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Is There a ‘Place’ in Obama’s Export Agenda?

Even with a crowded administration agenda this year, export promotion is one area in which  President Obama has shown considerable leadership, not seen in the United States for a long time. The president articulated an ambitious export goal for the nation in the State of the Union:

“We set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America.  To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.”

The president launched the National Export Initiative in March 2010 at the Export-Import Bank’s annual conference. As the newly-released report on the NEI shows, this export promotion policy is focused on increased export financing, advocacy, and assistance for American businesses, especially small- and medium-sized firms interested in expanding their markets abroad.

Some of the novelties include the creation of a formal mechanism for the White House and the National Economic Council for direct involvement in advocating for U.S. companies in procurement bids abroad, an extensive range of activities around helping American businesses to make the first step towards exporting, and a more focused export promotion strategy for a limited number of “next tier” markets: Colombia, Indonesia, Saudi Arabia, South Africa, Turkey, and Vietnam. The NEI report also recognizes the importance of U.S. service exports, a sector harder to measure than manufacturing exports but highly competitive in the global market.

While all the aspects tackled by the National Export Initiative are important, this remains a federally-centered plan. Achieving the national export goal requires a national export strategy, one that fully engages states and, most importantly, metropolitan areas.  The NEI report notes the “critical role” state and local governments play in export promotion, but the combined power of the private, public, non-profit, and academic institutions in our metros, acting in concert, offers much greater potential than some may realize. Call it the “power of place.”

Economic leadership in global markets will be driven by these metros; because they are home to most of our manufacturing capacity, financial resources, human capital, and research and innovation infrastructure. Our research shows the 100 largest metropolitan areas produced an estimated 64 percent of U.S. exports in 2008, including 62 percent of U.S. manufactured goods and 75 percent of services. Of the 11.8 million export related jobs in the United States in 2008, 7.7 million were located in the top 100 metro areas. Exports of high-value-added goods and services, products in which the U.S. excels, originate in competitive clusters located in our metropolitan areas, such as the aviation cluster in Wichita or computers in Portland, Ore.

A successful export strategy in today’s global market needs to build on the strengths we already have, in the places where those strengths already exist. It requires we invest in the things that matter, such as infrastructure and innovation. It demands we look at our economic geography differently, recognize the importance of industry clusters, and, most of all, the power of our metros; because global competition in the 21st Century is not among nations, but among the metropolitan areas in those nations.

 This requires a broader export promotion agenda that connects efforts on trade and commercial advocacy with human capital, infrastructure, and innovation policies. The U.S. government should level the playing field on trade and currency for U.S. firms and also help companies to improve their products for export and connect with global markets. And that is even more true in a country like ours where export promotion is a federalist rather than a federal act. Export power houses, such as Germany and China, have understood this. Even more, they actively help their places compete. In a world in which cities account for 70 percent of the global economy, the U.S. still needs to add the term “place” to its export promotion dictionary.