Exporting in the Global Marketplace

As economic globalization continues to snowball, the importance of international trade and commerce to the growth of US middle market companies is increasingly apparent. Have you thought about taking your business global? 

The good news is that despite all the doom and gloom we hear about today's economy, American middle market companies stand on the broad shoulders of the US' position as one of the top five of the world’s leading exporters of good and services.

CIA-The World Fact Book, 2010

EXPORTS NOW 10% OF US GDP 

Despite the trends in the overall economy over the last 10 years, U.S. exports—aided by the depreciation of the US dollar —have continued to grow to nearly 10 percent of the US GDP—notwithstanding a dip in 2009.

In addition, our nation’s export-import balance of trade has improved in the midst of the recent financial crisis—a clear indicator of where opportunity lies for middle market CEOs.

Source: CEIC

BENEFITS ABOUND

Among some of the top benefits from our growing export prowess are new consumer market opportunities for US businesses, growth in new sales, and new job creation. It is estimated that for every additional $1 billion in exports, 5,000 new jobs are generated. Aware of this virtuous circle, the US National Export Initiative (NEI) aims to double American exports in order to generate an estimated two million new jobs over the next five years.

Nearly 98 percent of US exporters are SMBs (small and medium-sized companies with fewer than 500 workers). In 2009 these SMBs accounted for 33 percent of total exports, according to the US Commerce Department.

©iStockphoto.com/MCCAIG

TOP GLOBAL TARGET MARKETS

US Census Bureau data reveals that 58 percent of US exporters export to only one market—mainly Canada. Below are the top 10 world markets for US exports (in billions of dollars). Given long term global economic trends and near term opportunities, now is the time for middle market business owners to own the priority of familiarizing themselves with what the below means to their businesses now and over the coming three to five years.

Source: US Census Bureau

China in particular is a significant growth market for SMBs.  In fact, more than 90 percent of all US exporters to China are SMBs. Last year US exports to China rose faster than any of the other top five export destinations by approximately 32 percent. And over the last 15 years, the number of known SMBs exporting to China has increased by nearly 800 percent.

Other developing countries showing significant potential, as well as stable growth and increasing receptivity to imports, include India (17 percent last year), Indonesia (36 percent), and Vietnam (20 percent). And do not overlook Finland, Singapore, and other smaller developed countries showing significant growth.

TOP INDUSTRIES FOR US EXPORT 2010 - 2011

High potential sectors include the food industry as well as medical devices and disposables industry. America’s lead in higher education in the health and medical fields—and traditionally high levels of R & D investment and achievement—continues to  produce high quality products using advanced technology that possess a competitive advantage in the international marketplace.

Other sectors are referenced in the following chart:

Source: CEIC

How Can Your Company Benefit from these Opportunities?

We recommend you incorporate these best practices into your plans to export abroad:

1)     Differentiate your products and services: They must be the hero that carries your business toward growth. Are they?

2)     Learn and master the ins & outs of your target market and its culture

3)     Make your vendors partners to help build your brand

4)     Consider strategic alliances for co-production, co-marketing, and co-distribution

5)     Plan - Do - Review:

• Clearly define your objectives, and your how-to to get there
• Execute with regular accountability to time, growth, and profitability goals
• Revisit your goals regularly, and revise them as inevitable hurdles arise

This article is part of NY Report's Accelerate 2012 series. To read more, click here.