Exports: The Upstate’s Key to Global GrowthApril 1, 2015
Around the world, advances in technology and communications are quickly leveling the global economic playing field, and increasing prosperity abroad is driving the demand for high-quality, American-made goods. However, despite the fact that 95% of the world’s consumers live outside of the U.S., and that data indicates that the most profitable U.S. companies are typically those that export, only 5% of U.S. firms currently export—and 58% of those that do sell to only one foreign market, according to the International Trade Administration.
These findings, paired with the projection that nearly 80% of the global economic growth will occur outside of the U.S. over the next five years, have led to the call for action. The ability to access and gain market share in global markets will ultimately determine the sustainability and competitiveness of local firms, including those located here in Upstate South Carolina.
With that understanding, we are proud to introduce the Upstate SC Regional Export Plan. The plan, which assess our region’s current export climate, sets market-based goals for increasing exports and lays out specific strategies for supporting local businesses in increasing exports, is the culmination of a year-long process conducted under the region’s participation in the Global Cities Initiative, a five-year joint project of the Brookings Institution and JPMorgan Chase. Launched in 2012, the Global Cities Initiative helps business and civic leaders grow their metropolitan economies by strengthening international connections and competitiveness.
To address the critical need for growing exports in Upstate South Carolina, the Upstate SC Regional Export Plan Core Team conducted a detailed market assessment, which determined that the facts that support the positive performance of the region’s export climate also mask underlying weaknesses in the existing export system that must be addressed.
STRENGTHS & OPPORTUNITIES
First, looking at the current strengths, the market assessment demonstrated that the region does perform especially well in export intensity, which measures exports as a share of total output. Approximately 22.7% of all outputs in the Upstate are exports which is almost twice the national rate of 11.7%.
We are also particularly strong in jobs supported by Foreign Owned Enterprises (FOEs) at 10.6%, which is also nearly double the national average.
Along with our strengths, the market assessment helped us identify a number of areas of opportunity to grow in exports.
The top industry clusters, including automotive, aerospace, advanced materials, biosciences and energy, represent the Upstate’s best opportunity for world-class competitiveness, but we also can improve upon a lack of service exports, which represent 50% of our regional economy, but only 13% of our export value (compared to 34% nationally).
We also must leverage our existing networks, particularly those that already have access to resources outside of the U.S. Most foreign owned enterprises are already benefiting from exports, but tend to rely on trade within their family network—which may or may not include U.S. based firms. Domestic companies must build their own international networks from the Upstate region outward to be competitive with those FOEs.
Perhaps most importantly, leadership in the Upstate, state of South Carolina and nationally needs to be focused on local and global growth, particularly with issues surrounding trade. Issues such as the Trans-Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (TTIP), currency fluctuations economic downturn in Europe, Mexico’s trade agreements, among others have a significant impact on the economy and it’s critical for leadership to provide support needed for growth.
For example, a study by the Atlantic Council estimates that if a strong TTIP is adopted, South Carolina will be the state that benefits most from the agreement, projecting a 187% increase in state exports. Growth like that would affect our region at every level. We need to ensure that our public officials are championing exports, and in return, we need to build support for their efforts to build bridges around the world for Upstate companies to grow.
Based on our strengths and opportunities, we have developed a number of objectives, with supporting strategies and tactics, and established our ultimate goal of moving the Upstate South Carolina region from one of many players to being a well-recognized global leader in the world economy.
We will achieve this goal by working to successfully achieve objectives focused on enhancing our current export support system, diversifying our export base by driving participation in exports and heightening global awareness about the capabilities of our region.
To be successful in this initiative, we also understand that economic development in the global marketplace is truly a team sport. There is a key role for everyone in our region, from students and teachers to elected officials; utility providers to company decision-makers. Everyone has to contribute.
Contact us to learn how you can be part of the team that will drive the region forward toward stronger global connectivity. Additionally, we will be making presentations across the region on the significance of exporting to our economy. Please contact me if you are interested in having us speak to your group or association.
To read more about the Upstate SC Regional Export Plan, visit https://www.upstatescalliance.com/global-cities/regional-export-plan.
Elizabeth Feather is the Director of Research for Upstate SC Alliance. She is responsible for directing and executing the research efforts for the Upstate SC Alliance team and positioning the organization as the go-to resource for information, which includes compiling data and reports for prospects and investors as well as working with industry partners to provide the most up to date information about the Upstate. Feather is also an integral part of the Upstate’s participation with the Global Cities Exchange.