The terms isolationism and internationalism are traditionally used when one discusses foreign policy. I think these terms can also be applied to the world of business. The United States is still the largest economy in the world and as such, local companies tend to focus their attention more on business opportunities in their own region, […]
The terms isolationism and internationalism are traditionally used when one discusses foreign policy. I think these terms can also be applied to the world of business. The United States is still the largest economy in the world and as such, local companies tend to focus their attention more on business opportunities in their own region, state, or the nation as a whole. The idea of selling their products overseas may not come to mind even if there is great potential. This is quite evident by the extremely low export numbers generated by U.S. firms.
This is one of the reasons why the Obama Administration instituted an initiative back in 2009 to double exports. Following its lead, Centerstate CEO launched the Metropolitan Export Initiative in the spring of 2012 after a yearlong study conducted by the Brookings Institute to determine how many companies in the Centerstate footprint may have export potential. It turns out there were well over a hundred companies. In fact, Stephen King, executive director of the Central New York International Business Alliance (CNYIBA), says he has met with 200 companies that supposedly have export potential.
Exploring exports
There is so much potential for growth outside the U.S. that local companies were encouraged to explore those opportunities with the help from government resources like the U.S. Commercial Service — the trade-promotion arm of the U.S. Department of Commerce’s International Trade Administration. Alas, the psyche of the American businessperson tends to lean away from taking the leap overseas, which in a sense is quite ironic because Americans have been known to be great risk takers.
European and Far East companies historically have been viewed as being more risk averse than their American counterparts, yet they are much more likely to explore what international markets have to offer. In the case of these international firms, their willingness and ability to look outside their own country for growth is predicated by many factors including location and opportunities. In order for companies to grow, they needed to look elsewhere for those growth opportunities. And, that includes coming to the U.S. Once they have made the leap, however, their traditional, conservative way of thinking and spending kicks back in. They tend to be much more reluctant to take the same chances their American counterparts are taking in the U.S. or spend the same kind of money on sales and marketing. That can result in the German company not achieving the results it was seeking, and after a period of time (maybe three years), calling it quits and focusing on a different part of the world.
Taking advantage of the Trans-Pacific-Partnership (TPP)
The U.S. recently reached a trade deal with 11 Pacific nations. “For the U.S., the Trans-Pacific Partnership trade agreement opens agricultural markets in Japan and Canada, tightens intellectual property rules to benefit drug and technology companies, and establishes a tightknit economic bloc to challenge China’s influence in the region,” The Wall Street Journal reported.
This is huge news because one of the major complaints from companies when it comes to international trade is the difficulty they face getting their products in to a foreign market due to trade restrictions. With these restrictions lifted, it is one less barrier and therefore one less reason why an American company should not consider expanding globally.
Opportunities for U.S. companies
Historically, U.S. companies are bigger risk takers than most of their foreign competitors, except for when it comes to exports and international trade. This holds especially true for companies in upstate New York.
Why are they so reluctant to engage in international trade, especially if it is with an English speaking country? Is this where the concept of being a visionary comes into play? Visionaries will not only be open to taking a chance, but also have the courage to do something or go somewhere where they may not have been to before, but believes they can find success. A little handholding from a trusted source that can help ease the transition into a foreign market will also go a long way.
One way to help overcome fear of the unknown is to take advantage of different trade missions being offering by either the U.S. Commercial Service, or your state or regional economic development organization. These trips are usually organized in such a way that all the participant needs to do is get on a plane and the rest is taken care for them. The organizing party will set up meetings with possible business partners, agents or customers in those foreign markets. Visiting an international trade show in your industry segment can also be a great way to learn more about international opportunities. Notice I said “visit” and not exhibit. This gives you a chance to see who is offering what, size up your competition, and see whether there might even be interest for what you have to offer.
At the end of the day, opportunities for a small- to medium-sized U.S. business to achieve exponential growth by exploring international trade are huge.
Mark Lesselroth is founder and principal of Brenner Business Development, an international business-development consultancy focused on helping small- and mid-size businesses in the U.S. explore international opportunities as well as assisting foreign-owned companies gain market entry into the U.S. Contact him at mark@brennerbd.com