In 2011, Seattle-based HasOffers was a fast-growing start-up specializing in software to help companies better track their advertising and marketing. Expanding overseas was a natural path for a tech-focused company like HasOffers, but the idea of exporting seemed a daunting prospect, especially for a small company like HasOffers.
According to the U.S. Small Business Administration (SBA), nearly 80 percent of businesses in the United States have fewer than 10 employees, and more than 60 percent have fewer than five. And while the Internet-enabled economy could broaden the export potential for many of these businesses, small businesses’ limited resources make it hard for them to become exporters on their own.
Programs like those offered by Washington State can help small businesses reach a global marketplace. These export promotion programs not only increase profits for a company, but also create jobs, promote domestic investment, and lead to a variety of growth opportunities for a state’s economy.
In Washington State, for example, the population ranks as 13th largest in the country, with just over 2 percent of the national population. However, according to the International Trade Administration (ITA), exports from Washington accounted for approximately five percent of the total U.S. jobs supported. In fact, Washington State calls itself the “most trade dependent state, with trade accounting for 30 percent of jobs created in the past 30 years. Moreover, according to the U.S. Census Bureau, Washington State has increased its export dollar-value by over 50 percent since 2010. Nationally, according to the ITA, exports supported over 11 million jobs in the U.S. in 2013, up from 9.7 million in 2011.
Washington State is admittedly unique in its export capabilities. It touts 75 public deep-water ports, 139 airports, more than 7,000 miles of highways and 3,600 miles of railways available to help move Washington goods out of the country.
But all states – even those that lack the same resources and infrastructure of Washington State – could potentially benefit from launching state export promotion programs to assist small business exporters.
North Dakota’s Trade Office, for example, has helped increase the state-wide dollar-value of exports by nearly 50 percent ($1.2 billion) since 2010 – from $2.5 billion to $3.7 billion. Among its efforts, the office has developed an innovative public-private partnership that brings together state universities, state and federal public resources, and private companies to assist North Dakota businesses in expanding their global reach. As a result, small businesses in North Dakota account for over 80 percent of the state’s exporters and over a third of export value.
State export promotion programs can be valuable to small businesses that might lack the resources or the know-how to expand overseas on their own. For example, state export promotion programs can provide expert market research so that companies have the confidence that they’re going in with their eyes open. State can also host trade delegations, arrange meetings, and provide other types of “concierge” style services to help alleviate the burden on a small business inexperienced in international dealings.
Strong state export promotion programs are both an essential part of a successful U.S. export promotion agenda and a valuable complement to broader export promotion programs at the federal level. By providing potential exporters the means to increase their reach outside of the U.S., and in turn supporting foreign buyers in their endeavors to purchase American goods, states can help grow their own local businesses as well as the economy as a whole.
Matt Carew is a recent graduate of George Mason University with a Master’s in International Commerce and Policy.