Greater Philadelphia Metro Export Plan Export Support Ecosystem Working Group

Transcription

1 Greater Philadelphia Metro Export Plan Export Support Ecosystem Working Group Friday, November 6, 2015, 10:00 to 11:30 am Economy League of Greater Philadelphia 230 South Broad Street, Suite 403, Philadelphia Strategy: Strengthen and enhance coordination within Greater Philadelphia s export support ecosystem Meeting Agenda o Welcome & Introductions o Working Group Charge o Advancing the Export Support Ecosystem Strategy Review and Discussion of Proposed Tactic Actions, Roles, Resources

2 Export Support Ecosystem Working Group November 6, 2015, 10:00-11:30am Economy League of Greater Philadelphia 230 South Broad Street, Suite 403, Philadelphia Meeting Materials Export Support Ecosystem Working Group Meeting Agenda Page 1 Export Support Ecosystem Working Group Memo Page 3 Greater Philadelphia Metro Export Plan Elements Page 11 Excerpt from Los Angeles Regional Export Plan Page 12 Excerpt from Greater Portland Export Initiative Business Plan Page 17 Minneapolis-Saint Paul s Export Training Program Menu Page 21 Milwaukee s Export Strategy Executive Summary Page 23 2

3 MEMORANDUM DATE: November 5, 2015 TO: Greater Philadelphia Metro Export Plan Export Support Ecosystem Working Group FROM: Josh Sevin, Managing Director for Regional Engagement, Economy League RE: Strengthening and enhancing coordination within Greater Philadelphia s export support ecosystem This memorandum lays out the charge of the Greater Philadelphia Metro Export Plan Export Support Ecosystem Working Group and presents a proposed central tactic and implementation considerations for discussion at the working group s two meetings. As a straw man document, it is intended to spur reactions and suggestions about key items for inclusion in our metro export plan. Strengthening and enhancing coordination within Greater Philadelphia s export support ecosystem has been identified as one of three priority strategies that we will focus on to accelerate regional growth via a dynamic export economy. This working group will spend its first meeting on Friday discussing promising approaches to advance this strategy. During our second meeting on December 1 st, we will further refine details for this strategy, including specific tasks, roles and responsibilities, and resources for implementation. These efforts will help develop critical pieces of the export growth plan for review by the Greater Philadelphia Metro Export Plan Steering Committee at its December meeting. METRO EXPORT PLAN ELEMENTS AND STRATEGIES The Greater Philadelphia Metro Export Plan will be a 16-to-24 page document that makes a compelling case for exports as a driver of our region s long-run economic success and provides a guide for how to achieve stated export growth goals and objectives. It will be a vehicle for educating a wide range of audiences about the exports opportunity and how our region plans to take advantage of it. Our plan will present an explanation of why exporting is critical to the region s competitiveness, key findings from the market assessment, goal and objectives, strategies and tactics, performance metrics to gauge progress, and an implementation plan summary. (Background on preparing a metro export plan and examples of other regions plans are available at the Global Cities Initiative s website at 3

4 Drawing upon the market assessment results and metro export initiative efforts to date, the Greater Philadelphia Metro Export Plan Core Team has drafted several plan elements, including key findings and plan goal and objectives. A summary of current draft plan elements is included in the meeting materials on page 11. The metro export plan should be viewed as similar to an effective business plan for an organization. It will not aim to address every opportunity or cite every possible strategy that could be employed to achieve regional export objectives, but instead will present three or four priority strategies with clear action steps and commitment toward implementation. At the Greater Philadelphia Metro Export Plan Steering Committee s October meeting, the group reviewed three proposed strategies for refinement and inclusion in the plan: 1) Building Export Awareness and Capacity among the Region s SMEs; 2) Catalyzing Export Growth for Priority Clusters; and 3) Strengthening and Enhancing Coordination within Greater Philadelphia s Export Support Ecosystem These strategies represent approaches that the Greater Philadelphia Metro Export Plan Core Team thinks will best drive the region towards achievement of the plan s overarching objectives of boosting the region s export intensity, increasing the number of new exporting firms, and elevating exports as a top-of-mind economic development priority. They focus on core opportunities and needs that emerged from our market assessment findings: limited awareness of export opportunities or services among small- and medium-sized enterprises (SMEs) in the region, the existence of regional export industry cluster strengths, and the potential for greater collaboration and coordination among export service providers and economic development leaders. These three strategies will be accompanied in the metro export plan by a set of tactics that lay out what specific actions the region will undertake to execute each strategy. Specific quantitative and qualitative outcome and output indicators will be tracked in conjunction with plan strategies and tactics. Working groups have been established to identify priority tactics and implementation items for each strategy. STRENGTHENING AND ENHANCING COORDINATION WITHIN GREATER PHILADELPHIA S EXPORT SUPPORT ECOSYSTEM The quality and range of export assistance provided to firms in the region is strong. Leading export support and business development players include public agencies such as the US Commercial Service, US Small Business Administration, Pennsylvania Office of International Business Development, New Jersey and Delaware Departments of State, and local economic development agencies, as well as nonprofits including the World Trade Centers of Greater Philadelphia and Delaware, DVIRC, and small business development centers, among many others. However, market assessment interviews indicated that export service providers and economic development organizations could generate greater impact by collectively developing a more seamless set of information and services. Although there is cooperation among top service providers, it remains informal and opportunities exist to identify and address gaps in service provision and better leverage 4

5 successful efforts. Such an approach is all the more important in light of limited regional resources to support export growth. The primary initial tactic recommended by the Core Team to strengthen the region s export support ecosystem is convening an international trade and investment alliance. This approach will build upon the widespread engagement and excitement generated in developing a metro export plan for Greater Philadelphia and play a critical role in driving implementation of plan strategies, tactics, and actions. The alliance could perform a variety of different functions, including identifying opportunities for increased alignment of efforts (e.g., coordinating follow-up from trade missions), advocacy (e.g., support for state export assistance budgets), and oversight of metro export plan implementation, including ongoing awareness-raising about the importance of trade and investment to the region s economy. It would also provide an important consistent forum to strengthen relationships among international business and economic development leaders while cultivating a broader set of business, civic, and elected official champions for regional export growth. Several regions that have completed metro export plans in conjunction with the Global Cities Initiative have set out to establish export or broader international business coalitions to take on a range of different activities. (See pages in the meeting materials for examples of how this strategy fits into Los Angeles and Portland s plans.) Other metros have measured progress with this approach by tracking implementation of metro export plan strategies and tactics; advocacy successes; number of alliance participants; and sustained participation in alliance meetings and efforts. The remainder of this memo lays out potential implementation approaches around the formation of a Greater Philadelphia Global Trade and Investment Alliance and concludes with questions for consideration by the working group. GREATER PHILADELPHIA GLOBAL TRADE AND INVESTMENT ALLIANCE At the Greater Philadelphia Metro Export Plan Steering Committee s October meeting, the Core Team posed four initial questions regarding a global trade and investment alliance: 1) What is the alliance s charge? 2) How can we structure and focus the alliance to ensure value and ongoing participation for key stakeholders? 3) How formal should the alliance be? How frequently should it meet? 4) How much resources will be required to manage the alliance and from where would any additional funding be raised? Below are preliminary straw man thoughts on the alliance s charge, its focus, its structure, the value proposition for participants, and required resources for implementation. CHARGE The initial charge of the Greater Philadelphia Global Trade and Investment Alliance will be to advance the stated goal, objectives, and strategies of the metro export plan, with a particular focus on 5

6 strengthening and enhancing coordination within the region s export support ecosystem. In recognition of the close relationship between boosting trade and foreign direct investment in the region and the opportunity to engage a broader stakeholder and leadership community, it is proposed that the alliance focuses on both trade and investment. Our region has the opportunity to complete a foreign direct investment plan with support from the Global Cities Initiative during 2016 that could provide a complementary set of goals, objectives, strategies, and tactics to increase FDI in Greater Philadelphia. The alliance would then have a solid framework for coordinated and mutually reinforcing export and FDI growth initiatives to focus on and support. Even if regional leaders choose not to move forward with developing an FDI plan, an alliance focused solely on export growth would still be well worth pursuing and has been an approach adopted by other metros. FOCUS The alliance can deliver on its charge of advancing the metro export plan and enhancing coordination within the region s export support ecosystem by engaging in a range of different efforts. Especially as it launches, the alliance will need to prioritize among the following potential activities: Developing shared resources and messaging The region s export assistance and economic development service providers do not operate under a system that is wholly clear to potential exporting firms and clients and sometimes to the providers themselves. As a result, many firms report that they find it challenging to navigate the business services ecosystem and to get the right assistance when and where they need it. The metro export plan effort provides a strong head start in developing clear and standardized messaging about export growth opportunities and resources. The Core Team has committed to developing a consolidated, easy-to-use map of export assistance resources for the plan s release in April. (See page 21 for an example of an export road map and resources document produced for Minneapolis- St. Paul.) The alliance can oversee the development and distribution of such resources across export service providers and economic development organizations, as well as a broader network of key organizations and businesses that have trusted relationships with smalland medium-sized enterprises (SMEs) in the area, such as chambers of commerce and for-profit service providers including banks, law, accounting, and logistics firms. This latter approach is being prioritized and pursued under our metro export plan strategy to build export awareness and capacity among SMEs. (See page 23 for an SME engagement document distributed broadly in Greater Milwaukee.) Several alliance efforts in other GCI metros have developed new one-stop websites with expanded and easy-to-access information to promote and support export activity. We will need to decide whether such an investment would be strategic given existing websites and resources in our region. Increasing alignment across international trade and economic development service providers In light of limited export support resources, an opportunity exists to get more out of existing export assistance and business development efforts by finding ways for support organizations to play to their strengths and reduce duplication of efforts. One example is around trade missions both in planning them and in fostering strategic, sustained coordination following these 6

7 business development and relationship-building trips to maximize impact, especially across state and local governments and election cycles. Aligning target market and trade mission efforts has been a successful focus of alliances in other GCI metros. Other areas of opportunity for increased collaboration cited in the market assessment include reducing overlap in client targeting and tightening gaps in referral networks. Advocacy The Greater Philadelphia metro export plan will be accompanied by a policy memo that outlines an advocacy agenda for changes at the federal and state levels that will foster a stronger environment for global trade. The alliance can identify, prioritize, and work with partners to advance strategic items within the region s international trade and investment advocacy agenda a role that currently lacks sustained leadership in our region. Overseeing metro export plan implementation A core function of global trade and investment alliances in other regions has been to monitor and oversee implementation of their export growth plan. By revisiting progress on the export plan s and possibly a future FDI plan s goals, objectives, strategies, and tactics, the alliance can maintain focus on critical regional business growth priorities and make adjustments as regional conditions, challenges, and opportunities change. The alliance could provide a more direct oversight role around the proposed regional media and partnership messaging campaign about the region s export economy and export success stories. As plan implementation progresses, the alliance can lead next-phase strategy development efforts following successful completion of initial plan action items. Research/market intelligence Following the significant one-time investment in research and analysis undertaken this past year for the Greater Philadelphia export market assessment, the alliance could develop, oversee, and share ongoing research about strategic export opportunities and markets for direct use by area firms and economic development stakeholders and to inform additional trade and investment strategy. Grant writing The development of the Greater Philadelphia metro export plan positions our region for additional investments to boost global trade. The alliance could take on responsibility to seek out grant and other investment opportunities and to lead collaborative grant applications to advance strategies and tactics laid out in the export plan. STRUCTURE While informal collaboration and alignment has occurred across key export support ecosystem players, it has been sporadic. Establishing a more formal network with specified goals, consistent meetings, and adequate resources will build upon prior collaborative success and help maximize implementation of our export plan. It is proposed that the alliance be comprised of senior international trade and economic development officials from across the tri-state region. This will include executives from area export 7

8 service providers; local, state, and federal economic development agencies; regional and international chambers of commerce; Select Greater Philadelphia; the Economy League; small business development corporations; and the region s ports, among many others. A small management team of no more than five individuals will meet monthly to provide oversight and set the alliance s agenda, and the full alliance will meet quarterly. The alliance s efforts will be leveraged and amplified by a leadership council comprised of top regional business, civic, and elected official leaders that will serve as champions for international trade and investment in the region and assist with targeted advocacy efforts. Establishing and maintaining active leadership council membership will require engagement and education around ongoing global business growth efforts via annual or bi-annual meetings. The Economy League of Greater Philadelphia is willing to consider incubating the alliance in its pilot stage. The strategy, convening, and leadership engagement skills required of managing the alliance are among the Economy League s core competencies, and it is highly invested in ensuring successful implementation of the metro export plan. The Economy League would serve as a neutral convening party with no direct export support assistance role within the region. It also has a track record of incubating broad-based regional collaborative efforts, such as the formation and development of the Knowledge Industry Partnership, which was managed by the Economy League for three years before the partnership s efforts consolidated into Campus Philly a national model program for engaging and retaining college students. VALUE PROPOSITION The success of the alliance will depend upon the active participation of busy regional leaders, requiring a clear value proposition for alliance members beyond serving the greater good for our region. Many of the potential alliance activities listed above would be of direct benefit to participants and their organizations via the development of shared resources, more efficient provision of services, communications investments, advocacy efforts, and grants secured. In addition to these benefits, alliance meetings will be structured to maximize networking opportunities that result in greater collaborations and program alignment. Realizing this value proposition will require skilled management and facilitation of the alliance to ensure motivation among a broad set of key stakeholders, selection of strategic initiatives for the alliance to pursue, and establishing and building upon early successes. RESOURCES There will be limited success in advancing any or several of the potential alliance activities listed above without adequate dedicated resources. A two- or three-year pilot initiative to develop the alliance and position it for sustained operations is proposed. The budget for staffing and program costs will depend upon the scope of the alliance s initial activities, and the Economy League will develop a rough proposal for the working group s next meeting. A combination of member contributions, public sector grants, and corporate philanthropy will be proposed to attain this pilot initiative budget. 8

9 POLICY RECOMMENDATIONS We will highlight export growth priorities that require change at the federal or state level in a policy memo that accompanies our metro export plan. This approach will help bring together a shared policy agenda to foster an environment that enables the Greater Philadelphia export plan to succeed. Many GCI metros that have developed such memos have reported that they have been among the most frequently used and helpful products of the metro export planning process, facilitating engagement of public and private sector leaders around policy priorities. As mentioned above, a core activity of the alliance could be to identify, prioritize, and advance coordinated advocacy efforts in support of global trade and investment. Some items initially under consideration for inclusion in Greater Philadelphia s export policy memo include: Sustaining and expanding support for export service provider capacity; Investing in Greater Philadelphia as an energy hub to help drive future export growth; Increasing airport capacity and direct international flights; and Improving metro-level export data In addition to these Philadelphia-specific priorities, the memo can point to and the alliance can advocate around federal policies and investments of shared interest across metros, including free trade agreements, fair trade practices, intellectual property protection, export compliance and regulation, export finance, overseas staffing/resources, and customs clearance, among many others. QUESTIONS FOR CONSIDERATION For our discussion at Friday s meeting, please consider the following questions: What export support ecosystem coordination efforts already exist in our region? Which have been successful and why? What efforts should we be looking at in other metros? What are the important current gaps and/or alignment opportunities that we should address within our export support ecosystem? Are there other tactics that we should be considering to advance this strategy in addition to or instead of the proposed alliance approach? Is there revised framing/language that we should use to describe this strategy, its associated tactic, or actions? What business, economic development, and industry experts should we speak with to better understand opportunities and develop our implementation plan for this strategy? 9

10 Regarding the proposed Greater Philadelphia Global Trade and Investment Alliance, we will consider the following questions over the remainder of the group s two meetings: Among potential activities for the alliance developing shared resources and messaging; increasing alignment across trade and economic development service providers; advocacy; overseeing export plan implementation; research; grant writing which should it focus on? If you could select no more than three of these activities for the alliance to pursue, which would you choose? Which organizations/leaders (in addition to those listed on page 7) should participate and play roles in the alliance? What kind of additional resources will be required for implementation? How/where can we raise them? What are the best metrics to gauge progress on this strategy? What policy recommendations should be included in our policy memo? 10

11 Greater Philadelphia Metro Export Plan Elements RATIONALE (Why are we doing a metro export plan?) Persistently slow job growth has prompted Greater Philadelphia to focus on global business and export strategies to expand its economy. KEY FINDINGS (What did the market assessment tell us?) 1) Greater Philadelphia s export economy is large and diverse, but its growth has been slow relative to other metros. 2) Despite an overall decline in manufacturing, the region has maintained a competitive advantage in several specialized goods-producing industries, including precision instruments, aircraft products and parts, and medical equipment and supplies. 3) Greater Philadelphia has experienced recent export growth in leading service sectors, including research and development, higher education, and software/it, with potential for further expansion. 4) Many small- and mid-sized companies have limited awareness of their global growth potential or of existing export services. 5) Greater Philadelphia has a comprehensive export support ecosystem, but some gaps and weak links exist. GOAL (What do we hope to ultimately accomplish?) Accelerate regional job and revenue growth via a dynamic export economy OBJECTIVES (What measurable outcomes will we achieve?) Increase Greater Philadelphia s export intensity to match or exceed the average for the top 100 US metros within five years Increase the number of identified new exporting firms in the region by 10 percent within five years Elevate exports as a top-of-mind economic development priority among regional leaders within three years STRATEGIES (What will we do to achieve these objectives?) Catalyze export growth for priority clusters Build export awareness and capacity among the region s SMEs Strengthen and enhance coordination within Greater Philadelphia s export support ecosystem 11

12 l o s a n g e l e s r e g i o n a l E x p o r t P l a n M e t r o E x p o r t I n i t i a t i v e 12

13 T h r e e C o r e S t r at e g i e s To drive towards achievement of the three objectives, the Export Plan puts forth three core strategies: Establish the Los Angeles Regional Export Council Target High Opportunity Market Segments Market the Los Angeles Region to the World BROOKINGS Metropolitan POLICY program S t r at e g y 1 : E s ta b l i s h t h e L o s A n g e l e s R e g i o n a l E x p o r t C o u n c i l Establish the Los Angeles Regional Export Council (LARExC) to best ensure a unified, sustainable, regional export effort over at least the next decade. LARExC will do this by coordinating existing export services and providers into a responsive regional export network; developing and maintaining critical export research, information and a regional export website; and supplementing existing programs with critical new support. Through its associated Export Champions program, this concept will also include a proactive promotion plus program that actively seeks out, recruits and supports SME manufacturers of high value added products that demonstrate strong export potential (see Proposed New Export Programs below for more detail). S t r at e g y 2 : Ta r g e t H i g h - O p p o r t u n i t y M a r k e t S e g m e n t s Strategy 2 places focus on the areas of greatest export opportunity related to companies, industries and global geography. It stresses the need to target and focus, especially given the current resourceconstrained environment. The market assessment revealed that the majority of companies entering the export services system in the Los Angeles region are not export ready. This creates a bottleneck for export services providers that inhibits their ability to focus limited resources on those sectors and companies that offer the greatest potential to export. The assessment also revealed that a very high percentage of exports and growth in the Los Angeles region comes from companies in a core group of local industries and are consumed by end users in a core set of foreign markets. Core tactics for this strategy are: ➊ Focus on Export Ready Companies: Focus on export ready firms, defined as export active and export capable. As opposed to promoting exports broadly, this effort will focus on proactively identifying high potential companies and supporting them throughout the process. The goal is to turn export capability into export commitment. Those companies entering the export system that are not ready to export will be referred to an early export training program or other appropriate services provider. ➋ Target Twelve Export Industries: Focus proactive marketing efforts on 12 select industry targets in both goods and services sectors; 10 of which represent over 77 percent of the Los Angeles region s total exports and 90 percent of export growth from 2003 to These high value targets include: aerospace and subcontractors; computers and electronics; energy and 8 13

14 P R O P O S E D N E w e x p o r t P r o g r a m s E x i s t i n g E x p o r t P r o g r a m a n d S e r v i c e s P r o v i d e r s The Los Angeles region is rich with export and trade related programs and services. The federal government has a major presence in the region including U.S. Commercial Services, U.S. Small Business Administration, and the Export-Import Bank. The region also has a broad set of players related to logistics (the ports of Los Angeles and Long Beach and Los Angeles World Airports), global trade forums (Asia-Pacific Business Outlook conference at USC and the Americas Business Forum at UCLA), regional development and international trade (Los Angeles Area Chamber of Commerce, Los Angeles County Economic Development Corporation, World Trade Center, public-private partnerships, and a broad array of Los Angeles-foreign nation trade organizations), and basic export training (Centers for International Trade Development and Trade Connect). Given the relatively large number of export support organizations, one would expect a strong systematic export growth record for SME s. The reality, however, points to a series of six high-level issues that significantly inhibit the current system s export effectiveness: 1) existing programs tend to be somewhat fragmented and disconnected, with varying missions, goals, sources of funding, and performance metrics; 2) each organization is faced with significant resource constraints; 3)There is a lack of clarity in program accessibility (who to go to for what and/or do programs even exist; e.g., small business export financing); 4) there are gaps in the existing set of programs, including research and information sharing; 5) the state of California has basically no international trade agency; and 6) the great majority of these export service providers do not have enough experienced professionals to effectively counsel exporters in matters related to global trade. Addressing these issues will be an important part of the Los Angeles Export Plan s activities, beginning with a set of proposed new export programs. BROOKINGS Metropolitan POLICY program

15 L A R E x C - T h e L o s A n g e l e s R e g i o n a l E x p o r t C o u n c i l LARExC (see Strategy 1) is being established to directly address the fragmentation and gap issue with its core roles being to tie all federal, state, and local programs together into a responsive and flexible regional network; fill critical gaps in the comprehensive export system; and better leverage the network to generate a larger, more consistent pipeline of export ready companies. It was determined early on in the process that Los Angeles does not need to create a large new independent organization to lead the export effort or that recreates existing functions. Instead there is a need to establish a regional identity for existing export services; tie this wide variety of players together to act as one cohesive, regional team; and ensure the core elements of the export plan are implemented, supported, and measured. LARExC will serve as the home for three new efforts that support its export growth and network support mission: steer companies, for example, to niche agencies or individuals with expertise in trade related to a specific country, industry, or opportunity. Each partner in the framework will be armed with a set of basic questions and guidelines that will help clarify the stage in the export process for each new company and where the company should be referred. Regional Export Market Research and Coordination: A new regional export market research and coordination function will be established within LARExC to organize and assemble data in support of the regional web portal; produce and assemble profiles and reports related to regional industry and country targets; stay on top of activities and changes related to each partner in LARExC; monitor and measure regional and company export performance; coordinate quarterly partner/board meetings; and ensure the regional export effort is effectively leveraging (and coordinating with) complementary trade and international efforts (such as trade missions). Los Angeles Export Framework: LARExC and the Los Angeles export effort will be anchored and supported by an export team framework or roadmap that clarifies the roles of each export services provider; how each of these independent agencies fits into a comprehensive, cohesive regional export network; and who companies should be referred to at each stage in the export process. Initial development of the framework will involve assembly of the full list of regional export services providers and programs, including the mission, roles, capabilities, resources, funding sources, and performance metrics of each. This agency information will be combined with the experience of current export services providers to create a straightforward framework and referral system. The framework should make it clear, for example, that New-to-Export (NTE) companies seeking basic and early export information should be referred to one of the core export training seminars produced by CITD, SBA and/or Trade Connect. More experienced New-to-Market (NTM) companies may be directed to the USEAC for more in-depth case management and planning. The framework would also be able to Regional Export Web Portal: A Los Angeles Region Exports website will be developed and maintained within LARExC to serve as a one-stop, regional resource for companies seeking information about the regional export framework and who to go to; to serve as a regional clearinghouse for existing export data, information, reports and event calendars; provide links to all critical federal, state, local and private export-related websites; and to provide up-to-date regional data on export performance, activities and success stories. This website will be coordinated with the new national export website being created by the Department of Commerce. METRO export INITIATIVE Los Angeles Regional EXPORT PLAN 1151

16 LARExC will be led by a board of directors representing the core export services providers in the region, have a staff of two (executive director and researcher/coordinator), a private-sector advisory board, and initially house its administrative operations within the Los Angeles Area Chamber of Commerce. This will offer LARExC a physical home and a place to incubate as it establishes a regional presence, secures funding and proves its value. LARExC will incorporate as an independent notfor-profit organization and its set of programs and services will be funded with $500,000 per year for an initial five-year period through cash and in-kind contributions from key local partners, newly pursued and secured federal/state government grant seed money, and private-sector matching funds. The initial geographic focus of LARExC and the export plan is Los Angeles County (with a population of 9 million), to prove the concept and start with a manageable base of export services providers and companies. However, it is envisioned that LARExC and the overall export network effort will evolve in coming years to include the broader Greater Los Angeles region (Los Angeles CMSA), and perhaps all of Southern California. The initial board of directors will include the Office of the Mayor, Los Angeles; the Port of Los Angeles; Los Angeles World Airports; UCLA Anderson CIBER; USC Marshall CIBER; Los Angeles Area Chamber of Commerce; and California International Trade Development (CITD). LARExC will work to closely align and coordinate all local export efforts in the regional network (including those organizations on the board, plus other proven trade organization and program partners) with those of its federal partners, including U.S. Commercial Services, Ex-Im Bank, and the Small Business Administration (SBA). E x p o r t C h a m p i o n s The Export Champions program, developed by UCLA and the Los Angeles Area Chamber, will connect partnering companies within regional target industries to tailored export services and training, using a field study/export business plan approach. This proactive effort to identify, reach out, and partner with companies with high export potential will fill a critical gap in the current export services system. MBA research teams of four to five students will be assigned for up to one academic year to each company to increase the pipeline of export ready companies through market research, market entry strategies, and development and execution of export business plans. MBA teams from UCLA Anderson, USC Marshall and other cooperating executive MBA programs will work with both NTE and NTM companies. They will act as resident export champions with the aim of opening up new country markets for existing exporters and institutionalizing export strategies in the participating companies. The Export Champions program has already begun the process of identifying and targeting up to 15 companies to partner with during year one, largely focused on SMEs within the 12 identified industry targets that produce high value added products. However, the program will remain flexible and open to other unique opportunities that offer high potential for success or that may contribute to the overall objectives of the program. Export Champions has received a State Trade and Export Promotion Grant award from the U.S. SBA for its first year of operations, with potential to secure more funding in years two and three. BROOKINGS Metropolitan POLICY program

17 17

18 18

19 19

20 20

21 MINNEAPOLIS-SAINT PAUL EXPORT TRAINING PROGRAM MENU EXPORT EDUCATION RESOURCES STATE Minnesota Trade Office MTO Minnesota Department of Agriculture MDA Center for International Business Education and Research CIBER (University of Minnesota) Midwest Global Trade Association MGTA FEDERAL U.S. Commercial Service Minnesota USCS U.S. Small Business Administration SBA Export-Import Bank of the United States EXIM MENU OF EXPORT SERVICES BASICS OF EXPORTING PREPARING AN EXPORT PLAN AND COACHING EXPORT COMPLIANCE AND LOGISTICS» Export Process: An Introduction to Exporting (MTO)» International Market Research (MTO)» International Trade Resources (MTO)» Export by Design (comprehensive plan development with coaching by MTO)» Export Plan Light (condensed plan development MTO)» An Export Transaction: From the Order to Out the Door (MTO & MGTA)» Export Management System (MTO & MGTA)» NAFTA: Completing the Certificate of Origin (MTO)» CE Marking (MTO)» Incoterms (MGTA) INTERNATIONAL FINANCE AND PAYMENT LEGAL ASSISTANCE FOOD AND AGRICULTURAL PRODUCTS» Export Finance and Methods of Payment (SBA, EXIM Bank)» STEP Grant (MTO) Export assistance/grants for eligible SME s» Consulting by the Export Legal Assistance Network (ELAN) for New to Export Companies Food Export Advisor Program (MDA and Food Export-Midwest)» Exporting 101 for Food/Ag Companies (MDA) INTERNATIONAL SALES AND MARKETING STATE TRADE EXPORT PROMOTION INTERNATIONAL BUSINESS CULTURE AND ETIQUETTE COUNTRY MARKET AND SECTOR EVENTS (MTO)» Finding and Motivating the Right Foreign Business Partner (MTO)» International Market Research (MTO)» Global Road Warrior (access through MTO) Executive Planet Culture Grams (access via public library system) Geert-Hofstede China Practicum» India Practicum» Latin America Breakfast Series» Middle East/Africa Roundtables» Water Roundtable» Environment Roundtable This Menu identifies core export training programs and is not a comprehensive list of events. Please visit the MTO Calendar of Events for more information: 21

22 MINNESOTA EXPORT RESOURCES GETTING STARTED (COMPANIES NEW TO EXPORTING) Minnesota SCORE» Free One-on-One business planning assistance from volunteer experts. Minneapolis: Tel: (952) St. Paul: Tel: (651) South Metro: Tel: (952) Small Business Development Center (St. Thomas Twin Cities)» The Small Business Development Center matches small businesses currently in operation with experienced consultants who provide these services: business planning, market research, financial planning and analysis, debt and equity financing, new product development, and other aspects of business development. No charges to the client. Tel: (651) EXPORT EDUCATION Metro calendar of export events EXPORT QUESTIONS AND INFORMATION Minnesota Trade Office» This office offers companies the information, skills, resources, and contacts they need to successfully export goods and services worldwide. The STEP program provides financial and technical assistance to qualifying Minnesota small businesses interested in exporting products or services to foreign markets. Tel: (651) U.S. Commercial Service Minnesota» The U.S. Commercial Service is the local federal government office with a global network that provides customized solutions that enable Minnesota companies to sell U.S. made products and services internationally. The U.S. Commercial Service provides trade counseling, market intelligence, business matchmaking and commercial diplomacy by leveraging our global network and proven trade expertise to meet companies exporting needs. Tel: (612) Minnesota Department of Agriculture» The Minnesota Department of Agriculture works to discover and develop potential markets for Minnesota s farmers and agribusinesses. We provide assistance to individuals and businesses in evaluating foreign market entry methods, understanding and obtaining regulatory requirements, finding qualified buyers, understanding logistics, and locating financing options and market promotion funds. Christina Connelly Tel: (651) EXPORT FINANCING Export-Import Bank of the United States» The Export-Import Bank is an excellent resource for small businesses interested in entering foreign markets. The Export-Import Bank provides small businesses with export credit insurance, working capital loan guarantees, and foreign buyer financing. Denis Griffin Tel: (612) Small Business Administration Office of International Trade: Minnesota District» The SBA offers Trade Finance Programs that assist small exporters in obtaining: loans to finance general export expenses, lines of credit to finance the cost of filling foreign purchase orders, lines of credit to finance export accounts receivable and export inventory, term loans to purchase equipment and land (in the U.S.) to support export sales. Carlos Sosa Tel: (612)

23 GLOBAL CITIES INITIATIVE Export Strategy EXECUTIVE SUMMARY 1 2 WIIFM What s in it for me? To export or not to export? That is the question. Here are six extraordinary reasons why companies who can export should do so... and should do so strategically, not serendipitously. EXPORTERS ENJOY HIGHER REVENUES Companies that export get bigger faster. On average, revenues for exporters are more than twice as much as nonexporters. 1 FASTER GROWTH Selling to multiple markets makes companies more resilient and they grow faster than non-exporters. 2 $1.5M Non Exporter ANNUAL REVENUES Small/Mid-sized Enterprises (SME) in 2009 Non Exporter -7% $3.8M Exporter 37% Exporter COMPANY GROWTH RATE EXPORTING SPURS INNOVATION Many companies become more competitive after they begin exporting. Within two years of exporting, companies file seven times the number of patents and deliver four times the number of new products as compared to peers who do not export. 3 As employees travel, they are exposed to more new knowledge, which the employees then turn into new ideas and products. MORE PRODUCTIVITY PER EMPLOYEE Employees of exporting companies appear to be far better at generating revenue. In 2009, exporters generated 72% more revenue per employee than non-exporters. 4 REVENUES PER EMPLOYEE 2009 STRONGER LABOR POOL In addition to higher revenues per employee, exporters tend to enjoy higher margins on exported goods. This in turn allows exporters to pay their workers better than non-exporters and thereby gain access to a stronger labor pool. 5X 4X HIGHER VALUATION By selling into multiple economies exporters reduce their market risk. With lower market risk and stronger margins they tend to enjoy higher valuation multiples. Consider two similar companies with identical revenues, however, one exports while the other doesn t. The exporter enjoys higher margins that yield a higher EBITDA. When the higher multiple is applied to the higher EBITDA, then the relative valuation of the company goes up significantly. $5M Revenue Product Innovation Patents Non Exporter THE MULTIPLE Market risk is lower for the Exporter EBITDA 1 $1M 1 Non Exporter $4M Valuation 7 COMPETITIVE ADVANTAGE FOR EXPORTERS Two years after beginning to export $163,000 Non Exporter Exporter $5M Revenue 4 Exporter $281,000 Exporter EBITDA $1.2 Non Exporter Exporter In Millions $6M Valuation 1 Small and Medium-Sized Enterprises: Characteristics and Performance, United States International Trade Commission, Publication 4189, November 2010, Washington, DC,xii 2 Ibid. 3 Salomon, R. M. and Shaver, J. M. (2005), Learning by Exporting: New Insights from Examining Firm Innovation. Journal of Economics & Management Strategy, 14: doi: /j x 4 Ibid. (Data for manufacturing SMEs are from the Commission s questionnaire; data on services SMEs are from Census.) 23 PUBLISHED JANUARY 2015

24 WIIFU (What s in it for us?) Exports matter to the Milwaukee Region The Milwaukee region (M7), consisting of Kenosha, Milwaukee, Ozaukee, Racine, Walworth, Washington, and Waukesha counties, boasts a rich history of innovation and exporting: the hallmarks of economic success. It is also a region where cooperation among companies, industry associations, governments, education institutions, social organizations and economic development organizations is treasured. The M7 region is one of America s top manufacturing centers. Exports over the past decade have become crucial to sustaining economic health in the region and today manufactured goods account for 82% of total exports. From 2003 to 2012, the seven-county region saw a flat economy producing just under $100 Billion in output with a workforce of nearly one million people. 1 COMPETITIVENESS IS THE MAINSTAY For the region as a whole, from , domestic GDP declined 6% while the nation s total domestic GDP grew (1.8% annually). Across most industries in the M7 region, domestic GDP growth has fallen below the national average over the past decade. 1 This is an indicator of a shortfall in the region s competitiveness. SHARE OF GLOBAL GDP 81.4% 83.8% 78.9% 72.7% NON-U.S. SHARE 27.3% 21.1% 18.6% 16.2% U.S. SHARE A decline in domestic output is offset by STRONG EXPORT GROWTH $10,528M $15,308M $85,529M $80,690M *Brookings Export Nation, 2012 Today, the region is at an economic crossroads. Rebuilding market share is the key economic imperative for the region. In a global economy it is critical that tradable industries in the region be competitive both domestically and internationally or they ll fail to thrive against the global competition. As part of that strategy, exports will play the key role of providing early stage growth into the economy. The good news for M7 is that the export opportunity is substantial. A GLOBAL CUSTOMER OPPORTUNITY Over the past few decades there has been a significant shift in market opportunity, away from domestic sales and toward international sales. The biggest opportunity is to tap aggressively into that non-u.s.a. market. Exports Non Exports OPPORTUNITY FOR MORE BALANCE Canada and Mexico represent 40% of Milwaukee 7 s current exports. This is a typical pattern for metropolitan regions in the U.S. Combined, Canada and Mexico account for just 4.2% of global GDP. This disproportion suggests the region has significant export growth opportunities beyond Canada and Mexico. MORE COUNTRIES In surveying regional companies, on average, they export to only a handful of countries. An obvious strategy is to increase the number of countries to which regional companies export. M7 REGION 50% of companies export less than $1M to an average of 3 markets 25% of companies export $1M-$100M to an average of 5 markets 25% of companies export more than $100M to an average of 8 markets ENGAGING MORE COMPANIES IN INTERNATIONAL SALES The vast majority of exporters and potential exporters fall into the Small/Mid-Sized Enterprises (SME) category. 2 The total number of companies in tradable industries in the region is estimated to be between 7,500 and 15,000 companies. 3 However, only about 2,500 of these SMEs currently export. For every company that exports there are two more who could, but don t. 1 U.S. Department of Commerce, Bureau of Economic Analysis, Interactive Data 2 SME is defined as having fewer than 500 employees 3 The split between tradable and local industries is difficult to estimate. The two numbers used here and are the high and low proportions, which are only estimates based on GDP and employment. 24

25 GOAL While external factors such as the strength of the U.S. dollar impact the speed that a strategy will impact exports, this initiative seeks to double exports for the Milwaukee 7 region as quickly as possible by pushing hard to maximize the potential of companies in the region. A significant growth in exports will help: Fund growth while companies drive for innovation; and Create new ideas as a result of exposure to new environments. Both outcomes help address the broader goal of increasing competitiveness in the region. OBJECTIVES Double the export impact of SMEs in the region, i.e. increase the number of SMEs that export and increase the number of markets SMEs export to. Increase the number of countries larger firms export to. Encourage larger firms to bring their regional suppliers along with them to export markets. Increase the sense of global engagement across the community. Today 41% of CEOs see global engagement as crucial to the economy; the goal is to increase that to 67% of CEOs having that perspective. It s about overcoming obstacles Success in business is about identifying and overcoming obstacles. When it comes to exporting, the challenges change as companies gain experience. Depending upon where they are on the export experience continuum, companies will face different obstacles (below). COGNITIVE HURDLES Companies in tradable sectors who do not yet export typically face cognitive obstacles. Company leaders frequently express sentiments like, We don t know anything about exporting, including how to get started, or Right now we have too much domestic opportunity to worry about exporting, or Getting into exporting seems risky and expensive. These sound like reasonable objections until they are compared to the upside. The objection that we have too much domestic opportunity right now... is short sighted. Unfortunately, in the region numerous companies who focused only on domestic sales were unable to weather the recession and no longer exist, while their competitors who did export survived the recession and are now thriving. The obstacles are not as significant as they first seem. In our region, more than 2,500 small/midsized companies have already overcome these obstacles and today are participating in the export market successfully. POLICY HURDLES Larger companies focus more attention on policy-related hurdles, including trade agreements, tax laws, regulatory bilateral agreements and standards of all kinds. STRATEGIC FOCUS A strategy works if its tactics deliver against the identified opportunity. The tactics also must create a road map for overcoming hurdles along the way. The Milwaukee 7 region enjoys a well developed and highly cooperative set of resources that can address almost all the cognitive and process hurdles. M7 can help educate companies and reduce fear of the unknown. PROCESS HURDLES In a 2014 exporting survey conducted by Milwaukee 7, respondents who already do some exporting or are active exporters pointed to process-related hurdles including: finding a partner they could trust, getting good market intelligence, handling foreign regulation, and protecting their intellectual property as their greatest obstacles. Nationally, SME firms identify financing issues as being the main hurdles; obtaining financial resources to support the export activity; covering transportation costs; and dealing with high tariffs. Non Exporter Passive Exporter Active Exporter International Company Lack of time and resources Finding a trusted partner Trade agreements Perception of increase risk Market intelligence Tax laws Fear of the unknown Lack of knowledge TRADE VIABLE COMPANIES Handling foreign regulations Protecting IP Regulatory bilateral agreements COGNITIVE PROCESS POLICY 25