Cities Facilitate Small Business Exports to Build Local Economy

By McFarland, Christiana; Brooks, James | Nation's Cities Weekly, October 26, 2009 | Go to article overview

Cities Facilitate Small Business Exports to Build Local Economy


McFarland, Christiana, Brooks, James, Nation's Cities Weekly


This is the third article in a series focusing on entrepreneurship and small business development. This part focuses on small business export promotion and highlights programs in San Antonio and Colorado Springs, Colo.

Export growth has long been touted as a key to overall economic growth. According to the Export-Import Bank, the official export credit agency of the U.S., in the past 25 years, U.S. exports increased five-fold from $224 billion to more than $1.1 trillion in 2004.

Former Dallas Mayor and current U.S. Trade Representative Ron Kirk noted that export-led growth will be the country's pathway out of the current recession toward a more stable, globally integrated economy and that local governments have an important role to play in promoting and expanding export opportunities, particularly for smaller businesses.

Although smaller businesses account for 97 percent of U.S. merchandise exporters, they represent only about 30 percent of the total export dollar value of U.S. goods, according to figures from the Export-Import Bank. Exporting benefits small businesses by enabling them to grow into new markets, become more competitive, and diversify their portfolios. However, they face serious hurdles to finding and financing foreign export opportunities.

Local governments can provide export assistance to small businesses by serving as information conduits, nurturing an infrastructure for entrepreneurship, and establishing trade relationships.

Information Conduit

A local government acts as information conduit when it provides a central location for information and enables networks of local businesses interested in trade and exporting. The local government does not necessarily need to be the primary source of knowledge, but it does need to know where and how to direct businesses to important resources. These resources may include details about:

* which local players and partners have global connections, such as other businesses, universities, immigrant communities, chambers of commerce and regional and civic organizations;

* where to find specific and highly focused expertise uniquely relevant to international commerce, such as information provided by the state department of commerce and investment, the federal Export Assistance Centers, the Export-Import Bank and the Trade Data Center;

* what general information and financial resources are available from the many agencies within the U.S. Department of Commerce and the Small Business Administration; and

* how dynamic is the existing local-global mix in a particular community, including the percentage of the local economy engaged with or dependent on global trade and investment and the primary countries with which local businesses engage.

Nurturing Entrepreneurs hip Infrastructure

Local governments can also nurture an infrastructure for export-oriented entrepreneurship in their communities by utilizing existing local assets. One of the most practical assets for businesses in any region is the presence of a Free Trade Zone (FTZ). Often associated with a regional airport, warehouse district or light industrial park, free trade zones provide unique cost-savings benefits relating to the importation, manufacturing, assembling or exportation of goods. At present there are 256 general purpose trade zones approved in the U.S.

Local governments can initiate the establishment of a FTZ, often in collaboration with cross-sectoral and cross-governmental partners. For more information or to apply for an FTZ in your community, contact the U.S. Foreign-Trade Zones Board at http:///ia.ita.doc.gov/ ftzpage/.

Other key local resources are business incubators, which are often linked to a university campus. Incubators serve local businesses and represent a great source of home-grown innovation. Students, many of whom have a vested interest in the success of their hometown, have the opportunity to test their ideas and refine their business skills while helping other local businesses better understand the marketplace and turn concepts into commercial products or services.

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Cities Facilitate Small Business Exports to Build Local Economy
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