The Next American Economy by William J. Holstein

Author:William J. Holstein
Language: eng
Format: epub
Publisher: Walker Publishing Company
Published: 2011-09-14T16:00:00+00:00

SEVEN

Gearing Up the American Export Machine

North Carolina Builds Its High-Tech Exports

NEARLY EVERYONE AGREES that one important key to creating economic growth, wealth, and jobs is encouraging smaller and medium-sized American companies to become more active internationally. After all, 95 percent of the world’s population is outside the United States. Companies that export typically pay higher wages and stay in business longer. America has 30 million businesses, yet less than 1 percent export or engage in international strategies, according to the U.S. Department of Commerce. Although that 30 million includes mom-and-pop businesses that never would be expected to export, there is huge untapped potential even if the number of companies with the potential to export is just 3 million, a tenfold increase over today’s number. President Obama has declared that his administration wants to double U.S. exports over the course of five years, creating 2 million jobs.1

But the American export promotion and financing system is fragmented and disorganized compared with the ecosystems that the Japanese and Germans have built.2 U.S. system technology licensing rules, the subject of constant infighting among the U.S. Departments of State, Commerce, and Defense, also impose disincentives against exporting.3 Economists in New York and Washington have long argued that the only way to increase exports is to drive down the value of the dollar, which has the effect of making American manufactures cheaper abroad. Others advocate enacting new free trade agreements.

But the real challenge is at the state and local levels, where agencies have the primary responsibility of encouraging new entrants to enter the export game and helping existing small exporters to expand. As in technological clusters, that requires improving institutional alignment and collaboration and improving the flow of information to lubricate the wheels of commerce. That can be consciously modeled; it does not have to happen by accident or at the whim of foreign currency exchange rates. Creating an export ecosystem also depends on having experienced people in the right positions.

North Carolina has traditionally been known for tobacco, textiles, and furniture. But as those industries have gone through regulatory and economic upheaval and lost tens of thousands of jobs, the state has been obliged to make a push into higher-technology goods—and the ability to export some percentage of those goods has been essential to sustaining the growth of those industries and the jobs that go with them.

Unlike some other states and regions, North Carolina has developed and maintained a robust ecosystem to support the go-global efforts of its small entrepreneurs. The state, which consists of very different regions based on geography and industry mix, has seven economic development partnerships that perform a variety of functions at the grassroots level. One is to connect the chief executives of small firms interested in exporting with the state’s Department of Commerce, which maintains seven offices around the world, in Shanghai, Hong Kong, Toronto, Frankfurt, Tokyo, Seoul, and Mexico City.

Small business centers at community colleges also refer CEOs to the state. The state cooperates, in turn, with the U.S. Department of Commerce and its U.

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