As President Obama travels across the country talking to small and medium sized enterprises (SMEs), emphasizing their importance for the country to return to sustained, economic growth, one area that could prove to be a lifeline: introducing our SMEs to the opportunities which exist in the emerging markets, particularly in Latin America.
Obama Administration officials and economists across the board agree that our SMEs are the real engine of growth for our economy. They increase competitiveness and innovation, but most of all, they create jobs. The U.S. and Latin America share history, culture--and a hemisphere. So I ask: why are we not doing more to promote business relations between our SMEs and Latin America? And, here's why I think it is important.
It is no secret that SMEs have trouble moving into foreign markets. Credit, language, weak intellectual property protections, and lack of support from the various institutions that should be promoting and helping our SMEs, all add up to a failed initiative to help them move comfortably into foreign markets. While the Department of Commerce does offer some assistance for them to expand their exports, very few know about it.
If you look at the government's export website, Latin America is not even listed as a "Prominent Market" while Africa, India and China are. And according to the Department of Commerce, the majority of SMEs do not have a formal export strategy and 58 percent export to only one market. These numbers are inexcusable! Even after President Obama announced his goal of doubling our exports in order to promote job growth, SMEs--which drive recovery, are left to their own devices to research and expand their export strategy to Latin America.
Why Latin America should be a focus: it is expected to see overall growth reach 4.5 percent this year. Brazil, Chile, Colombia, Mexico and Peru have all expanded access to new markets and partners. The growing demand for goods for an explosive middle class is reaching a feverish pitch, and yet our SMEs are losing opportunities and ground in the region. Now, more than ever, Latin America is embracing globalization and integration and seeking new partners. The region is on track for steady growth and it is the responsibility of our leaders to make sure our SMEs have the tools and institutional support they need to keep up and expand their market access throughout the hemisphere.
The Latin America of today is not the Latin America of the 1980's. Latin America has come a long way from their "lost decade" and has embraced fiscal responsibility and structural reforms. Today, most Latin American countries have healthy and disciplined financial markets, low inflation, a rising middle class, floating currencies, thriving democracies and stronger-than- ever institutions. These emerging markets are perfect for our SMEs to flourish.
If the President wants to meet his export goals and have sustainable growth, here is a region that has largely felt the cold shoulder of Washington for decades, but is willing to take business relations to another level.