SMB Exporters Get Their Motors Running...
There is a growing conversation online and in business meetings throughout America about increasing exports and thus American Jobs. In all fairness, the business meetings are about growing business and foreign markets have always been on the agenda. The marketplace discussion is being generated by President Obama. As we blogged earlier in the year, Obama brought up export growth as a key driver for the U.S. economic recovery in the State of the Union.
Obama also established a National Export Initiative to “…to improve conditions that directly affect the private sector’s ability to export. The NEI will help meet my Administration’s goal of doubling exports over the next 5 years by working to remove trade barriers abroad, by helping firms — especially small businesses — overcome the hurdles to entering new export markets, by assisting with financing, and in general by pursuing a Government-wide approach to export advocacy abroad, among other steps.”
It’s all about helping small businesses (SMBs) increase exports. That being said, traditionally export booms have not been driven by SMBs. It has traditionally been the very largest exporters that have most driven export growth. As if to reiterate that point the U.S. Census Bureau recently released some U.S. export statistics for 2007 and 2008. Findings were relatively unchanged from prior years:
- SMBs ship only a fraction of the value of U.S. exports.
- SMBs were 97 percent of the number exporting companies in 2008, but accounted for only about a third of the value U.S. exports.
- Large-sized businesses are only 3 percent of all U.S. exporters, but generate almost 70 percent of U.S. export value.
- Large service exporters grew by 1%; but, their export volume grew by over 30%
- SMB’s increased the raw number of exporters by 5% and their value increased by 15%.
This is not a reflection of the National Export Initiative which was established after the time period being measured; but, they do represent a historically consistent benchmark. Generally, while SMB’s represent a large number of exporters; their overall export value is small compared to the Fortune 500 companies. That is now changing
Is this bad news? Not at all. Over the past 15 years there as been a small business retail revolution that has created a global e-commerce boom. The marketplace is presently changing and new tools are now available to growing SMBs to help them drive export growth. The U.S. Census numbers for 2011-14 will look fundamentally different as the long-tail of exporters (that 97 percent that is SMB) gets access to tools like Shipwire product fulfillment that will power an SMB Export Revolution.
Is this export centric thinking just happening in the U.S? No way cowboy! Most major market economies are looking for export growth. Check out this export focus in Australia. More links soon.