The United States has benefitted greatly from easy trade between and among the states and from a large and growing population base. For many US companies, growth was possible without a thought about foreign markets. And, for a long period of time, exports as a percent GDP hovered below 10 percent.
By contrast, most European and Asian businesses working with strict borders and smaller national populations were forced to compete in foreign markets where they had to overcome economic, language and cultural barriers. If domestic businesses in European countries wished to grow they had to rely much more heavily on the ability of its businesses to sell into foreign markets.
Consequently, the differences in the circumstances between the US and European and other nations has produced distinct differences in the relative importance of trade to domestic economies. In the US, about 13 of 100 jobs are derived from overseas demand for US produced goods and services. Contrast that to export-related jobs in other countries – Australia (21 of 100) Canada (32 of 100), Germany (46 of 100), and Austria (53 of 100).
What these data suggest is that most of business in the rest of the world has had centuries of experience with foreign markets. In the US, not so much. It appears that many US businesses will have to play catch-up if they are going to compete effectively with businesses from other nations in newly emerged markets in Africa, Asia and South America. Languages, cultural awareness, business practices and legal, banking and accounting differences may impose barriers to many new US businesses moves into foreign markets.
These global realities are likely to represent special challenges to Pittsburgh businesses. First, recent census data indicate that the region is losing population. Population-based growth is not likely. Second, Pittsburgh’s presence in foreign markets is about half of the national average. Only about 7 out of every 100 jobs result from foreign customer purchases compared to 13 per hundred in the nation as a whole. Pittsburgh area businesses have less experience with foreign trade than other businesses in the US, on average.
Consider this. If Pittsburgh export activity rose just to the national average from 7 to 13 per hundred jobs, an additional 68,000 jobs could be supported by foreign demands for regionally produced goods and services.
How can Pittsburgh businesses move into foreign markets with greater effect?
Several things. Businesses need to start thinking globally when it comes to markets. Even small business have had success in overseas markets. Businesses should not feel alone in making the decision about foreign markets. There are many sources of support of all kinds in the Pittsburgh region. Public organizations like the #Southwest Pennsylvania Commission and the #US Commercial Service in Pittsburgh are great resources as are private firms like #Bank of America’s international banking services and Schneider Downs for tax assistance. Pittsburgh also houses a local office of the international organization #Global Chamber. Becoming a member of #Global Chamber Pittsburgh gives #Pittsburg area businesses a venue to interact with other businesses about foreign markets and provides extraordinary access to professional trade people on-the-ground in countries and markets around the globe.
The Pittsburgh area can compete in global markets but more businesses need to take that first step to make foreign markets a more substantial source of jobs, income and growth in the region. Resources are available in abundance in the Pittsburgh region to help them do so. #globalchamber.org @globalchamber #Pittsburgh @Pittsburgh