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Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
NEI DEC Luncheon
Wednesday, March 23, 2011
Salt Lake City, Utah
As prepared for delivery
Thank you very much for your introduction, Mark. It is a pleasure to be here in Salt Lake with the Utah District Export Council. The U.S. and Foreign Commercial Service and the DEC have had a long relationship that has helped connect small and medium-sized businesses to global opportunities. I also want to thank Everett Eissenstat for attending today. Everett is the Chief International Trade Counsel on the Senate Finance Committee, one of the main committees that works with the International Trade Administration.
As President Obama said in the State of the Union address last month, “We need to out-innovate, out-educate, and out-build the rest of the world.” To win the future, we must work together to create opportunities that encourage innovation and spur growth. We must produce innovative products and technologies, we must educate and train our workers and students so that we may scale new technologies and we must connect our exporters with buyers worldwide. Growing U.S. exports is not only good for the U.S. economy but also for our trading partners.
The National Export Initiative is at the forefront of the Obama Administration’s short and long term economic strategy for winning the future. The President’s goal of doubling U.S. exports in five years serves as a catalyst to enhance our competitiveness, create sustainable jobs and build a stronger America.
Through the National Export Initiative, we help companies expand their global footprint to reach more customers worldwide. This not only helps create greater sustainable employment but also helps us become more competitive.
As Assistant Secretary and Director General of the U.S. & Foreign Commercial Service, I lead a team of 1,500 trade professionals in 109 offices across the U.S. and 127 cities in 79 countries.
The Commercial Service is a key implementing agency of the President’s National Export Initiative and is committed to enhancing U.S. competitiveness. Last year, we assisted 18,000 companies export, of which 16,000 were SMEs. Nearly 5,600 companies increased their exports to a new market and 85 percent of those were small and medium-sized businesses. The Commercial Service helped U.S. businesses post over 12,000 export successes in 2010. Last year exports grew 17% vs. 2009 which is better than the 15% compounded annual growth rate required to double exports within 5 years. Utah did even better, recording exports of $13 billion, a growth of 31% over 2009.
Our USEAC office here in Salt Lake serves the region to ensure we reach SME exporters in important rural areas, not just the major metropolitan areas. Working with the state government, area universities, and local economic development agencies allows us to leverage our programs for the maximum benefit of SMEs in the Utah region. Just this morning I visited the Salt Lake City Community College Miller Business Innovation Center. It is an example of the collaboration between education and business that drives innovative companies to develop, produce and market products internationally.
America is at its best when it is inventive. We invented the motor car, the airplane, the computer and even the internet and GPS which we commercialized through public-private partnerships. “Winning the Future” will require continued private sector innovation. The Administration is committed to lay the foundation for future success through policy mechanisms that reduce risk, provide greater predictability and influence common standards.
When we have innovated we have prevailed. That is why this Administration places so much emphasis on innovation, on building and owning the markets of tomorrow even as we vigorously compete for share in today’s markets. American products improve lives and livelihoods globally; because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
Private sector employers driven by small and medium-sized companies have added jobs for thirteen straight months. For the first time in 24 months (April 2009) unemployment is below 9% at 8.9%, but even this is unacceptably high. Facilitating and growing exports that create more employment has never been more important than now. The more we sell overseas, the more jobs we create in the United States. Every $1 billion of goods and services we export supports more than 5,000 U.S. jobs.
Innovation is the foundation for sustainable competitiveness in the 21st century. It is how U.S. companies and our products and services can reach the 95% of consumers who live outside our borders.
Winning the future requires increasing investment in research and development. The Obama Administration has made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development. Nowhere is this more important than with small and medium-sized enterprises, which make up 97% of all firms in the United States.
A larger focus for U.S. businesses must be to reinvent what we make, consume, market and sell. Government must reinvent its support, focusing on self-sufficiency, sustainability and innovation. An example of such reinvention came last year when the Administration brought together businesses, entrepreneurs, CEOs, regulators and representatives of foreign governments along with NIST to influence the development of common standards for SMART grid and ancillary products and services.
Hand-in-hand with innovation through R&D, and investment in infrastructure from high speed rail systems to high speed internet, the Administration has a targeted focus on creating and funding sustainable solutions for the future that lead the global marketplace.
Utah is an example of hardworking Americans who have the skills and dedication to produce the best products in the world: One such company is Air and Sea International here in Salt Lake City. Air and Sea contacted our USEAC office in Salt Lake for assistance in trouble shooting a customs issue it was experiencing in Malaysia that prevented a large sale to that country. Our staff helped identify the logistical issue and cleared the roadblock that led to the successful shipment of a $1.2 million order.
There are several such examples of problem solving that the Commercial Service’s trade specialists work on every day to assist local businesses identify new markets, develop market entry plans guide and assist you to secure working capital even as they assist others to navigate foreign customs and regulations.
Through our Gold Key matchmaking services, one-on-one export counseling, and our extensive network around the globe, the U.S. Commercial Service can assist Utah’s companies to convert export challenges into profitable opportunities. We are here to make exporting easier for you.
The Administration’s focus on innovation, education and commercialization reflects market-driven, competitive approaches that make sure that the United States is the best place to do business and to innovate.
Leveraging this strategy requires creating deep market linkages and connecting innovation to the marketplace. This is the core of the NEI — connecting American innovation and our innovative products and services with consumers worldwide. The U.S. Commercial Service leverages partnerships through its Strategic Partnership Program with corporations, like UPS, FedEx, USPS, and trade associations to increase awareness of exporting opportunities amongst small- and medium-sized businesses. Our trade specialists counsel SMEs and encourage them to connect with the 95% of consumers living beyond the United States who constitute a profitable global opportunity.
The Administration recognizes that increasing global trade provides opportunities for growing America’s SMEs. Exporting must play a larger role in the U.S.’s economic prosperity. The pre-crisis drivers of U.S. economic growth - domestic consumer and business spending - can no longer be the only levers of an emerging and even more globally connected marketplace. The Administration also works with our trading partners to provide access to new markets: those who seek access to U.S. markets must also remove barriers to trade and open their markets to U.S. products.
To win the future, U.S. businesses must expand their global reach to new markets. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally.
Besides, exports as a percentage of our GDP is just 12.5%; whereas exports account for 40 percent of Germany’s GDP, 30 percent of Canada’s GDP and a quarter of China’s GDP comes from exports. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future. Because when U.S. companies export more, we produce more. When we produce more, we need more workers.
And export related jobs on average pay 15 percent more than the typical wage in America.
Innovation and exporting are inextricably linked; they ARE the drivers for sustainable economic growth and help create well paying jobs.
I look forward to our continued collaboration with our partners and to working with the SMEs like the ones here today to create a vibrant, robust, and resilient American economy; an economy which produces well paying jobs at home, increases our competitiveness globally and helps America lead the way in creating global prosperity.
When you succeed, the entire American economy succeeds.
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