Helping States Encourage Exporting

by Renee Carter, Executive Director, TradeRoots

Export development is often tacked onto the bottom of the economic development task list. The reality, however, is that international trade is crucial to creating good jobs and local prosperity. If more leaders appreciated the enormous potential of consumers in export markets, particularly for small and medium-sized U.S. businesses, they would pursue trade with a zeal equivalent to that spent in the quest for foreign direct investment.

U.S. companies that export products or services grow faster and fail less often. They also pay their employees an average of 15 percent more than non-exporting companies. Yet economic developers who comprehend this potential to create high-quality jobs and a diverse tax base rarely are able to get the support they need for trade programs.

That’s why the U.S. Chamber of Commerce began its TradeRoots trade education and advocacy program seven years ago at the request of its membership, 97 percent of which is small and medium-sized companies (SMEs). TradeRoots works through the U.S. Chamber’s vast domestic and global network to educate small and medium-sized businesses on available resources to make exporting a viable growth strategy. The program involves a four-step process:

Education (for leadership and businesses),
Facilitation (supporting SMEs),
Coalition-building (to increase state capacity for sustained efforts), and
Advocacy (pro-business trade legislation).

Trade experts share their knowledge at a TradeRoots Best Practices Summit in Coral Gables, Florida, in January 2006.

SMEs account for 97 percent of all U.S. exporters, yet they do not produce the majority of exports by value, remaining far below their full export potential. However, they represent a significant, growing share of international commerce transacted in today’s highly specialized supplier chains.

Since its creation, TradeRoots has taken its initiatives and programs to 47 states in the U.S. Experience has shown that the quality and structure of trade development programs varies widely and cannot be compared across state lines. Despite differences in local needs, political climates, and available resources, however, several key activities are consistent of successful trade programs.

1. Establish a statewide alliance.

Despite federal and state trade development offices, the trade assistance infrastructure in most states typically is limited, and almost nonexistent in rural areas.Where capacity does exist, contact between trade development organizations might be common, but collaboration frequently assumes no greater form than co-marketing of programs. Too, intense competition for funding and disparate accountability requirements often create more of a truce than true joint efforts. Sometimes the difficulty is as simple as recognizing those with whom they share interest.

A consensus to recognize the state government as the lead organization in creation of a public-private alliance is essential. Nationwide, experience indicates that leadership by a state entity of a small group charged with designing, managing, and implementing a strategic plan produces the best results. The development of a strategic plan is as necessary to a statewide trade promotion alliance as it is to a Fortune 500 corporation.

State leadership can effectively bring key stakeholders together to establish priorities and identify obstacles within the plan. Members of this core group should be representative of political interests (i.e., governor and legislature), trade development groups, chambers of commerce, select CEOs and entrepreneurs, higher education advocates, and a respected national organization participant. Successful initiatives take this strategic plan to a larger alliance of all interested parties and give the alliance an identity, a communications plan and assigned responsibilities.

» Page 2 of 3