Exports an Excellent Growth Opportunity for State Manufacturers
submittted by Mike Klonsinski
The question on everyone’s minds these days is what can we do to grow jobs in Wisconsin?
One strategy that wins widespread consensus — from the president to national business organizations to manufacturing leaders — is to significantly increase manufacturing exports. With many of the fastest growing markets outside the U.S., selling Wisconsin-produced goods to a new generation of consumers in Southeast Asia, South America and other global destinations is an excellent growth opportunity for small and mid-size manufacturers in Dane County and across the state.
The Obama administration has set a goal to double U.S. exports by 2015. Reaching that goal in Wisconsin would have an enormous impact on our economy and the creation of high wage jobs at a time when they are very much needed. Exports are a catalyst for profitable manufacturing growth and expansion, which in turn fuels economic growth and rising tax revenues. Exports of U.S. manufactured goods have been one bright spot in this slow recovery.
Twenty percent of state manufacturing workers rely on exports for their jobs. Global sales are a big contributor to Madison’s regional economy. A recent study from Brookings reports that the Madison Metropolitan Statistical Area (MSA), which includes Columbia and Iowa counties, produces $3 billion in total exports, supporting 30,362 jobs.
Alpha Source, Inc., a supplier of biomedical repair parts, underscores the financial gains a small firm can achieve with a strong global focus. A recipient of the Governor’s Export Achievement Award, the 35-employee Milwaukee firm launched its international department in 2005 with one employee; today the firm has customers in 45 countries and exports represent 15% of sales.
But for all the success we’ve had in Wisconsin, there are scores of small and mid-size manufacturers on the sidelines. The Wisconsin Next Generation Manufacturing Study found that 60 percent of more than 500 manufacturers surveyed said they were making “little or no progress” toward becoming a world-class global player. Only 4 percent of respondents ranked themselves world-class.
Clearly we’ve got some work to do.
To be sure, small firms can face big challenges when getting started on exports. Typically they don’t have the resources and expertise of larger firms, and in many cases they’re rooted in a business culture that has long relied on U.S. markets and customers. Some manufacturers believe they’re too small to export or that it is too risky or complicated, when the real threat today is not having a global strategy.
The Wisconsin Manufacturing Extension Partnership and the Wisconsin Department of Commerce Bureau of Export Development are offering a new program, ExporTech, to help small and midsize manufacturers create or expand an export program in three months. A coach/mentor helps companies collect market data, identify target markets and create an international plan for profitable growth. A panel of successful exporting companies provides guidance and feedback. Up to 10 non-competitive companies can join each session.
A new session of ExporTech kicks off Oct. 12 at Bentley World-Packaging, Ltd. in Milwaukee.
Exporting is not a short-term strategy. Companies just getting started may have to wait two or three years before realizing a strong payback. But companies that do make the commitment to selling outside our borders have a far greater chance of long-term profitability and growth than those that rely on domestic customers. Now is the time to start.
Mike Klonsinski is the executive director of the Wisconsin Manufacturing Extension Partnership.
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