Exporting---key to survival and growth

SBA Says: Small Business, Wholesaler Exporting Declining

Exporting, while a bright spot in the U.S. economy, is something that small businesses and wholesalers still need to work on, according to a Small Business Administration report.

“Small businesses have often ignored the international marketplace because they could,” the report stated.”In a globalized economy, more and more small firms will need to consider export opportunities as an important key to survival and growth.”

In ten years, from 1996 to 2006, the total value of exports nearly doubled, from $500.7 billion to $910.5 billion. But within that same time period, the share of small businesses decreased from 31.1 to 28.9 percent, according to the report. The declining share of wholesalers became even more pronounced, dropping from 74.1 percent to 53.6 percent.

And while the weakened dollar helped make U.S. goods and services more competitive in the global market, the administration’s call for small business contributions is still timely. After all, the United States still faces a $560 billion trade deficit, and its consummation of imports continues to grow faster than real GDP.

“To shrink the trade deficit with the rest of the world, it will be important to either curtail the growth of real imports or to encourage rapid increases in real exports or both,” the administration said in the report. “A cheaper dollar helps, but the solution lies within finding new markets for American goods and services.”

Wholesalers have proven before that they can drive growth in U.S. exports and with this, the economy as a whole. After declining with the economy during the 2001 recession, the number of exporters rose back to peak levels by 2006. Wholesalers contributed to 51.0 percent of these exporters with fewer than 20 employees, whose value added up to $21 million.

Small businesses are also especially important, because they are more likely than large firms to create innovative goods and services, according to a cited study by Acs, Morck and Yeung.

For more information, call 202-205-6533 or read the report.

Filed under: exporting, SBA, small business