Sustainability and Globalization are not the same thing. However, the two are coincident, both entail substantial increase in scope of management attention, and both are strategic necessities for those who seek to “thrive in perpetuity”[i]. Practically speaking, Globalization is a context within which Sustainability is pursued.
For many smaller manufacturers, “Globalization” conjures up supply chain opportunities and, certainly, present or potential competitors. Why not global customers?
Sorry, “we can’t compete abroad” just doesn’t fly — that’s obviously not sustainable. However, exporting may well require careful planning, tailoring of your value propositions to your target export markets, and assistance from knowledgeable people.
In the 12 months ending last February, U.S. exports totaled $2.134 Trillion (yes, with a “T”). So, somebody in the U.S. can compete in world markets. In fact, about 93% of the world’s population doesn’t live in the U.S. And that 93% includes most of the growth.
President Obama has established an objective to double U.S. exports from the 2009 level by 2015. That requires about a 15% per annum compounded growth rate in U.S. exports. According to the latest available figures (February 2012), the U.S. is about on track, believe it or not. This is due, in part, to the falling value of the U.S. dollar compared to other currencies, to the availability of cheap energy (and petrochemical feedstocks) in the form of natural gas, and to some useful initiatives on the part of the U.S. government.
Two Approaches to Exporting
Indirect Export Sales: Many manufacturers export indirectly, by supplying components to other manufacturers, who export the finished products. Suppliers to Boeing, for example, deal with a domestic customer: Boeing exports finished aircraft, then supplies service parts for a long time. There are many similar examples. Indirect exports are at the core of the success of Germany’s Mittelstand, the legion of middle – sized, highly specialized, mostly family owned and operated manufacturing firms that key Germany’s considerable success at exporting manufactured products.[ii]
Direct Export Sales: Direct export sales means finding and serving customers abroad through appropriate sales, marketing, distribution, financial and service / support channels. There is a lot involved with doing all of that, so that’s where most smaller manufacturers will need some outside resources.
Some Resources to get you started:
- There is an informative Take Your Business Global presentation series on exporting, co-produced by Inc magazine, AT&T and the Small Business Administration. Find it at: www.inc.com/exporting
- There are over 100 domestic U.S. Export Assistance Offices, and a similar number abroad. Find Export Assistance Office location information, as well as training and support offerings at the U.S. Government’s multi-agency export portal at www.export.gov
- ExporTech: The Manufacturing Extension Partnership, in cooperation with several other government agencies, offers an exports development program especially tailored for smaller manufacturers. Here is how the MEP website (http://www.nist.gov/mep/exportech.cfm) describes the program:
“For manufacturers, ExporTech is the “how-to” program that helps your small- or medium-sized company enter or expand into global markets by assisting in the development of an international growth plan customized specifically for your business. Utilizing a team of export experts, ExporTech helps your company move quickly beyond planning, into actual, profitable export sales.
“The ExporTech program is intended for executives and is aimed at both new-to-export companies and those that have done some exporting, but have not fully exploited global opportunities.
“If you’re a manufacturer, ExporTech:
- Provides resources that help you rapidly move from planning to actual sales and payment
- Teaches you international strategies and success factors based on real-world company research
- Helps your team build a robust export plan in just three months
- Connects you with reputable resources and expert consultations in your community
- Accelerates your speed to market, actual leads and sales
“If you’re a manufacturer interested in learning more about ExporTech, contact your local MEP center for more information.”
Thoughtful comments and experience reports are always appreciated. Click on the title of this post to open the comments section.
… Chuck Harrington (Chuck@JeraSustainableDevelopment.com)
P.S: The Jera blog is intended to be useful to smaller manufacturers who choose to pursue Sustainability. New posts are issued weekly. Register for a Free subscription at: http://www.jerasustainabledevelopment.com/Contact_Page_1.php
A PDF version of this post is available for download at: http://app5.websitetonight.com/projects2/4/9/9/4/2164994/uploads/Blog_Post_-_The_Export_Imperative_-_10_May_2012.PDF
Photo: Dreamstime, www.dreamstime.com
[i] Werbach, Adam, Strategy for Sustainability, Harvard Business Press, Boston (2009), page 9
[ii] Because of Germany’s success an exporting manufactured goods; there are a lot of recent publications regarding the Mittelstand. For starters, try Marko Slusarczuk’s article in Manufacturing and Technology News, 30 September 2011. http://www.manufacturingnews.com/news/11/0930/slusarczuk.html