canada, are woefully understaffed, resulting in a waiting list for American businesses that seek assistance in selling into those markets.

Unfortunately, instead of providing the service with more funding, Congress proposed nearly $100 million of aggregate cuts in its budget and that of related export promotion agencies.14 These cuts are motivated by a sincere desire to reduce our federal deficit. But the service, which supports more than $200 in export revenue for every tax dollar spent, helps grow the tax base.

Consider what other countries are doing when it comes to export promotion. According to economists at the Department of Commerce who have studied this matter, China’s Ministry of Commerce has nearly 4,000 individuals dedicated to export promotion, with an estimated budget of $1.5 billion. In other words, China has nearly three times the personnel we do, and six times the budget. Or take Britain. Despite having a significantly smaller population, it has a budget of nearly $500 million and almost 2,400 trade specialists.

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