Expanding California's Exports - Milken Institute
Expanding California's Exports - Milken Institute
Expanding California's Exports - Milken Institute
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California Center September 2012<br />
Strategies for<br />
<strong>Expanding</strong> California’s <strong>Exports</strong><br />
Kevin Klowden<br />
and Michael Wolfe
California Center September 2012<br />
Strategies for<br />
<strong>Expanding</strong> California’s <strong>Exports</strong><br />
Kevin Klowden and Michael Wolfe
ACknowlEdgmEntS<br />
The authors would like to thank State Controller John Chiang, his staff at the State Controller’s Office,<br />
and <strong>Milken</strong> <strong>Institute</strong> Director of Research Perry Wong for their feedback and support.<br />
About thE milkEn inStitutE<br />
A nonprofit, nonpartisan economic think tank, the <strong>Milken</strong> <strong>Institute</strong> works to improve lives around the world<br />
by advancing innovative economic and policy solutions that create jobs, widen access to capital, and enhance<br />
health. We produce rigorous, independent economic research—and maximize its impact by convening global<br />
leaders from the worlds of business, finance, government, and philanthropy. By fostering collaboration between<br />
the public and private sectors, we transform great ideas into action.<br />
© 2012 <strong>Milken</strong> <strong>Institute</strong>
ContEntS<br />
ExEcutivE Summary .................................................................................................................... 1<br />
introduction ................................................................................................................................. 3<br />
Why Export Promotion? ............................................................................................................. 4<br />
California’s Export Competitiveness .................................................................................... 4<br />
The Unique Case of Texas ......................................................................................................... 8<br />
The History of Export Promotion in California .............................................................. 10<br />
What Can California Do? ......................................................................................................... 10<br />
BESt PracticES for ExPort Promotion .................................................................... 13<br />
Best Practices in Other States ............................................................................................... 13<br />
Export Promotion in Other Countries ............................................................................... 19<br />
rEcommEndationS ................................................................................................................... 21<br />
Conclusion ................................................................................................................................... 22<br />
EndnotES ......................................................................................................................................... 23<br />
aBout thE authorS ................................................................................................................. 25
Just as the California economy grew in the post-World War II era, so has the state’s connection grown to the global<br />
economy and international trade. Not only does California have the largest economy of any state, but it retains the<br />
largest manufacturing base and level of agricultural production, not to mention a role in technology and design that is<br />
envied throughout the world. However, despite these advantages, the lack of a coherent trade policy when one existed<br />
combined with a lack of export growth in many of California’s key sectors have seen the state fall far behind Texas to<br />
second place among exporting states. Further, California’s export growth rate since 1998 has been less than half the U.S.<br />
national average.<br />
To address the key challenges facing California’s exports, we have recommended the following steps:<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
Take advantage of resources within the state<br />
Leverage private sector expertise<br />
Contract out foreign offices<br />
Create a comprehensive performance measurement system<br />
Develop targeted strategies for key export destinations<br />
Utilize metrics, research, and trade data<br />
exeCutive SuMMary<br />
Take advantage of national programs supporting export promotion<br />
Develop and execute a comprehensive export promotion strategy that affects statewide and international efforts<br />
By developing an effective strategy for coordinating and promoting exports, California has an opportunity to reinvigorate<br />
an important section of the state’s economy and improve the competitiveness of state businesses. With California<br />
opening its first foreign trade office since 2003 in China, an opportunity for action exists. But it is first necessary to<br />
examine where California has fallen behind, and what other states and countries can teach California.<br />
The decline of California’s relative position in exports is most starkly reflected when compared to Texas and other leading<br />
states that have implemented strong export promotion strategies. As can be seen in table 1, Texas has seen its exports<br />
grow more than three times as fast as California’s since 1998. Although Texas has benefited significantly from its proximity<br />
to Mexico and Latin America, especially after the implementation of the North American Free Trade Agreement (NAFTA),<br />
several other factors have come into play. As a result, Texas exported $249 billion in goods in 2011, compared to<br />
California’s $159 billion, and claimed a share of total U.S. exports comparable to what California enjoyed before the<br />
dot-com bubble burst in 2001.<br />
1
Strategies for expanding California’s exports<br />
2<br />
Table 1. Export growth, California vs. selected states<br />
State<br />
Percent growth<br />
(1998–2011)<br />
UNITED STATES 139%<br />
Texas 217%<br />
Alabama 181%<br />
Florida 165%<br />
Pennsylvania 157%<br />
California 66%<br />
Source: International Trade Administration.<br />
One of the most significant advantages Texas has over California is a strong perception of being a lower-cost, more<br />
business-friendly environment. However, the state has also used its strong links to Latin America, and even Canada,<br />
to create new markets for its goods, and has benefited from a more diversified set of industries for export. Even when<br />
Texas’ advantages are taken into account, California has underperformed as an exporter, as can be seen when comparing<br />
California to other states that have instituted export strategies.<br />
While California has repeatedly shifted its export strategies since opening its first overseas trade office in 1960, it has<br />
lacked any coordinated efforts since the abolition of the state Technology, Trade, and Commerce Agency in 2003.<br />
Meanwhile, Florida, Alabama, and Pennsylvania have implemented trade strategies that involve partnerships with private<br />
industry, overseas trade promotion, and trade assistance. Each has seen its exports grow twice as fast as California’s since<br />
1998. Massachusetts, like California, is a technology-dependent state that has performed below the national average in<br />
exports. However, Massachusetts recognized the weaknesses in its position and implemented a comprehensive trade<br />
strategy in 2010.<br />
Other examples of effective trade promotion and coordination can be found overseas. Germany and South Korea have<br />
the advantages of national coordination of their trade strategies and direct investment in export promotion, but they<br />
also have used tools California can adopt. In particular, Germany provided effective loan guarantees to even small and<br />
medium-sized enterprises engaged in exports, while South Korea did due diligence in identifying growing markets for<br />
goods and helping its companies to penetrate those markets. Taiwan and Hong Kong have been aggressive in promoting<br />
their goods in overseas markets and using their vast networks of overseas offices to help penetrate local markets. If size<br />
and cost are issues, it is worth noting that California has 38 million residents compared to Taiwan’s 23 million and<br />
Hong Kong’s 7 million.
California is one of the top exporters in the United States. In 2011, the state exported $159 billion in merchandise.<br />
Unfortunately, the state has been lagging most of the country in terms of growth for the past decade. While Governor<br />
Brown recently announced that California would open a trade office in China to help boost exports, this is only one small<br />
step and more must be done to ensure that the state maximizes its export potential. We looked at best practices in other<br />
states and prepared recommendations to help increase California’s business exports. We propose that the state:<br />
1. Take advantage of existing export promotion resources<br />
2. Create a synchronized export promotion agency<br />
3. Leverage private-sector expertise<br />
iNtrODuCtiON<br />
4. Open more (but well-targeted) trade offices and contract them out<br />
5. Build a comprehensive performance measurement system for export-promotion efforts<br />
6. Take advantage of national and local programs supporting export promotion<br />
7. Develop an effective and comprehensive trade-promotion strategy, following up on prior recommendations<br />
by the Department of Business, Transportation & Housing<br />
3
Strategies for expanding California’s exports<br />
Why Export promotion?<br />
Marketing and selling a product abroad poses challenges that businesses do not face when operating domestically.<br />
Firms are often unfamiliar with or unable to overcome these challenges because of the cost; overseas sales are especially<br />
difficult for small and medium-sized businesses (SMEs). 1 This is why governments often offer services that encourage<br />
and promote exports. 2 Export promotion has the potential to increase export growth and encourage businesses to<br />
start exporting or to expand into new markets. Export promotion is most commonly done at the national level, but<br />
increasingly state governments perform these tasks to some degree. 3 Currently, the majority of states in the U.S. have<br />
agencies and foreign trade offices involved in export promotion, but until very recently, not California. 4<br />
The main purpose of these agencies is to identify market opportunities and encourage existing companies, or attract new<br />
businesses, to provide a product to meet this demand. 5 Governments have tried a wide range of policies and programs<br />
to help companies export. The most basic of these activities begin with providing information on opportunities and<br />
emerging or compatible markets in other countries. However, export-promotion agencies may also take a far more direct<br />
approach, assisting with the design and implementation of marketing and sales initiatives. 6 Some of the most common<br />
activities export-promotion agencies engage in include:<br />
4<br />
•<br />
•<br />
•<br />
•<br />
•<br />
Information provision<br />
Export-related skills<br />
Domestic and foreign contacts<br />
Additional funding<br />
Trade exhibitions and foreign trade missions<br />
California’s Export CompEtitivEnEss<br />
California used to be the country’s largest exporter, but the state has been losing ground to Texas since 2002. In 2011,<br />
Texas exported $249 billion in merchandise compared to California’s $159 billion. 7 Table 2 shows that exports account for a<br />
greater proportion of Texas’ economy than California’s.<br />
Table 2. <strong>Exports</strong>, California vs. Texas<br />
2010 GDP $ (mil) GDP/capita $ <strong>Exports</strong>/GDP<br />
California 1,936,400 51,914 8.20%<br />
Texas 1,207,432 45,940 20.70%<br />
Sources: Bureau of Economic Analysis and International Trade Administration.
introduction<br />
As Texas and California are the nation’s largest exporters, comparing the two helps draw attention to how poorly<br />
California has performed over the past decade. Table 3 shows the percent growth of California’s exports against the<br />
national average, Texas, and other states recognized as having effective export promotion. (The strategies these states<br />
employ will be touched on later.)<br />
Billions of dollars<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
1998<br />
1999<br />
2000<br />
Source: International Trade Administration.<br />
Table 3. Export growth, California vs. selected states<br />
State<br />
Percent growth<br />
(1998–2011)<br />
UNITED STATES 139%<br />
Texas 217%<br />
Alabama 181%<br />
Florida 165%<br />
Pennsylvania 157%<br />
California 66%<br />
Source: International Trade Administration.<br />
2001<br />
Figure 1. State exports, totals, 1998 – 2011<br />
2002<br />
2003<br />
2004<br />
California’s export growth has been well below the national average over the past decade. (See table 3.) Compared<br />
to Texas’, California’s growth is abysmal. Figure 2 tells more of the story. While Texas experienced tremendous growth,<br />
California has been gradually losing its share of national exports. Texas’ current share is just about equal to what<br />
California’s was in 2001 (just before the technology sector collapsed).<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
CA<br />
TX<br />
5
Strategies for expanding California’s exports<br />
6<br />
18%<br />
16%<br />
14%<br />
12%<br />
10%<br />
Source: International Trade Administration.<br />
Figure 2. State share of total U.S. exports<br />
Figure 3 shows that California has failed to adequately diversify within the five largest export industries in the country. i<br />
Rather, the state’s exports are heavily concentrated in computers and electronics. California has benefited greatly from<br />
such exports, but this sector never fully recovered after the 2001 recession. (The state’s exports of computers and<br />
electronics are just now returning to their 2001 levels.) Goods from this sector composed more than half of California’s<br />
exports — far greater than the proportion represented in the national average and Texas. Because of this, Texas was far<br />
more protected when the industry contracted. California was hit quite hard.<br />
0.50<br />
0.45<br />
0.40<br />
0.35<br />
0.30<br />
0.25<br />
0.20<br />
0.15<br />
0.10<br />
0.05<br />
0<br />
8%<br />
6%<br />
4%<br />
2%<br />
0%<br />
1998<br />
1999<br />
Source: Moody’s Analytics.<br />
2000<br />
2001<br />
Figure 3. Top 5 export industries by proportion<br />
US - 1998 US - 2011 CA - 1998 CA - 2011 TX - 1998 TX - 2011<br />
i These are the five largest export categories in the United States and make up 60 percent of all exports.<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
CA<br />
TX<br />
Petroleum and<br />
Coal Products<br />
Chemical<br />
Machinery<br />
Computer and<br />
Electronics<br />
Transportation<br />
Equipment
Table 4. Indexed growth, top 5 export industries<br />
Indexed growth (1998–2011) CA TX<br />
Total 69.5 132.4<br />
Petroleum and coal products 39.2 108.6<br />
Chemical 98.8 129.4<br />
Machinery 80.8 108.3<br />
Computer and electronics 70.9 150.2<br />
Transportation equipment 82.9 116.2<br />
Source: Moody’s Analytics.<br />
introduction<br />
Table 4 shows the growth of exports in individual industries for California and Texas indexed to the nation’s growth.<br />
A score of 100 would indicate growth equal to that of the nation as a whole. California’s growth is below the national<br />
average in all five of the top export sectors, while Texas performs well above in all areas.<br />
Both the slowdown in semiconductor production in California and the rapid growth in petroleum products in Texas are<br />
quite telling; however, this industrial shift is not the only problem affecting the state’s exports. 8 A shift-share analysis<br />
helps to pinpoint areas where California is over- or underperforming. The shift-share analysis looks at three growth<br />
factors and isolates each. It examines how the nation’s overall growth (national share) affects a region, how the industrial<br />
composition (industry mix) of a region affects overall growth, ii and how the individual competitiveness (regional shift) of<br />
the region itself affects growth. Essentially, the regional shift is the unaccounted-for growth after the national share and<br />
industry mix components have been subtracted from the total growth.<br />
Table 5. Shift-share analysis of California and 3 other states, in millions of dollars<br />
National share Industry mix Regional shift<br />
Actual growth<br />
1998–2011<br />
California $133,671 -$20,059 -$50,231 $63,586<br />
Texas $109,895 $30,637 $30,427 $170,985<br />
Florida $34,088 -$4,662 $10,855 $40,304<br />
Alabama $8,878 -$903 $3,544 $11,521<br />
Source: Moody’s Analytics.<br />
ii A good example is how California was negatively affected by the 2001 economic contraction as it was disproportionately supported by the computer<br />
and electronics industry.<br />
7
Strategies for expanding California’s exports<br />
8<br />
Table 6. California shift-share analysis, in millions of dollars<br />
National share Industry mix Regional shift<br />
<strong>Exports</strong>: total $ (mil.) $133,671 -$20,059 -$50,231<br />
Petroleum and coal products $999 $12,629 -$8,726<br />
Chemical $5,700 $2,830 -$154<br />
Machinery $11,736 -$1,866 -$3,518<br />
Computer and electronics $63,504 -$44,156 -$18,875<br />
Transportation equipment $14,245 -$6,378 -$3,100<br />
Source: Moody’s Analytics.<br />
Table 5 shows a shift-share analysis of export growth for California, Texas, Florida, and Alabama. (Florida and Alabama<br />
have had impressive growth in part due to their export promotion.) The “national share” column shows what a state’s<br />
export growth would have been had it kept pace with the nation.<br />
The nation’s overall growth would have contributed more than $130 billion in export growth for California and<br />
$109 billion for Texas. However, California’s exports only grew $63 billion in value. 9 This is because the “industrial mix”<br />
and the state’s regional competitiveness both negatively affected California’s export total, reducing the potential export<br />
growth of the state.<br />
In addition, California’s slow export growth over the past decade was influenced by countrywide and global economic<br />
trends as well as poor export promotion. Semiconductors and aerospace components contributed significantly to the<br />
state’s export portfolio. Semiconductor production has largely shifted overseas, and aerospace production has been<br />
moved to a number of other states around the country (Texas in particular). 10,11 It’s not surprising that with the erosion of<br />
these industries California has struggled to grow its exports at the same pace as other states.<br />
If California’s industrial composition were closer to the national average, the state would have performed better.<br />
In addition, the shift-share analysis shows that the state is suffering from competitiveness problems as well. The<br />
“regional shift” column has California losing more than $50 billion in potential export growth due to specific regional<br />
characteristics. Texas on the other hand has more than $30 billion in export growth here due to its competitiveness (most<br />
likely the low cost of doing business in the state). To compete with a state like Texas, California needs a more efficient and<br />
effective export-promotion service that will help it overcome its inherent weaknesses.<br />
thE UniqUE CasE of tExas<br />
Although we cited Texas to illustrate California’s shortcomings, it is not a model that California should or can replicate. iii<br />
Texas has advantages that most states (especially California) will not be able to duplicate.<br />
While the low costs of running a business in the state have contributed to Texas’ success (indeed, many low-cost Southern<br />
states have shown appreciable growth in exports over the past decade), this is not the only factor. More importantly,<br />
Texas has benefited from the growth in Mexico’s economy. Texas accounts for 44 percent of all U.S. exports to Mexico, and<br />
Mexico accounts for 35 percent of Texas’ exports, far greater than any other single export destination (see figure 4). Table<br />
7 shows a shift-share analysis of the major export categories in Texas. Unlike California, Texas is regionally competitive in<br />
every one.<br />
iii Texas is one of the few states without an explicit export promotion agency. Most successful export states do engage in export promotion and have seen positive<br />
outcomes from it. Texas is a unique case.
Table 7. Texas shift-share analysis, in millions of dollars<br />
National share Industry mix Regional shift<br />
<strong>Exports</strong>: total $ (mil.) $109,895 $30,637 $30,427<br />
Petroleum and coal products $3,291 $41,616 $4,042<br />
Chemical $16,268 $8,078 $10,602<br />
Machinery $16,332 -$2,597 $2,113<br />
Computer and electronics $27,353 -$19,020 $14,049<br />
Transportation equipment $14,655 -$6,561 $3,009<br />
Source: Moody’s Analytics.<br />
Introduction<br />
NAFTA, Mexico’s growing economy, and the high prevalence of maquiladoras along the Mexico-Texas border are the<br />
primary reasons for Texas’ high share of exports to Mexico. The maquiladoras have played a critical role. 12 Maquiladora<br />
plants receive materials and components from the U.S. (often Texas) and process or assemble them to be shipped back<br />
to the United States as finished products. The cost of labor in the maquiladoras is extremely low. Mexico’s close proximity<br />
and the NAFTA accord have allowed U.S. firms (especially Texas ones) to take advantage of lower labor costs in the<br />
maquiladoras to reduce manufacturing expenses. 13<br />
California does not enjoy the same level of trade with Mexico as Texas. California’s exports to Mexico are only 13 percent<br />
of the national total, and exports to Mexico make up only 16 percent of all California exports. Texas relies on Mexico for<br />
much of its export growth, and California is not situated to compete with Texas in this area.<br />
4%<br />
9%<br />
Figure 4. Texas exports by destination Figure 5. California exports by destination<br />
4%<br />
3%<br />
3%<br />
4%<br />
Mexico<br />
All other destinations<br />
Canada<br />
China<br />
2% 2%2%<br />
2%<br />
Source: Moody’s Analytics.<br />
32%<br />
Brazil<br />
Netherlands<br />
South Korea<br />
Singapore<br />
35%<br />
Colombia<br />
Japan<br />
Belgium<br />
United Kingdom<br />
4.8%<br />
5.3%<br />
8.2%<br />
8.9%<br />
All other destinations<br />
Mexico<br />
Canada<br />
China<br />
2.6%<br />
2.6%<br />
2.9%<br />
3.3%<br />
3.9%<br />
10.8%<br />
Japan<br />
South Korea<br />
Hong Kong<br />
Taiwan<br />
16.3%<br />
30.3%<br />
Germany<br />
Netherlands<br />
United Kingdom<br />
Singapore<br />
9
Strategies for expanding California’s exports<br />
thE history of Export promotion in California<br />
California’s efforts to boost exports were the subject of much criticism before they were shut down in 2003. 14 However,<br />
this was due to poor execution, not because export promotion is ineffective. The state never took a strategic approach.<br />
Implementation was haphazard and often politically motivated. 15 Looking at the state’s history in this area illustrates why<br />
California needs a new, coordinated approach.<br />
Export promotion has a tumultuous history in California. The first foreign trade offices opened in London and Frankfurt in<br />
1960, 16 only to close in 1967 amid a budget crisis. In 1977, the state created the Department of Economics and Business,<br />
which would later become the Department of Commerce. This department contained the Office of International Trade,<br />
which had a broad mandate to promote trade and investment. 17 Five years later, in 1982, the California State World<br />
Trade Commission (CWTC) was established and given similar responsibilities. Soon after this, the Department of Food<br />
and Agriculture and the California Energy Commission set up programs to support trade in their respective sectors.<br />
Unfortunately, these efforts were not coordinated. This fragmented approach was inefficient and, arguably, ineffective.<br />
In 1993, the California Trade and Commerce Agency was established and merged the CWTC, the Department of<br />
Commerce, and the existing foreign trade offices (FTOs). The California Trade and Commerce Agency was later renamed<br />
the California Technology, Trade, and Commerce Agency (CTTCA), and additional FTOs were created between 1993 and<br />
2003. In addition to managing the foreign trade offices, the CTTCA was responsible for domestic activities and programs<br />
that continued to grow until the agency closed in 2003 during a budget crisis. 18<br />
The merging of so many programs prevented the CTTCA from operating effectively. Seemingly haphazard<br />
location choices for the foreign trade offices drew criticism. To make matters worse, the CTTCA did not track their<br />
accomplishments properly, which made it impossible to verify efforts and outcomes. 19 California has never had an<br />
effective, synchronized export strategy. Previous efforts failed because of their lack of focus, political issues, and a failure<br />
to follow best practices.<br />
What Can California Do?<br />
California does not have a centralized agency that facilitates trade promotion. Still, a number of uncoordinated activities<br />
continue. The surviving trade programs are administrative and will not help to improve California’s export industry. 20<br />
The state could benefit from a synchronized system of export promotion.<br />
The California economy has been especially hard-hit by the recent recession. Unemployment is unacceptably high, and<br />
few sectors have seen growth over the past couple of years. 21 However, the export industry has quickly recovered, and<br />
it is one of the few areas of growth in the state. 22 Californians need to take advantage of this growth and find ways to<br />
encourage and expand the export industry, as it will be a key factor in the state’s economic recovery. California has many<br />
advantages to build on. The state has the infrastructure as well as the cultural connections and proximity to Asia to be the<br />
leading export center of the United States.<br />
California has the world’s sixth-largest port by traffic volume iv and the largest in the United States. 23 In total, there are 11<br />
ports in California, and the Los Angeles International Airport is one of the busiest cargo airports in the world. 24 In addition,<br />
the state is close to and has cultural connections with many rapidly growing Asian markets. 25 Finally, although growth has<br />
stalled, California has been one of the largest exporters in the U.S. for many years and has access to tremendous expertise<br />
in this area. The key will be to use this knowledge to revitalize export growth in the state.<br />
Small and medium-sized businesses (SMEs) are vital to California’s economy, yet they perceive exporting as a high-<br />
risk endeavor. 26 SMEs make up slightly over 50 percent of California’s employment and more than 85 percent of all<br />
iv It is the sixth-largest port when counting the Long Beach and Los Angeles ports together.<br />
10
introduction<br />
establishments. Currently, close to 46 percent of California’s export value comes from SMEs. 27 This is impressive, but could<br />
be improved with more effective support. It takes considerable resources to expand into new foreign markets, and SMEs<br />
often do not have the capital to do it. Large corporations can afford to spend millions of dollars to engage in<br />
foreign trade.<br />
Cost is a competitive disadvantage for California, and the state will have to find creative ways to overcome this. In<br />
addition, many key industries in the state have contracted, which has affected the growth of exports. While good<br />
industrial policy is vital to export growth, an export-promotion agency and targeted foreign trade offices can help with<br />
these challenges as well as regulatory barriers.<br />
The International Monetary Fund (IMF) has forecast that 87 percent of world economic growth over the next five years<br />
will occur outside of the U.S. 28 This presents a great opportunity for the export industry in California, especially given<br />
how connected the state is to Asian markets. Additionally, within the same industry, firms that export tend to pay higher<br />
wages than firms focused solely on the domestic market. 29 Thus focusing on exports can help increase the number of<br />
good-paying middle-class jobs.<br />
Despite the potential that exports hold for California’s economy, the state does little to coordinate and encourage them.<br />
The Business, Transportation & Housing Agency is, in theory, in charge of export support. Unfortunately, its programs<br />
focus more on regulations, and this leaves California without a functional and synchronized export-promotion strategy.<br />
11
Strategies for expanding California’s exports<br />
12
BeSt praCtiCeS fOr<br />
expOrt prOMOtiON<br />
Even among those who endorse governmental support of exports, there is no consensus on the best way to accomplish<br />
the task. In almost all cases, the differing circumstance of each state demands a unique approach. Also, due to many<br />
factors, it is difficult to demonstrate a direct cause-effect relationship between export activity and promotion efforts.<br />
Compounding this problem, most export-promotion agencies have a poor record of tracking their own effectiveness.<br />
The California Business, Transportation & Housing Agency, through focus-group testing, found that the top barriers to<br />
exporting identified by businesses included 30 regulatory problems, access to capital, business development (companies<br />
had trouble finding partners abroad or making the required business connections), lack of internal resources and market<br />
knowledge, and the fragmented state of trade services offered in California. v When asked how the state could support<br />
exports, participants most frequently described an office that provides extensive services (closely resembling a foreign<br />
trade office). Also discussed was the need for the state to operate in a coordinating role, directing businesses to the<br />
appropriate existing services.<br />
The specifics of how an export-promotion agency is set up and run will be critical to long-term success. Any agency<br />
created in California should follow these criteria. It must take advantage of and synchronize the resources available in<br />
the state. There are trade organizations, state programs, and non-profit groups that focus on trade promotion to some<br />
degree. Unfortunately, these efforts are not coordinated.<br />
Additionally, the agency should tap private-sector expertise to keep staffing levels low and allow the program to be more<br />
flexible. Similarly, foreign trade offices should be contracted out, not run by state employees.<br />
The agency should be tasked with finding synergies between state and national export-promotion programs. One<br />
example is the newly created National Export Initiative (NEI). In recognition of the growing global demand for exports,<br />
the Obama administration recently created the NEI. The NEI focuses on trade promotion, helping with access to credit,<br />
and removing barriers to trade abroad. 31 The NEI program will provide further benefits to export promotion in California;<br />
already the state has been granted $2.5 million. vi<br />
In addition, most export-promotion efforts do not adequately track their impact, which makes identifying well-run<br />
programs difficult. Developing a comprehensive performance-measurement system is critical for any export-promotion<br />
initiative. 32 Finally, export-promotion strategies are often a response to political pressures instead of smart trade policy, a<br />
mistake to avoid repeating in California.<br />
BEst praCtiCEs in othEr statEs<br />
Figure 6 offers a brief description of states’ export-promotion activities that closely represent the principles identified<br />
above. These programs have been recognized by others as innovative or following best practices.<br />
v The absence of a dedicated foreign trade office was specifically cited as a concern and barrier.<br />
vi The program focuses specifically on SMEs. It will provide additional support (including greater access to credit through the Export-Import Bank) and increase the<br />
promotion of U.S. exports worldwide. The initiative will develop specific commercial strategies for emerging markets such as Brazil, India, and China. A state exportpromotion<br />
agency would help maximize support and build synergies with this national initiative.<br />
13
Strategies for expanding California’s exports<br />
Index, 1998=100<br />
140<br />
130<br />
120<br />
110<br />
100<br />
90<br />
80<br />
70<br />
60<br />
50<br />
Source: International Trade Administration.<br />
14<br />
1998<br />
Figure 6. Export growth in states with best practices<br />
Relative to national level<br />
All the states used as examples below have seen their exports grow faster than California’s. The growth in these states<br />
cannot be attributed solely to export promotion, but each state’s efforts in this regard have been effective. Figure 6 shows<br />
the five best-practice states discussed here and California’s export growth indexed against the average for the nation.<br />
The U.S. average is represented by the 100 mark on the index. Massachusetts’ growth rate has lagged the nation’s,<br />
but that state still outperforms California. Massachusetts is included here to show how a state similar to California is<br />
improving its export-promotion efforts.<br />
Florida<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
Florida’s export-promotion agency does a good job using the private sector to provide expertise. 33 The state’s export<br />
growth has been impressive. Figure 7 shows Florida’s export growth against the United States’ and California’s, with<br />
1998 = 100 on the index.<br />
Florida has a decentralized export-promotion strategy. Enterprise Florida (EFI) — the main economic development<br />
agency — coordinates promotion activities. Enterprise Florida provides companies with data, offers an easily searchable<br />
export directory, and heavily markets the state’s exporters. EFI is a public-private partnership that operates in conjunction<br />
with a statewide network of economic development agencies. Enterprise Florida runs 12 foreign trade offices and seven<br />
in-state offices. 34<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
CA<br />
AL<br />
MA<br />
PA<br />
FL
Index, 1998=100<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
Source: International Trade Administration.<br />
Figure 7. Export growth in Florida<br />
Best practices for export promotion<br />
However, the most interesting component of the state’s export-promotion efforts is the Florida Trade Partners Alliance<br />
(FTPA). The FTPA is a statewide group consisting of 23 organizations, each involved in the export industry. It was formed<br />
in 1997 by Enterprise Florida and the U.S. Export Assistance Centers of Florida, and it is unique in the country. The alliance<br />
provides assistance through a wide range of programs offered by its member organizations. With the creation of the<br />
FTPA, Enterprise Florida united and integrated the many different and isolated export initiatives in the state.<br />
Ultimately, what makes the organization effective is that all of the participating groups contribute funding to support<br />
the group. This money goes toward administrative and event expenses. It allows the Florida Trade Partners Alliance to<br />
increase the scale of its operations and the events it supports.<br />
massachusetts<br />
Massachusetts is the only state referenced here with export growth slower than the national average (see figure 8).<br />
However, it is still above California, and officials are taking steps to improve the state’s performance. Figure 8 shows<br />
Massachusetts’ growth indexed against the United States’. The state’s recent efforts focus on coordinating existing assets<br />
more effectively to boost exports.<br />
Index, 1998=100<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
Source: International Trade Administration.<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
Figure 8. Export growth in Massachusetts<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
US<br />
CA<br />
US<br />
CA<br />
FL<br />
MA<br />
15
Strategies for expanding California’s exports<br />
In 2010, the Massachusetts Technology Collaborative (a public economic development agency) released a detailed<br />
international strategy for the state, endorsed by the governor and with specific recommendations to increase exports.<br />
The report recommends that the Massachusetts Office of International Trade and Investment (MOITI), which was<br />
reinstated by Gov. Deval Patrick, be the coordinating body for export promotions. The report provides a blueprint<br />
for the development of a successful export-promotion policy with clear and manageable goals. Most importantly, it<br />
demonstrates how to string together Massachusetts’ export assets in a coordinated manner. 35<br />
The report states that “MOITI should serve as the Secretary’s lead agent and be responsible for day-to-day coordination<br />
and operations related to the strategy.” The report further clarifies roles and responsibilities among the relevant<br />
organizations in Massachusetts — assigning points of contact for activities involved in export promotion. The report<br />
identifies costs that can be reduced as well as areas suitable for expansion.<br />
Finally, the report points to local advantages that can help the state improve its export base and suggests small support<br />
programs (such as grants to SMEs) aimed at improving involvement in international activities. There are many similarities<br />
between California and Massachusetts. This report and Massachusetts’ ongoing efforts may prove a model for California.<br />
Alabama<br />
Alabama has seen a surge in export growth in the past decade. Many new businesses have opened operations in the<br />
state to take advantage of its low costs. The Alabama Development Office (ADO) runs the state’s export promotions.<br />
The ADO’s international trade office helps businesses through statewide professional trade-development programs.<br />
In addition, the office conducts targeted trade missions and publishes frequent reports. The ADO’s services are free, and<br />
the organization limits the scope of its activities by focusing on specific industry sectors. It chooses its sectors based on<br />
growth and potential. 36<br />
16<br />
Index, 1998=100<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
Source: International Trade Administration.<br />
Figure 9. Export growth in Alabama<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
The ADO’s international trade office is small but effective. Its services include information on key foreign markets,<br />
distribution of contacts and investment opportunities, marketing of Alabama businesses, and training to help companies<br />
navigate the global marketplace.<br />
US<br />
CA<br />
AL
Best practices for export promotion<br />
The Export Alabama Alliance is another key player. It is a network of trade agencies within Alabama, including the<br />
U.S. Chamber of Commerce and U.S. Department of Commerce Export Assistance Center, which provides coordinated<br />
assistance to companies. 37<br />
Pennsylvania<br />
Pennsylvania has created a comprehensive system to track the impact of its export promotions. 38 Most states do not<br />
adequately understand the effect their efforts are having. This has been a recurring problem in many export-promotion<br />
programs. In 2005, the Center for Trade and Development (CTD) in Pennsylvania worked to overcome this problem by<br />
instituting a detailed goal-assessment system.<br />
Five goals are measured. Among them are the number of firms served, the number of actions taken to help the client, and<br />
the number of companies that have reported export sales. These five goals are measured individually in each of the CTD’s<br />
regional partners and in its foreign office. The CTD sets the level it expects to achieve, and each partner is encouraged<br />
to meet these targets. The targets are unique to each partner and based on the level of funding or grant assistance they<br />
receive from the CTD. Finally, each partner is urged to excel in each measured area, and this is encouraged by an overall<br />
performance measure that tracks progress toward all the goals.<br />
Index, 1998=100<br />
300<br />
250<br />
200<br />
150<br />
100<br />
50<br />
0<br />
Source: International Trade Administration.<br />
Figure 10. Export growth in Pennsylvania<br />
1998<br />
1999<br />
2000<br />
2001<br />
2002<br />
2003<br />
2004<br />
2005<br />
2006<br />
2007<br />
2008<br />
2009<br />
2010<br />
2011<br />
The CTD’s efforts have, reportedly, been successful with a $60 return per dollar in the 2008–2009 fiscal year. 39<br />
The CTD can evaluate, very precisely, areas of weakness and determine which partners are not achieving the goals<br />
and on which measurements.<br />
US<br />
CA<br />
PA<br />
17
Strategies for expanding California’s exports<br />
18
Export promotion in othEr CoUntriEs<br />
Best practices for export promotion<br />
While many states in the U.S. now promote exports, for many years these activities were more common at the national<br />
level. Almost all countries promote exports to some degree. Below is a brief discussion of four countries whose<br />
promotions have led to notable economic success. Table 8 compares the U.S. with these countries in terms of both total<br />
export value and the export value’s percentage of GDP.<br />
Each of these countries stands out in its own way. Given the size of its economy, Singapore’s volume of exports is<br />
impressive. Similarly, Germany is in its own class in terms of the volume it exports relative to the size of its economy.<br />
With an economy only a fifth the size of the United States’, Germany exports almost as much in value. South Korea and<br />
Thailand have outstanding export records. Each country has focused on building its export base through targeted<br />
initiatives. While not all of their strategies can be replicated by California, each demonstrates that export promotion can<br />
produce impressive outcomes.<br />
germany<br />
Country<br />
Table 8. How the U.S. compares to four other countries in exports<br />
<strong>Exports</strong> as<br />
% of GDP<br />
Total export value<br />
2011 (US$ billions)<br />
GDP 2011<br />
(US$ billions)<br />
United States 9 1,480 15,040<br />
Germany 46 1,408 3,085<br />
South Korea 36 557 1,549<br />
Hong Kong 130 427 350<br />
Singapore 130 409 314<br />
Sources: CIA World Factbook and World Bank development indicators.<br />
Not all of Germany’s success is due to export promotion. The nation has benefited from its excellence in high-value<br />
manufacturing (particularly in machinery and transportation equipment). This has allowed Germany to enter developing<br />
and emerging markets. In addition, the country’s proximity to Eastern Europe has allowed it to tap into a cheaper labor<br />
force. However, Germany has also made improving and maintaining its level of exports a governmental priority.<br />
The main agency that addresses export-related issues in Germany is the Office of Economics and Export Control, and as<br />
the name would indicate the agency understands that exports are critical to economic health. The Office of Economics<br />
and Export Control supports small and medium-sized companies through grants and export funding. The agency also<br />
works closely with the Federation of German Industries (BDI), the main trade association, to represent and promote<br />
German companies abroad. In addition, BDI maintains a worldwide network of liaison offices. These offices help BDI’s<br />
member companies make contacts abroad and reduce risks associated with exporting. 40<br />
One example of BDI’s role was its response to financing constraints caused by the global recession. BDI lobbied the<br />
federal government, encouraging it to provide greater liquidity to exporters. This helped to offset the dearth of financing<br />
from banks.<br />
South korea<br />
Over the past 50 years, South Korea has experienced remarkable economic growth. Much of this is linked to the<br />
development of its export industry. South Korea’s exports in 1963 were $87 million. In 2011, they were $557 billion.<br />
Beginning in the mid-1960s, the government targeted the textiles and garment industry (an area in which South Korea had<br />
a competitive advantage) for export promotion, offering tax incentives for exporters. In the 1980s, the government began<br />
to promote research and development, and the nation saw an increase in the export of high-technology electronics. 41<br />
19
Strategies for expanding California’s exports<br />
The Seoul government developed a long-term strategy based on exports to help revitalize the nation’s economy.<br />
The government’s promotions included tax incentives, financial inducements, free-trade zones, and support for trade<br />
organizations. On top of this, the government worked with developing countries to open new markets for its exports.<br />
Some calculations put the government’s early support of exports at 31 percent of total export cost, a subsidy that has<br />
paid off over the years. 42<br />
hong kong<br />
Hong Kong’s exports have in part been driven by the success of its economy. As in many thriving Asian economies, the<br />
early years of economic growth were fueled by the garment and clothing industry. The government operates 11 overseas<br />
trade offices and three in China. Hong Kong also has a strong trade agency, the Hong Kong Trade Development Council<br />
(HKTDC), with which the government works closely. HKTDC has over 40 offices around the world. The organization is<br />
governed by a 19-member council of government officials and business leaders. The council runs an online marketplace<br />
where buyers have easy access to suppliers, and it publishes more than 15 product magazines that promote Hong<br />
Kong companies. HKTDC also publishes research reports on its industries and has resources aimed at SMEs. 44 Finally, the<br />
country has almost no tariffs or excise taxes on goods moving through its ports. This has made it an attractive location<br />
for multinational firms.<br />
Singapore<br />
Singapore’s story is somewhat similar to South Korea’s. In the late 1960s, Singapore turned to exports to help the country<br />
industrialize. Manufacturers that planned to export were granted lower tax rates. Singapore quickly became attractive<br />
to multinational companies seeking to invest in Asia. Additional policies aimed at promoting exports helped boost the<br />
country’s output.<br />
The Singapore government has constantly adapted its export strategy to remain competitive. The current exportpromotion<br />
agency, International Enterprise Singapore, was rebranded in 2002 and represents a shift away from pure<br />
export promotion toward the development and overseas growth of Singapore companies. International Enterprise<br />
Singapore has more than 35 overseas offices in 20 countries. 43<br />
taiwan<br />
Taiwan, like all of the Asian tiger economies, achieved its economic growth through trade. Taiwan has a large and welldeveloped<br />
apparatus to promote exports. Most of the state’s operations are centralized and run by the Taiwan External<br />
Trade Development Council (TAITRA). TAITRA is a non-profit organization, sponsored by government, trade associations,<br />
and some commercial organizations. <strong>Exports</strong> from Taiwan grew more than 12 percent from 2010 to 2011. 45 TAITRA’s<br />
initiatives and trade offices are largely responsible for this growth.<br />
TAITRA runs 46 trade offices abroad and has an additional ten offices in mainland China. Combined, these offices serve as<br />
a globalized trade network for Taiwan and help Taiwanese companies explore foreign markets before investing in them. 46<br />
TAITRA’s foreign offices assist the head office with trade missions and exhibitions, initiate contact between buyers and<br />
sellers, and support Taiwanese companies seeking to expand their trade operations.<br />
TAITRA has been expanding its reach into emerging markets through trade missions and business-talent incubation<br />
programs. China has also been courted with more than seven trade fairs in 2011. Finally, through TAITRA, Taiwan had a<br />
presence at over 30 major international trade exhibitions, ensuring that the state’s economic ties with the developed<br />
world continue to grow.<br />
Lastly, Taiwan recently signed an agreement with China that will allow more than 500 products made in Taiwan to enter<br />
China with low or no tariffs applied. Taiwan is exploring a similar agreement with Singapore. 47<br />
20
As mentioned, California is one of the few states in the country that does not have an office devoted to foreign trade.<br />
The California Trade, Technology and Commerce Agency failed (political problems aside) because its efforts were not<br />
based on best practices. Looking to what others have identified as effective mechanisms for export promotion, we<br />
recommend a set of strategies that any new agency in California should follow.<br />
1. take advantage of existing resources within the state.<br />
•<br />
•<br />
California has a wide range of programs and services that support exports and are tailored to the state’s<br />
businesses and industries. Any new program should position itself to enhance and supplement what is<br />
already offered. Duplicating available activities would be wasteful (particularly in light of the state’s current<br />
budget situation).<br />
The export agency should be responsible for coordinating the many programs offered now, to help businesses<br />
to find the ones they need. In addition, the quality of these programs differs considerably.<br />
2. take advantage of private-sector expertise.<br />
•<br />
•<br />
•<br />
In a comprehensive review of other nations’ export-promotion agencies, the World Bank found that the most<br />
successful programs had a large portion of their boards represented by private executives, with public funding<br />
backing the operation. (Critics had questioned the expertise of the CTTCA staff.) Working with the private sector<br />
would give an agency a wider knowledge base. 48<br />
Most agencies should retain a small number of staff to handle coordination and run daily operations.<br />
The model of the Export-Import Bank should be examined to create a template for export promotion similar to<br />
the California Infrastructure Bank. Establish a public-private partnership for funding, drawing on the example of<br />
Germany, where the primary trade association is directly involved in export promotion.<br />
3. Contract out foreign offices.<br />
•<br />
•<br />
•<br />
It has been shown that contracting out the operations of foreign offices reduces operating costs. The practice is<br />
becoming more common, with many U.S. states and Canadian provinces taking this path. 49 This also creates the<br />
option of hiring private talent, which might not normally be available at public-sector wages.<br />
Many of the foreign offices operated by the CTTCA were contracted out. It is impossible to say which<br />
arrangement worked better for the CTTCA, but there is a precedent for this approach.<br />
Larger markets may warrant a fully staffed office.<br />
4. Create a comprehensive performance-measurement system.<br />
•<br />
•<br />
reCOMMeNDatiONS<br />
One of the difficulties in assessing the value of export promotions is that few offices track their achievements<br />
adequately. Doubts about results plagued the CTTCA and led to an increasingly skeptical public perception of<br />
the organization.<br />
Any export-promotion agency needs up-to-date market analysis so it can respond quickly to new challenges.<br />
21
Strategies for expanding California’s exports<br />
22<br />
•<br />
•<br />
•<br />
Agencies must also track their own performance so they can make adjustments and operate in a cost-effective<br />
and useful manner.<br />
Recommended performance metrics include companies served, deals signed, export-related jobs created (and<br />
existing), newly created export sales, and tax receipts from export promotions.<br />
The amount of money states and nations spend on export promotion varies widely. In the United States, it ranges<br />
from a few hundred thousand to over $20 million. Research has found that there are diminishing returns when it<br />
comes to export promotion. 50 It is important that any export effort in California is not under- or<br />
over-funded.<br />
5. develop targeted strategies for key export destinations, utilizing<br />
metrics, research, and trade data.<br />
•<br />
•<br />
•<br />
Review trade data for the past decade to determine which countries show the most promise for continued<br />
growth in importing goods from California.<br />
Determine preferences in key markets for goods that are currently being exported from areas other<br />
than California.<br />
Survey businesses exporting or intending to export goods to key overseas markets to determine the key barriers<br />
to entry or expansion they face that can be assisted by state-coordinated efforts.<br />
6. take advantage of national programs.<br />
•<br />
•<br />
The federal government is pushing exports as a way to rejuvenate the economy. California can take advantage of<br />
new programs at the federal level to help bolster its own export efforts.<br />
The National <strong>Exports</strong> Initiative and the State Trade and Export Promotion (STEP) program run by the Small<br />
Business Administration (SBA) could be valuable sources of funding and resources.<br />
7. develop and execute a comprehensive export-promotion strategy that<br />
affects statewide and international efforts.<br />
•<br />
•<br />
The Business, Transportation & Housing Agency, which currently manages the state support programs for<br />
international trade and investment, has suggested that if a new export strategy is developed it should link<br />
“international trade and investment programs to a comprehensive economic development strategy.” 51<br />
In addition, a new California agency could protect and represent California’s export interests at the national level.<br />
ConClUsion<br />
Export promotion is effective and relatively easy to implement. Despite the devastating effects of the recession, California<br />
exports continue to grow. A more synchronized approach to export promotion could be beneficial. Countries such as<br />
Germany and Taiwan have shown clear benefits from providing export finance assistance and promoting international<br />
trade. States with comprehensive trade policies have continued to see a rise in their exports at a higher level than<br />
California and the national average. California has already shown it is strongly connected to economies in Europe and<br />
Asia. It needs to position itself and its businesses to more effectively benefit from these connections.
1. Nathan Associates Inc. “Best Practices in Export<br />
Promotion,” technical report, April 2004.<br />
2. International Encyclopedia of the Social Sciences, 2nd<br />
edition. Macmillan Reference USA, November 2007.<br />
3. State International Development Organization (SIDO).<br />
State Trade Directory. http://www.sidoamerica.org/<br />
State-Trade-Directory.aspx (accessed May 20, 2012).<br />
4. Los Angeles Times. “California to open two trade<br />
offices in China,” February 17, 2012. http://articles.<br />
latimes.com/2012/feb/17/news/la-california-tradechina-20120217<br />
(accessed May 20, 2012).<br />
5. United Nations. “Introduction to Export Promotion.”<br />
http://www.unescap.org/tid/publication/tipub2107_<br />
chap3.pdf (accessed February 24, 2012).<br />
6. Koehler, Gus. “California Trade Policy,” California<br />
Research Board, November 1999.<br />
7. International Trade Administration. http://tse.export.<br />
gov/TSE/TSEhome.aspx (accessed February 24, 2012).<br />
8. Kleinhenz, Robert, et al. “International Trade Outlook<br />
Southern California, 2012–2013,” Los Angeles County<br />
Economic Development Corporation, May 2012.<br />
9. International Trade Administration. http://tse.export.<br />
gov/TSE/TSEhome.aspx (accessed February 24, 2012).<br />
10. Platzer, Michaela. “U.S. Aerospace Manufacturing:<br />
Industry Overview and Prospects,” Congressional<br />
Research Service, December 2009.<br />
11. Government Accountability Office. “U.S.<br />
Semiconductor and Software Industries Increasingly<br />
Produce in China,” Report to Congressional<br />
Committee, September 2006.<br />
12. Vargas, Lucinda. “Maquiladoras: Impact on Texas<br />
Border Cities,” Federal Reserve Board of Dallas, June<br />
2001. http://67-208-42-166.neospire.net/research/<br />
border/tbe_vargas.pdf (accessed February 22, 2012).<br />
eNDNOteS<br />
13. Ibid.<br />
14. Bonner, Dale E., and Garrett P. Ashley. “Toward a<br />
California Trade and Investment Strategy,” California<br />
Business, Transportation & Housing Agency,<br />
October 2007.<br />
15. Koehler, Gus. “California Trade Policy,” California<br />
Research Board, November 1999.<br />
16. Smurr, Douglas. “California Adrift Internationally:<br />
Resetting Course of the 21st Century,” Journal of<br />
International Business and Cultural Studies, Vol. 3,<br />
May 2010.<br />
17. Ibid<br />
18. Ibid.<br />
19. Koehler, Gus. “California Trade Policy,” California<br />
Research Board, November 1999.<br />
20. Hoffman, Megan, et al. “Advancing California’s<br />
Competitiveness Through Trade,” Loyola Marymount<br />
University, May 2011.<br />
21. Sidhu, Nancy, et al. “2011–2012 Economic Forecast<br />
and Industry Outlook,” Los Angeles Economic<br />
Development Council, February 2011.<br />
22. International Trade Administration. http://tse.export.<br />
gov/TSE/TSEhome.aspx (accessed February 24, 2012).<br />
23. World Shipping Council. http://www.worldshipping.<br />
org (accessed May 15, 2012).<br />
24. Airport Information: Statistics.<br />
http://www.lawa.org/welcome_lax.aspx?id=798<br />
Los Angeles World Airports (accessed May 20, 2012).<br />
25. CAEDC Asia report<br />
26. Sidhu, Nancy et al. “Growing Together: China and Los<br />
Angeles County,” Los Angeles Economic Development<br />
Council, 2011.<br />
23
Strategies for expanding California’s exports<br />
27. “California: <strong>Exports</strong>, Jobs and Foreign Investment,”<br />
International Trade Administration, March 2012. http://<br />
www.trade.gov/mas/ian/statereports/states/ca.pdf<br />
(accessed May 15, 2012).<br />
28. International Trade Administration.<br />
“National Export Initiative,” http://trade.gov/nei/<br />
(accessed February 20, 2012).<br />
29. “Report to the President on the National Export<br />
Initiative,” September 2010. http://www.whitehouse.<br />
gov/sites/default/files/nei_report_9-16-10_full.pdf<br />
(accessed May 20, 2012).<br />
30. Bonner, Dale E., and Garrett P. Ashley. “Toward a<br />
California Trade and Investment Strategy,” California<br />
Business, Transportation, & Housing Agency,<br />
October 2007.<br />
31. “Report to the President on the National Export<br />
Initiative,” September 2010. http://www.whitehouse.<br />
gov/sites/default/files/nei_report_9-16-10_full.pdf<br />
(accessed May 20, 2012).<br />
32. Katz, Bruce, and Emilia Istrate. “Boosting <strong>Exports</strong>,<br />
Delivering Jobs and Economic Growth,” Brookings<br />
<strong>Institute</strong>: Project on State and Metropolitan Growth,<br />
January 2011. http://www.brookings.edu/research/<br />
papers/2011/01/26-exports-katz-istrate (accessed<br />
February 20, 2012).<br />
33. Ibid.<br />
34. Enterprise Florida. http://www.eflorida.com/<br />
ContentSubpage.aspx?id=206<br />
(accessed May 20, 2012).<br />
35. Massachusetts Technology Collaborative. “An<br />
International Strategy for Massachusetts. A report for<br />
the Executive Office of Housing and Development,”<br />
July 2010. http://www.masstech.org/international/<br />
international_for_press.pdf (accessed May 20, 2012).<br />
36. Alabama Development Office. http://www.ado.<br />
alabama.gov (accessed February 24, 2012).<br />
37. Hoffman, Megan, et al. “Advancing California’s<br />
Competitiveness Through Trade,” Loyola Marymount<br />
University, May 2011.<br />
38. Center for Trade and Development. http://<br />
www.newpa.com/build-your-business/exploreinternational-opportunities/trade/promotion<br />
24<br />
39. Katz, Bruce, and Emilia Istrate. “Boosting <strong>Exports</strong>,<br />
Delivering Jobs and Economic Growth,” Brookings<br />
<strong>Institute</strong>: Project on State and Metropolitan Growth,<br />
January 2011. http://www.brookings.edu/research/<br />
papers/2011/01/26-exports-katz-istrate (accessed<br />
February 20, 2012).<br />
40. Federal Office of Economics and Export Control<br />
(BAFA). “Trade Promotion.” http://www.bafa.de/bafa/<br />
en/trade/index.html (accessed May 7, 2012).<br />
41. Mah, Jai S. “Export Promotion Policies, Export<br />
Composition and Economic Development of Korea,”<br />
Law and Development Review, Vol. 4, Issue 2, 2011.<br />
42. Ibid.<br />
43. International Enterprise Singapore.<br />
“Driving Singapore’s External Economy.”<br />
http://www.iesingapore.gov.sg/wps/portal<br />
(accessed May 7, 2012).<br />
44. Hong Kong Trade Development Council (HKTDC).<br />
“About HKTDC.” http://www.hktdc.com/mis/ahktdc/<br />
en/s/abt-hktdc-about.html (accessed May 7, 2012).<br />
45. Branding Taiwan. “About TAITRA.”<br />
http://www.brandingtaiwan.org/AboutUsEN/TAITRA<br />
(accessed May 7, 2012).<br />
46. TAITRA. “TAITRA Services.” http://www.taitra.com.tw/<br />
services_01.asp (accessed May 7, 2012).<br />
47. Ibid.<br />
48. Lederman, Daniel, et al. “Export Promotion Agencies:<br />
What Works and What Doesn’t,” World Bank Policy<br />
Research Working Paper 4044, November 2006.<br />
49. Lederman, Daniel, et al. “Export Promotion Agencies:<br />
Do They Work?” Journal of Development Economics,<br />
Vol. 91, Issue 2, March 2010.<br />
50. Ibid.<br />
51. Bonner, Dale E., and Garrett P. Ashley.<br />
“Toward a California Trade and Investment Strategy,”<br />
California Business, Transportation, & Housing Agency,<br />
October 2007.
aBOut tHe autHOrS<br />
Kevin Klowden is director of the California Center at the <strong>Milken</strong> <strong>Institute</strong>, where he also serves as managing economist in<br />
the research group. He specializes in the study of demographic and spatial factors (the distribution of resources, business<br />
locations, and labor), how these are influenced by public policy, and how they in turn affect regional economies. Klowden<br />
has addressed the role of technology-based development in publications such as “North America’s High-Tech Economy”<br />
and in location-specific studies on Arkansas and Arizona. In addition, he oversaw the year-long Los Angeles Economy<br />
project, which examined key workforce and economic development issues in Los Angeles. Klowden was the lead author<br />
of “Film Flight: Lost Production and Its Economic Impact in California” and “The Writers’ Strike of 2007–2008: The Economic<br />
Impact of Digital Distribution,” both of which analyze the changing dynamics of the entertainment industry. He has also<br />
written on the role of transportation infrastructure in economic growth and job creation in reports such as “California’s<br />
Highway Infrastructure: Traffic’s Looming Cost” and “Jobs for America: Investments and Policies for Economic Growth and<br />
Competitiveness,” as well as in several publications including The Wall Street Journal. Klowden earned an M.A. in economic<br />
geography from the University of Chicago and an M.S. in politics of the world economy from the London School<br />
of Economics.<br />
michael Wolfe is a research analyst at the <strong>Milken</strong> <strong>Institute</strong>. He is interested in regional and economic development,<br />
transportation issues, as well as innovation and growth. Previously, Wolfe was at the Martin Prosperity <strong>Institute</strong> in Toronto<br />
where he worked on the Ontario in the Creative Age project, which set out to define the province’s future economic<br />
and growth prospects. He has also been involved in a number of other projects looking at the innovative capacity and<br />
competitiveness of regions. Wolfe recently completed his master’s degree in urban planning from the University of<br />
California, Los Angeles. Before that he studied at Queen’s University in Kingston, Ontario, where he graduated with a<br />
bachelor’s degree in economic geography.<br />
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