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January 23, 2013
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Nearly half of all business growth now comes from exporting EXPORT STRATEGY: Foreign Markets Eyed by New MSU Business Project
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Nearly half of all business growth now comes from exporting, a survey by Michigan State University has found.
"From 2010 to 2011, exports accounted for 46 percent of the growth in the U.S. economy," said J.D. Snyder, director of the Regional Exporting Strategies Project, adding:
"The majority of U.S. exports are shipped by small and medium size businesses. We want to expand small business exports to create new jobs in Michigan."
The Institute of Supply Management (ISM) reported that December was the fourth consecutive month of expanding orders from American businesses.
The ISM export gauge showed sales growth overseas for the first time in seven months. American manufacturers are becoming increasingly optimistic about the outlook for sales in 2013. This is significant because it shows that factories will support economic expansion in the coming year.
Michigan produces more than 300 commodities on a commercial basis, making it second only to California in agricultural diversity. In 2011, Michigan agricultural exports generated nearly $2.8 billion.
Currently, Michigan's top exports are soybeans, corn, wheat, dairy and fruit. The Michigan Food and Agriculture industry plans to double its exports by 2015.
As small and medium-sized manufacturers in Michigan look to increase sales this year, they should consider implementing or increasing exporting initiatives, states the Michigan Manufacturing Technology Center (MMTC) in Plymouth.
Many manufacturers have the misconception that only large manufacturers have the ability to export goods, but this simply isn't true.
Small and medium sized manufacturers account for nearly 97 percent of US exporters. However, this group represents only 30 percent of the total export value of US goods. Furthermore, of the small businesses that do export, nearly two-thirds of them only export to one country.
Many of these companies can boost their exports by merely expanding the number of countries that they sell their products to.
The MSU Center for Community and Economic Development (CCED) has launched another phase of the Regional Exporting Strategies Project to expand foreign markets for small and medium size businesses in three Michigan regions, including the:
East Michigan region consisting of 14 counties in the Thumb and around Saginaw Bay;
I-69 International Trade Corridor consisting of four counties from St Clair County west to Shiawassee County; and the
Eastern Upper Peninsula (Chippewa, Luce, and Mackinac Counties).
The project, funded by the U.S. Economic Development Administration (U.S. Department of Commerce), runs through 2013.
CCED is collaborating with the St. Clair County Economic Development Alliance and the other three I-69 International Trade Corridor counties; the East Michigan Council of Governments (EMCOG); and the Eastern Upper Peninsula Regional Planning & Development Commission (EUPRPDC) to identify new, innovative ways to increase small business exporting.
Exporting represents a key market to help small and medium-size companies in these regions outpace the current sluggish economy and create new jobs.
The MSU CCED project team and three regional partners are collaborating to expand new export market opportunities using a four-pronged approach, including:
1) Bi-national regional collaboration with public agencies and companies in Ontario;
2) Creating and implementing regional exporting strategies focused on small businesses;
3) Strategic leveraging of local exporting infrastructure assets in each region;
4) Expanding the network of commercial lenders offering SBA export financing to small companies; and
5) Conducting outreach and site visits with MEDC staff to small companies highlighting export opportunities and assistance resources.
"Collaborating with the MSU Center for Community and Economic Development has allowed us to augment our efforts to help local businesses reach foreign markets," said Dan Casey, CEO of the Economic Development Alliance of St. Clair County. "The partnerships we will create during this project will deploy resources and strategies to help area businesses for many years to come."
In Phase I of the project, the MSU Project Team collaborated with EUPRPDC and EMCOG in developing two of the first six regional exporting strategies in the U.S. for small and medium size businesses.
A major finding of the research was that businesses want to start or expand exporting, but many lack knowledge about the extensive state and federal resources to help them do so. The project's findings and analysis will be presented at two bi-national conferences in the Blue Water Region and the Twin Saults Region at the end of the year. The conference will bring together economic developers in Michigan and Ontario and scholars from the United States and Canada.
About the MSU Center for Community and Economic Development The CCED mission is to advance MSU's land-grant mission by creating, applying, and disseminating valued knowledge through responsive engagement, strategic partnerships, and collaborative learning. CCED is dedicated to the empowerment of communities in creating sustainable prosperity and an equitable global knowledge economy.
Established in downtown Lansing, Michigan in 1969, CCED, in partnership with public and private organizations, has developed and conducted numerous innovative programs to address local issues while building the capacity of students, scholars, and communities to address future challenges. The CCED focuses its resources on the unique challenges of distressed communities throughout the state of Michigan.
MMTC offers an Export User Group which helps manufacturers evaluate the scope of opportunities and requirements with exporting including how to: develop and map success strategies, establish progress metrics and utilize external resources to support new export efforts. For more information on MMTC's Export User Group, contact us at 888-414-6682 or via email at inquiry@mmtc.org. ###
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