Profit Minded

Go global for growth, says economic competitiveness expert



When it comes to global sales, the U.S. ranks alongside Rwanda and Tajikistan with 17 percent of GDP coming from exports. Germany’s export-to-GDP ratio, by comparison, is 52 percent. So it’s little wonder that Nilmini Rubin,senior advisor for global economic competitiveness of the House Foreign Affairs Committee, believes there are huge opportunities for U.S. businesses to increase their competitiveness.  

Fewer than 1 percent of the 30 million companies in the U.S. export, and 60 percent of that 1 percent export to only one country, she says. Those data, she says, point to “a massive incentive for increasing our exports.”

Rubin, who leads technology, trade, finance, and energy legislation work for the committee, spoke at the Techonomy conference in Detroit this week. Techonomy CEO David Kirpatrick asked Rubin to explain how the U.S. can stay competitive and, “What should we be thinking of as a priority as we see countries around the world redoubling their focus on making jobs, building wealth, and selling things to the world?”

Rubin is optimistic. She sees the U.S.’s natural resources, talented workers, and emerging competitive advantages enabling the nation to increase growth on a global scale. In particular, she says, the reduction in energy costs here has piqued foreign interest in manufacturing on U.S. soil. Washington State, for instance, where electricity is six times cheaper than in Germany, recently attracted BMW to build a $100 million plant there, she says.

But Rubin suggests that one of the best ways for U.S. companies to create new jobs is to increase exports. “We have 317 million people in the United States. There are 7.9 billion people in earth. That means 90 percent of the consumers are outside the U.S. If we think about growing businesses with just a U.S. focus, we are really missing the people who are there to buy our products,” she says.

Startups, she says, should focus from inception on exports and the global market.

Rubin says that for its part, Washington is negotiating a free trade agreement with the European Union, as well as an improved trans‑Pacific partnership with Asia. And government export promotion groups—found at export.gov—offer an “alphabet soup of different things that can help companies access markets, because it is really confusing dealing with all the regulatory issues in exporting,” she says.

Perhaps surprising, considering the crippled economy of the Techonomy conference’s host city, Rubin notes that the Detroit region, thanks largely to the automotive industry, is the nation’s number four exporter.

How can small businesses “think more intelligently about creating markets outside the U.S.?” Kirkpatrick asked.

“Start out on the Internet,”Rubin says. Only 58 percent of U.S. businesses have a Web presence, she says. But e‑commerce is an obvious way to reach customers around the world. 

Rubin says that while about 78 percent of Americans have access to the Internet, “in the rest of the world, there are a lot more people coming on and a lot more consumers who will we able to buy our products.” In India, for instance, where only 11 percent of the population currently has Internet access, Rubin says more and more people will gain access in “a more ubiquitous way” via handhelds, tablets, and PCs.

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