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The Tough Go Global
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Business New Haven
11/6/1995
By: BNH
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As Connecticut businesses venture beyond familiar turf and into foreign markets, trade experts predict that those who fail to take their wares abroad within the next five years risk losing the opportunity altogether. Private and public institutions are creating export outreach initiatives and support programs with a new fervor. And firms new to exporting or seeking to further diversify their markets.
According to the U.S. Department of Commerce's Hartford district office, however, export growth was a lackluster two percent in 1994, down from ten percent in 1993. The drop was primarily caused by a decline in aerospace sales abroad. “Aerospace and transportation is a major driver of exports in the state, totaling one-third of all exports,” explains James C. Nicholas, executive director of the Connecticut World Trade Association (CWTA). “Fully 20 percent of [Connecticut] manufacturers are exporting versus 12 percent nationally, so we're still way above the national average.”
While historic barriers to international trade such as obtaining export financing from state-based sources (even the Connecticut Development Authority [CDA] is planning to offer trade-finance services) no longer obstruct sellers' access to overseas buyers, others remain difficult to surmount. “Most small companies don't have the manpower to go away for 10 days or so to a trade show,” Nicholas says. “Ninety-five percent of our manufacturers have fewer than 500 employees, and 85 percent have fewer than 100, so sending a couple of people out of their marketing force could decimate that area for a while.” The other obstacle for aspiring exporters is “fear of the unknown.”
Industries such as printing, publishing and related products have experienced a surge of 158-percent higher export revenues during the period 1990-94, growing 25 percent over the past year alone. Other high-volume products with escalating sales abroad include paper and allied products, chemicals, and electric and electronic equipment and components.
Countries hungry for Connecticut-produced goods and services are Canada, France, Japan and Mexico. Exports to Mexico have risen 137 percent over the past four years, in part due to Connecticut's high-profile trade presence in the country, with the international division of DED operating three offices there. “State representatives assist companies in finding a distribution agent or getting background on potential customers and other logistics,” says DED's Nathan Karnes. “There is also an office in Hong Kong, one in Taipei, and three sub-offices in the major economic regions of China.”
Taking advantage of the information and resources available to exporters is crucial for identifying markets and setting up a distribution system. This applies to service providers as much as manufacturers. For example, a trade conference in Hartford with key businesses leaders from Romania was co-sponsored by the CWTA to convey Romania's need for local providers of goods and services. Romania's move from a captive to a market economy created a need for high-tech upgrades to modernize its transportation infrastructure, marketing expertise to assist in expanding its export base, and managerial assistance from consulting and training companies to improve corporate and business efficiencies.
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