Helping States Encourage Exporting (cont.)

South Carolina is an example of where this approach has worked. The state boasts many international advantages: a top-ranked, international business school; a sophisticated and busy port; and its experience as the first state ever to go overseas to recruit foreign investment. Today, South Carolina is home to 400 foreignowned subsidiaries and has one of the nation’s highest percentages of workers who receive pay from foreign companies.

Like most states, however, South Carolina initially faced a loosely tethered consortium of trade development entities that frequently duplicated efforts, thereby wasting limited resources.When TradeRoots proposed an eight-state joint program for export development with the U.S. Department of Commerce, South Carolina’s wealth of trade promoters (combined with heavy job loss in the textile industry) made its inclusion a natural choice. TradeRoots brought trade-focused individuals from varied organizations together in several strategic planning meetings to establish a tangible strategic framework.

Institutionalizing the practice of collaboration, which requires joint tasks, creates an environment in which participants get to know one another and build trust. Trust is the mortar that either holds the alliance together or crumbles to its destruction. In South Carolina, fortunately, that trust led to creation of the Export South Carolina program (which has since been renamed the South Carolina International Trade Coalition). The Coalition now meets quarterly, holds monthly teleconferences, co-plans calendars and events, and coordinates detailed outreach plans for clients, publicity and elected officials. They have successfully established responsibilities for each member that avoid ego and territory disputes. Furthermore, the strategic plan has permitted certain members to address politically sensitive issues via a partner better positioned to deliver that message.

2. Build political and leadership support.

State leaders and members of Congress often are poorly informed about the positive net impact of trade development on their communities. In contrast, they often have a negative perception of free trade due to the tangible, immediate effects of job losses.

State trade development offices often possess a high public profile and good access to leadership, but suffer from serious constraints within the state bureaucracy. Rather than being allowed to pursue export development work, they frequently get mired in the tasks of investment recruitment, except during high-profile international trade events. And because of the time lapse – often several years – between trade offices’ efforts and successful outcomes, or the difficulty ascribing success to those efforts, state trade development offices frequently face tougher budget battles.

For economic developers to succeed, policymakers must stop compartmentalizing other investment efforts from those of local trade development. It is no surprise, then, that much of a state’s international reputation and trade success depends on the governor playing a leadership role.

The state of Alabama, for example, historically offered little in the way of trade development services. (In fact, the current 2005-06 budget of $300,000 is the highest ever.) Although many service providers existed around the state and worked in a somewhat collaborative manner, their varied missions, geographic areas and capabilities caused them to move along separate paths. This dilution isolated them and made them invisible to state leadership. It took winning the Mercedes deal eleven years ago to capture leadership’s attention to trade.

TradeRoots worked to cement the state’s loose network of trade and economic development groups into a concrete structure that commanded high visibility and ultimately led to the endorsement of the governor.With a governor’s program to bind the alliance (Export Alabama), the group developed greater penetration into smaller communities and inspired pride in being part of a group with substantive successes. Since then, the state has moved to a whole new level of trade activity. In the past year alone, Alabama exports rose from $8.3 billion to $9 billion, an 8.4 percent increase that created an estimated 13,000 additional jobs. As you can imagine, those numbers spurred even greater leadership support and are the likely reason for the state’s highest international trade budget to date.

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