Why Johnny Can’t Export
By William Holstein
You’d think that with U.S deficit in goods and services hitting $725 billion in 2005 that a great debate would be taking place about how to spur American exports.
But hardly a word is spoken, whether out of disinterest or sheer ignorance, it’s hard to tell. But it’s a tragedy because there is so much that needs to be done.
The heart of the issue is small and medium-sized companies, which is precisely the sector of the economy feeling the greatest pinch from global competition. Major multinationals already have achieved global presences and are in much stronger positions.
To be sure, there are some smaller companies that have figured out the international game, but the vast majority have not.
Other countries offer tantalizing clues. German companies organize themselves in industry associations and chambers of commerce that are effective in gathering information about export opportunities and getting it into the hands of members. Japanese companies are organized into keiretsu, or industrial groups. Americans are never going to do that but they could study the Japanese model for more insight on how smaller exporters could “piggyback” on larger multinationals. The Japanese External Trade Organization (JETRO) is also an effective organization for gathering information for Japanese companies.
And of course, U.S. governments could greatly streamline their competing bureaucracies and staff them with experts, not political hacks.
None of this is breathtakingly new. In fact, David J. Richardson once wrote a book entitled, “Sizing up U.S. Export Disincentives.” Year published? 1991. And very little has changed since then.
An export market can be a huge thing for a small biz. If you are in a small town, turning to the larger world for sales may be your best option. But the question from this article is key: who can help you do that?
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