International approaches | No matter your company's size, failing to consider exporting is a big mistake
All international traders know that 95% of the world’s market exists outside of the United States, so why is it so hard to get our companies to focus on all that untapped market overseas? At a time when the dollar is at such a low exchange rate, making our U.S. goods and services that much cheaper, we should be redoubling our export efforts and strategically planning to develop both traditional and emerging international markets.
Maine has made some great strides in recent years. Although 2009 was a very bad year for international trade worldwide, Maine has increased its exports by 19% over the past five years. It recently achieved the status of the second-fastest state in export growth in the U.S. from 2009 to 2010, with a record $3.15 billion of export sales this past year. Semiconductors and pulp-paper products dominate Maine’s export numbers, representing over $1.66 billion in exports; however, Maine is experiencing more diversity in the types of industries exporting. The bioscience industries, including biotech products and medical devices, continue to grow in their market development, and Maine’s agricultural/natural resource products such as blueberries and seafood have increased their presence in the Asian and Middle Eastern markets. Other emerging areas have also seen considerable growth over the past year. For example, in the advanced materials sector consisting of high-tech fabrics and materials, sales have increased by 92%. Even Maine’s luxury yacht and boat building industries were able to take advantage of the market upturn last year, with a 35% increase in export sales.
Despite our success, we must continue to develop our export industry to remain competitive on a national scale. Maine still lags behind our neighbors in New Hampshire and Vermont in terms of export sales, yet they have very similar populations. Although Maine exports to 172 different countries worldwide, we continue to be very dependent on the Canadian export market, which represents a third of all of our exports. Although this is not unusual for a border state, it is vitally important that we continue to diversify our export markets to be able to quickly adapt to ever-changing market conditions. Additionally, we must continue to develop opportunities to export value-added goods rather than continuing to rely on unprocessed/manufactured commodity products like live lobsters and wood in the rough. We also need to develop in future growth areas such as Brazil, India, China and other emerging markets if we are going to achieve a robust, diverse and sustainable economic base in state.
No excuses
Maine is a state of small and mid-sized businesses. The notion that small businesses cannot become active exporters is nothing more than a fallacy. According to the Washington, D.C., Business Roundtable, 85.8% of Maine’s exporting companies are small or mid-sized, and 181,000 jobs in Maine depend on international trade. Jim Damicis of Policy One Research has noted that too many Maine companies do not develop a strategic plan to develop outside the Maine and northern New England markets. This is very restricting and puts great limitations on a company’s capacity to grow and have stability if there is an economic downturn in the local region. Those companies developing sales and contracts around the world are in a better position to capture the upturn in international sales development and manage the risk of stagnant growth at home. Companies avoiding exploring international opportunities are ultimately shorting themselves of long-term growth.
There are now more resources available for U.S. and Maine exporters than ever. Not only do we have the Maine International Trade Center providing trade assistance, access to overseas markets through trade shows and trade missions and monthly trade education programs, but there is also a plethora of resources available on the Internet. The U.S. Department of Commerce’s Commercial Services produces webinars and export assistance; the U.S. Foreign Agricultural Service helps food companies get established internationally through 130 posts worldwide; and export assistance grants are available to certain industries through organizations such as Foodexport USA and the Softwood Export Council.
Last year, the federal government announced the National Export Initiative, which has an objective of doubling exports in five years. Accordingly, the U.S. Small Business Administration has announced a new small business grant program that will be launched this spring to help small and medium-sized enterprises develop overseas markets. The Export-Import Bank is also producing financing and credit insurance products for all companies. These valuable resources are available to help strengthen exports, and can be a boon to any business. Businesses unsure about where to start can always contact the Maine International Trade Center or the U.S. Department of Commerce Export Assistance Center in Portland for a free consultation.
Janine Bisaillon-Cary, president of the Maine International Trade Center, can be reached at info@mitc.com. Read more Beyond our Borders here.
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