Metros at the Vanguard of Exports and Trade: Delivering the Next U.S. Economy @BrookingsMetro @Amy_Liuw NASBITE International Conference | Memphis, TN � Metropolitan Policy Program April 3, 2014 at BROOKINGS
The Economic Recovery Remains Slow Employment Change During Recession and Recovery � Change since initial quarter of recession 1981 Recession 10,000,000 1990 Recession 5,000,000 2001 Recession 0 Great Recession -5,000,000 -10,000,000 Quarters: 4 8 12 16 20 24 Source: Brookings analysis of Moody’s Analytics data.
The Economic Recovery Remains Slow Income Growth During Recovery � Employment Recovery By Metro Area � As of June 2013 2009-2012 Recovered Metros Unrecovered Metros Top 1 Percent Bottom 99 Percent Source: Saez and Piketty, “ The Evolution of Top Incomes in the United States,” 2013. Source: Brookings, “MetroMonitor,” September, 2013.
Traded Sectors Are Key to High Quality Economic Growth 2% = job growth in the U.S. between 1990-2008 from tradable sectors Traded Manufacturing Local Jobs Job Source: Ezell, Stephen and Robert Atkinson, 2012, “Fifty Ways to Leave Your Source: Michael Spence, “The Evolving Structure of the American Economy and the Competitiveness Woes Behind,” ITIF. Employment Challenge,” Council on Foreign Relations, 2011.
We Need New Growth Strategies CONSUMPTION M A N U F A C T T U R I N G N ADVANCED CONSUMPTION E R&D DEBT C M S CONSUMPTION T O E M N T DEBT DEBT INFRASTRUCTURE ENERGY DEBT S S U E CONSUMPTION M H V U DEBT M EXPORTS R&D P D A E DEBT N N B T T DEBT I C I A HUMAN CAPITAL O P DEBT I T A N L CONSUMPTION EXPORTS O CONSUMPTION P P C R&D O DEBT O R T N DEBT DEBT U S N I U CONSUMPTION T Y M STEM P T DEBT I O N
We Must Adapt to New Macro Forces Demographic Revolution Demographic Revolution Greater Global Integration Greater Global Integration Disruptive Technologies Disruptive Technologies 24.5% of the workforce will McKinsey Global Institute: Global Exports Value reach retirement age by 2030 $33 trillion (2009-2011, trillions) /YEAR $17.8 global economic impact of 12 $14.9 technology platforms by 2025 $12.4 53.7% of the population will be minority by 2030
1 2 2 3 3 1 Why Export?
Rapid Urbanization is Fueling the Growth of a Global Middle Class Since 1950 the global urban population has tripled in size , and will reach 5 billion by 2030 5.0 b $ trillion 21 3.6 b global middle class consumption in 2000 0.8 b 2010 2030 1950 Source: OECD Source: United Nations, World Urbanization Prospects, 2011
Rapid Urbanization is Fueling the Growth of a Global Middle Class Since 1950 the global urban population has tripled in size , and will reach 5 billion by 2030 5.0 b $ trillion 31 3.6 b global middle class consumption in 2020 0.8 b 2010 2030 1950 Source: OECD Source: United Nations, World Urbanization Prospects, 2011
Growth Markets Are Increasingly Located Outside of the U.S. Global Middle Class Consumption Share by Region, 2000-2050 US Mexico Canada EU Japan Other India China Yr: 2011 Yr: 2030 85% 25% 15% 75%
Exports Have Driven the Bulk of U.S. Economic Growth Exports Share of U.S. GDP Growth � 2010-2011 5,600 46% total jobs created for every $1 billion in exports Source: International Monetary Fund, Direction of Trade Statistics (December 2012), Emilia Istrate Source: International Trade Administration, “Jobs Supported by Exports: An Update,” March 2013. and Nick Marchio, “Export Nation 2012,” Brookings, 2012.
Metro Economies and Firms Benefit From Global Trade U.S. Manufacturing Firms Revenue Growth � 2005-2009 Exporting Non-Exporting Source: U.S. International Trade Commission, 2010, “Small and Medium-Sized Enterprises: Characteristics and Performance,” Washington,
Metro Economies and Firms Benefit from Global Trade U.S. Business Services Exporters, Compared to Non-Exporters 100% 70% 20% higher employment higher sales higher wages Source: J Bradford Jensen, “Global Trade in Services: Fear, Facts, and Offshoring,” Peterson Institute for International Economics, 2011.
Despite these benefits, the U.S. remains an under exporter.
The U.S. Is an Under-Exporter 30% 29% 22% Exports Share of GDP � 13% China Canada India 15% 15% Japan European Union United States Source: Brookings analysis of WTO and EIU data, 2012
Export Intensity Varies Widely by Place Exports Share of Output (2012) 25.8% 7.5% Florida Indiana Source: Export Nation 2013, Brookings, 2013.
Export Intensity Varies Widely by Place Exports Share of Output (2012) 27.7% 7.0% Sacramento Wichita Source: Export Nation 2013, Brookings, 2013.
Transportation Equipment Machinery Computer Electronics Chemicals
Select industries dominate U.S. exports, masking other industry potential Most Export Intensive Metro Areas, 2012 30% 27% 24% 22% 20% Salt Lake City Baton Rouge Portland Detroit Wichita � � � Source: U.S. Census Bureau and Brookings Export Nation 2013
U.S. Exports are Dominated by Select Industries, Masking other Industry Potential Single Industry Share of Total Exports, 2012 60% 67% 53% 60% 53% Baton Rouge Detroit Portland Wichita Salt Lake City Chemicals Transportation Computers Transportation Primary Metals Equipment & Electronics Equipment Source: U.S. Census Bureau and Brookings Export Nation 2013
Further, Federal Data on Goods Movement Distorts Focus from Export Production State Goods Exports (2012, millions) Point of Movement Point of Movement Point of Production Point of Production $275,000 $275,000 $220,000 $220,000 $165,000 $165,000 $110,000 $110,000 $55,000 $55,000 $0 $0 Texas Texas California California New York New York Illinois Illinois Florida Florida Ohio Ohio Source: U.S. Census Bureau and Brookings Export Nation 2013
Further, Federal Data on Goods Distorts Focus from Services U.S. Service Exports 76% 61% 56% 28.8% Washington New York Denver 53% 36% 2011 Atlanta Minneapolis
U.S. Exports Are Generated by Too Few Firms 302,000 293,000 199,000 4% 58% 2011 2012 Both Years of U.S. employer firms export of U.S. exporters sell to only one Number of U.S. firms exporting � foreign market Source: U.S. Census Bureau, “A Profile of U.S. Exporting and Importing Source: U.S. Census Bureau, “A Profile of U.S. Exporting and Companies, 2010-2011”, 2013. Importing Companies, 2010-2011”, 2013.
Middle Market Firms Are also Under Exporting 58% 4% of surveyed middle-market U.S. firms are of surveyed middle-market U.S. firms export currently expanding overseas Middle Market Firm = $10M-$1B sales
Yet, Mid-size Firms Have the Most Potential… Firm Size (Employees) 93% 24% Small � (1-100) 5% 9% Medium � (100-500) 2% Large � 67% (500+) Exporters � Export Value � 2010 2010 Source: U.S. International Trade Commission, “Small and Medium-Sized Enterprises: Characteristics and Performance”, 2010.
…As Do “Threshold” Manufacturing Firms Successful Threshold Exporters Reactive � Moderate � Differentiated product � � Capable and High potential ready to commit resources 2 million Non- 28 million 6 million 262,000 25,000-80,000 exporters produce small have firms nationwide are small tradable businesses employees and medium Low potential goods and manufacturers services � Source: Stone & Associates, “On the Threshold: Refocusing U.S. Export Assistance Strategy for Manufacturers”, 2013.
1 1 2 3 3 2 Why metros?
Metro Areas Hold the Bulk of the Assets That Will Drive Exports Largest Metros’ Share of U.S. Market Assets 92% 90% 82% 75% 75% 74% 72% 66% Population Services Air Freight Advanced Patents Bachelor’s Graduate GDP Exports Industries Degrees Degrees Source: Brookings analysis of US Census Bureau, FAA, BLS, and BEA data
Metros Have a Critical Role to Play in Exports Open new markets through free trade agreements � Federal Finance exports through Ex-Im and SBA � Provide on-the-ground expertise in U.S. and foreign markets � Produce export data to inform state and regional efforts � Organize and facilitate trade missions � State � Provide export training and seminars to local firms � � Prioritize, support and coordinate metro-level efforts � � Increase the number of export-ready firms through direct relationships � � Metro Coordinate federal, state, and local programs � � Catalyze cultural shift by mainstreaming exports and trade
Metros Coordinate the Critical Network That Empowers Exports City � Business/Civic Alliance � State � Industry � Federal Venture Capital/Finance Ports � Universities Airports
1 2 1 2 3 3 Emerging Metro Innovations
GLOBAL CITIES INITIATIVE � A Joint Project of Brookings and JP Morgan Chase � Goal � The Global Cities Initiative will catalyze a shift in economic development priorities and practices resulting in more globally connected metropolitan areas and more sustainable jobs and economic growth. Research Convenings Exchange
Recommend
More recommend
