You probably know that exports support jobs; 11.5 million of them in 2015 according to the International Trade Administration. But you may not know that export-supported jobs accounted for roughly 40 percent of net new job growth in the United States between 1993 and 2008. And over the last eight years, businesses engaged in international markets grew by an average of 37 percent while domestic market only businesses lost an average of seven percent in revenue.
So exports significantly drive employment growth and are strongly correlated to business expansion. Jobs and growth, exports sound a lot like economic development. That’s the logic that drove the Charleston Metro Chamber of Commerce to develop the Metro Charleston Export Plan.
“Boosting exports across a region won’t just happen, you need a plan,” said Bryan Derreberry, president and CEO of the Charleston Metro Chamber of Commerce. “And to build a strong export plan you need great partners. We were fortunate to have a great national partner in the Brookings Institute to conduct a comprehensive assessment.” Forty other local stakeholders – from lawyers to universities to state agencies – were also involved in the effort.
Their assessment found that exports were driven by only one percent of companies in the market. They also discovered that the region has strong potential in exporting services and non-durable goods. According to Derreberry, “Redefining what exports entail for your community is key. Trade is not just about farm equipment and airplanes, it’s also IT software and international tourism.”
Not surprisingly, the plan also revealed that most of the region’s businesses were exclusively focused on markets in the southeastern U.S. “International markets just aren’t on the radar for most businesses,” said Derreberry, “but once they understand the opportunities, they get excited.”
“Most companies just don’t know how to export,” said Pennie Bingham, executive director of World Trade Center Charleston. “There are a lot of good resources out there, but none of them fully connect the dots for businesses to go out and begin exporting.” Connecting the dots is the goal of the Metro Charleston Export Training Program.
Export Charleston is an initiative of the World Trade Center Charleston, which is part of the Charleston Metro Chamber. Its mission is to build a thriving export economy to accelerate job growth in the region by growing the number of small-medium enterprises that export. The program teaches companies trade regulations, exposes them to trade resources and provides access to business coaches with deep export experience. At the end, each company has a customized export plan, making the program what Derreberry calls, “instantly actionable.” In practice, Export Charleston is a cohort-based, executive education program. Cohorts are capped at eight companies and senior executive staff are the primary participants. The program spans three months and consists of four day-long gatherings with extensive one-on-one coaching between sessions.
95% of consumers live outside the United States; 70% of the world’s disposable income is spent outside the U.S. by a growing global middle class.
“Identifying a great facilitator with extensive trade experience was the first key to success,” said Bingham. “We also relied on coaches to work with participant companies between sessions and business student interns to help with research.” Many coaches came from the Small Business Development Center and the U.S. Commercial Service. Interns from the College of Charleston helped bring the extra research horsepower necessary to define potential markets for individual companies, the groundwork Bingham calls the “hardest part of the program.” Also, chamber members were frequently tapped to deliver specific issue expertise.
Companies pay $1,500 to participate, with additional program costs supported by state grants. To qualify, companies must have been in business for at least two years, have an exportable product/service, have $10,000 for plan implementation (e.g. translation and travel expenses) and sign an agreement to participate in all four sessions and create their company’s Export Plan.
To date, 25 companies have participated in the program’s five graduating cohorts. They represent a wide range of sectors, from toys to commodities and home goods to engineering services. Many have already enjoyed tremendous success.
Shortly after completing the program, family owned farm Gillespie’s Peanuts secured a contract in China for 2,000 metric tons of peanuts, worth roughly $2.25 million in gross sales. They credit Export Charleston for helping identify and close the deal which has nearly doubled their business. “One eight-hour class was like a semester in college,” said program participant Frank Benson, director of sales and marketing at Gillespie’s Peanuts. “It was that informative.”
Gillespie’s Peanuts are not alone in their rapid export growth. For handmade soy wax candle company Rewind, 2016 mid-year exports of $700,000 eclipsed total sales in 2015. All told, participating companies have closed more than $4 million in international sales since 2014 and have an additional $2 million currently pending. And those figures are growing fast.
This kind of growth for local small-medium companies is exactly what the Export Training Program is designed to produce. But according to Derreberry it’s also about something bigger. “This program is helping create the trade culture that we want to permeate in the region. The more companies that understand the opportunities in global trade, the more we can drive job, wage and wealth growth in Metro Charleston.” Exports do sound a lot like economic development.
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