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Exports: Turning the Table

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A glimpse into the future of the economy in Central Upstate New York and similar areas across the U.S. could come from two Syracuse-area companies that would seem to have nothing in common.

Inficon is a Swiss-owned high-tech corporation that produces innovative instrumentation, critical sensor technologies, and advanced software to develop products like the smartphone or tablet you may be using to read this right now.

Cathedral Candle is definitely not a high-tech company. It's a proud fourth-generation, family-owned candle manufacturer that's been based in the same working class Syracuse neighborhood for over 100 years.

Inficon almost exclusively employs people with advanced degrees. Half of Cathedral Candle's workforce comes from immigrant and refugee communities that live within blocks of the business.

Both of these manufacturers are growing, however, in an older industrial region thanks to a common strategy for success: exports.

For much of the last 50 years, the world has been growing at the expense of the American middle class consumer, as we have imported far more than we have exported. With a new middle class emerging in countries such as Brazil, Korea, India and China, we have an opportunity to turn the table.

Global competition is often blamed for many of the woes within the Central Upstate region over the past few decades. Like most regions of the U.S., Central Upstate has seen its fair share of large industrial employers move operations to other countries. Inficon and Cathedral Candle, however, have found ways to make global markets work in their favor, and their examples may light a path to success for countless other companies.

With 95 percent of the world's consumers living outside of the U.S., there is plenty of untapped potential when it comes to exports. Places like Central Upstate New York seem built for global competition: a rich history of innovation, competitive costs, infrastructure that's close to key shipping hubs, not to mention the Canadian border. Mix in a high level of talent (35 colleges and universities, 140,000 college students, and a large pool of skilled workers) and it's easy to see how this region is well positioned to profit within the global marketplace.

It's this dynamic that brought together CenterState CEO, a 12-county Syracuse-based business leadership organization, and the Brookings Institution to partner on Brookings' Metropolitan Export Initiative (MEI). Brookings initiated the MEI to help individual regions customize local strategies that contribute to a national goal to double exports over the next five years. Central Upstate New York was one of the first five communities to partner with Brookings to make it happen.

"The MEI is designed to unleash the enormous, untapped export potential in U.S. metropolitan areas, where the bulk of national economic activity takes place," says Brad McDearman, of the Brookings Institution. "The nation's ambition to grow jobs through exports relies upon metro area leaders leveraging their unique industry clusters, assets, and on-the-ground business relationships."

The Central Upstate MEI proposes three core strategies to grow the region's exports by more than $3 billion over the next five years:

  1. Increase export activity of the region's top exporters. Eighty-percent of the regions exports are delivered by 20-percent of its exporters. Companies that understand how to penetrate foreign markets are often the best prepared to expand further into new markets.
  2. Build export capacity of small and medium-sized enterprises. Small businesses are driving growth in our region and across the country, but they are often ill-equipped to enter complex global markets. Developing individual export plans, connecting these firms to export assistance services and pairing them with experienced exporters will help them further increase their capacity for sustained growth and success.
  3. Expand exports of the region's key service providers. With nearly 7 in 10 jobs in this region in the service sector, we must focus on exporting more than goods. Businesses and organizations that aren't often considered traditional exporters hold the potential to drive high value growth. As examples, colleges and universities can attract more foreign students and the region's hospitals are well suited to attract medical tourism.

This support structure will help businesses that have never exported consider new markets for the first time. Ultimately it's going to be individual businesses, developing their own customized export strategies that will make this work. By prioritizing exports at a regional level, our goal is to accelerate that process.

Companies like Inficon and Cathedral Candle, which have found paths to new growth by shipping to other countries, remain the exception. Today, the Syracuse metropolitan area has $3.3 billion in annual economic activity from exports. The U.S. Department of Commerce estimates that every $1 billion of economic activity from exports supports 5,000 jobs. Using that figure, if regional exports double, it will create 16,500 new jobs in five years.

That's the equivalent of opening a new automobile factory every year, for five years, developing and strengthening a range of jobs among new and existing companies -- from global high-tech firms to century-old manufacturers.

Our regional export strategies certainly won't fix all of the problems, economic, or otherwise, that have unfolded over decades, but as our domestic markets experience modest growth, tapping into fast growing markets in developing countries around the world will help to drive new wealth and high quality jobs for our communities. It's a pro-active, market-based solution to one of the most vexing challenges for Central Upstate New York: How do we best leverage our industrial past in order to create a successful post-industrial future?