Think Global, Go Global: Export Market Strategies to Improve Your Bottom Line Friday, November 4, :30 am -12:30 pm Delta College Main Campus 1961 Delta Road Room S-105 University Center, MI Lake Superior State University Kenneth J. Shouldice Library Marine Room (LIB 362) Sault Ste Marie, MI J. D. Snyder Project Director Michigan State University Center for Community and Economic Development

Michigan 8 th in exporting in value of export merchandise and as % of gross state product, $44.77 billion total exports in Exported $22 billion to Canada. $7.4 billion to Mexico. Germany, Japan, China, and Saudi Arabia the next most significant export markets-over $1B to each. MI Exporting Background

Over one-quarter (26.7%) of all manufacturing workers in Michigan depend on exports for their jobs (2009 data). 11,796 companies exported goods from Michigan sites in –10,651 (90%) were small and medium-sized enterprises (SMEs) <500 employees. Source: Office of Trade and Industry Information, International Trade Administration, U.S. Department of Commerce. MI Exporting Background Continued

Project Overview Our goal is to assist small and medium enterprises (SMEs) enter or expand exporting markets. Regional Partners: –East Michigan Council of Governments (EMCOG). –Eastern Upper Peninsula Regional Planning and Development Commission (EUPRPDC). Project Area: 14-county Saginaw Bay region & 3-county Eastern UP region.

Project Overview Continued Timeline: 18-months through December – Started July 1, project now in month 5. Funded by the U.S. Economic Development Administration.

Primary focus on Canada. –Canada is Michigan’s biggest export market and trading partner. –Relative ease of entering Canadian market: no language barrier and has a similar legal system. But other foreign markets too. We aim to work with businesses in our two partner regions and local partners to help businesses export. –In collaboration with federal, state, and other university resources. Project Thrust

Designed survey questionnaire to identify extent of exporting, perceived barriers to exporting, and exporting assistance needs. Distributed online survey link to over 50 local chambers and EDCs/EDOs in the East Michigan and Easter Upper Peninsula regions in September. 66 businesses responded. MSU Online Exporting Survey Background:

43% (20 of 47 companies) are currently exporting. –30% (6) of these companies have fewer than 25 employees. Canada is the major export partner (74%), followed by the UK (53%), Mexico (47%), China (42%), and Germany (37%). Of the companies that currently export, 90% want to expand their exporting business. MSU Online Exporting Survey What we found:

Perceptions of adequate access to Canadian Markets was consistent across regions. MSU Online Exporting Survey More on what we found:

Perceived barriers to exporting: –78% cited lack of knowledge about: Export regulations; Foreign markets; Logistics/transportation. –74% cited financial barriers: Insufficient working capital; Insufficient labor resources; Excessive administration costs; Excessive financial risk; Excessive cost to compete. MSU Online Exporting Survey More on what we found:

Other barriers include: –Regulatory matters for 44%: Excessive trade regulations; Unfair foreign trade practices; Unfair foreign tariffs. –Infrastructure barriers for 22%: Insufficient information/communications technology; Insufficient access to international crossings. MSU Online Exporting Survey More on what we found:

How did companies get connected with foreign customers? –74% contacted by prospective foreign customers. –32% made contact through trade show or conference. –~27% from their web sites.

MSU Online Exporting Survey More on what we found: How do companies market products to foreign customers? –Big majority (63%) indicated web-based marketing. –~43% cited relationship building and trade shows.

Resources to reduce the burden of export market entry. Market research on specific countries and specific products/services based on assessment of local needs. Foster “Sister City” relationships. Identify and support industry clusters. Access to capital (loans, loan guarantees, cost-share, venture capital, angels). Potential Elements of Regional Exporting Strategies

Exporting Resource Ecosystem

Today’s panelists Anita Walker, U.S. Export Assistance Center Bruce Brogan, Fifth Third Bank Tunga Kiyak, MSU International Business Center/CIBER Tom Gross, Dynamic Manufacturing, Weiland, Michigan

Upcoming Workshops Business Exporting Strategy Workshop: winter Supply Chain Strategies Workshop (with MSU Dept. of Supply Chain Management): early spring, Export Financing Workshop: late spring, Michigan/Canada Linkages Workshop (with MSU Canadian Studies Center): fall, Visit for our workshop survey results and project updates.