Commerce Secretary Gary Locke called upon small and mid-size companies to increase their profits and hasten the U.S. economic recovery by becoming more engaged in exports.
Only 1 percent of U.S. companies export, and of those that do 58 percent export to just one country, typically Mexico or Canada, Locke told the Asia Pacific Business Outlook conference Tuesday at the University of Southern California.
Companies hesitate to export for a host of reasons, such as concerns about getting paid from overseas customers, a lack of familiarity with other cultures and languages, and concern about securing financing.
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President Obama's National Export Initiative, which is being promoted by trade-oriented agencies such as the Department of Commerce and the Export-Import Bank, are ready to help companies overcome such obstacles, Locke said.
The President's export initiative seeks to double exports by 2015, and in order to do this, exports must increase at least 14 percent each year. Locke said the program is off to a good start, as exports last year increased 17 percent.
Exports are crucial to sustaining the economic recovery. Exports accounted for about half of the growth since the economic recovery began in mid-2009, Locke said. Exports account for 10 million U.S. jobs, including one of every three jobs in manufacturing and one of every five jobs in agriculture.
Wages in the export sector are typically 15 percent higher than in the overall economy, Locke added. Despite these benefits, many companies sell only in the domestic market, which accounts for just 5 percent of the world's consumers. Some 95 percent of their potential customers are outside the U.S.
The Obama administration, with provisions for accelerated depreciation for investments in plants and equipment in 2011, is encouraging businesses to expand their operations. The administration also proposes to reduce the time needed to secure a patent to one year from the average of three years, and is examining other areas where government regulation acts as a hindrance to exports.
Also, in line with the President's admonition to create the jobs of the future, the government stimulus program included about $100 million to promote development of jobs in the green economy.
"The country that leads in green energy will lead the global economy," Locke said.
-- Contact Bill Mongelluzzo at firstname.lastname@example.org.