Land of Opportunity and Challenges
Recent economic turmoil in Asia and Latin America has some U.S. small-business owners thinking twice about exporting. Who could blame them? Record trade deficits confirm what foreign entrepreneurs already know: The United States is the mother of all consumer markets. American shoppers are numerous, prosperous and they pay in greenbacks. Why bother leaving home at all?
Time to kick that 20th century thinking to the curb and get ready for a new burst of globalization as we head into a new millennium. Asia may be down, but it’s certainly not out, as shown by recent figures from the Los Angeles Economic Development Corp. The LAEDC is projecting that GDP growth will hit positive territory next year for all nine East Asian countries embroiled in the 1997 financial crisis. So much for those naysayers who figured Asia might be a basket case for the better part of a decade.
Latin America is on the mend as well. The International Monetary Fund says things are looking up for bellwether Brazil, whose battered economy is projected to grow at a brisk 4% in 2000.
Think your company is too puny to export? Think again. Nearly 96% of all U.S. firms that export are small businesses, according to the Small Business Administration’s Office of Advocacy. To be sure, those small fry account for less than 30% of the value of U.S. goods shipped abroad. But trade experts predict that online technology could substantially boost that share.
Indeed, the Internet is proving to be the great equalizer when it comes to opening up trade opportunities for the little guy. E-mail has slashed communications costs, putting Dusseldorf, Germany, as close as Dallas. Companies lacking international contacts or big travel budgets are shopping their products to foreign buyers via their Web sites.
What’s more, the Internet has become the premier vehicle for performing market research and garnering trade leads. Government and private-sector agencies dispense the most valuable and timely information almost exclusively via the Internet. If you’re not online, then you’re not plugged in.
New trade pacts and alignments will continue to make globalization an imperative, not an option, for many small businesses. The North American Free Trade Agreement ushered in a whole new era of transnational production of goods such as apparel, in which products make stops in the U.S., Canada, Mexico--sometimes all three--on their way from the initial design to the final sale. Entrepreneurs in industries such as garment-making have no choice. They must adapt or perish.
Southern California’s logistics make it a natural gateway to Latin America and the Pacific Rim. Its demographics also should help to ramp up international sales heading into the new century. Office of Advocacy figures show that Latino and Asian entrepreneurs are more likely to export than their white counterparts, which bodes well for multiethnic Los Angeles.
Likewise, Southern California is home to more women-owned businesses--360,300--than any other metropolitan region in the country. While women-owned businesses are less likely to export than male-owned firms, those that do sell to other countries garner a higher percentage of their revenue from international sales, according to the Office of Advocacy.
Haven’t learned Spanish yet? That’s music to the ears of your European competitors. June’s historic meeting between leaders of the European Union and Latin American heads of state marked the beginning of what those nations hope will develop into a transatlantic Euro-Latin free-trade zone.
If you’re still convinced that exporting is for the other guy and that there’s no place like home, so be it. But when you hit the new millennium, don’t look back. Like Satchel Paige said, someone might be gaining on you.
