America as an export nation?

By Reuters Staff
July 30, 2010

The following is a guest post by Bruce Katz, Emilia Istrate and Jonathan Rothwell. Mr. Katz is the editor of several books on transportation, demographics and regionalism, including “Elevate Our Cities.”  Ms. Istrate is a senior research analyst with the Metropolitan Infrastructure Initiative. Mr. Rothwell is a senior research analyst at the Metropolitan Policy program focusing on urban economics, innovation, and economic opportunity. The opinions expressed are their own.

In debates over how to boost the flagging recovery, promoting exports isn’t usually at top of the list.  But it should be.  Export growth can make this recovery job-filled rather than jobless.

And the White House and allied business leaders agree. They’ve been discussing how to achieve the “new goal” that President Obama set in his last State of the Union speech: double exports over the next five years.

Beyond the usual discussion of exchange rates and trade barriers, however, any successful export strategy requires a look at where U.S. exports come from.

Chrystia Freeland moderates a Brookings Institution panel on an unexpected way to bring America out of the recession.


America’s export geography is highly concentrated in the top 100 metropolitan areas. In a new research report, we found that these population centers produced an estimated 64 percent of U.S. exports in 2008 — that’s over 62 percent of manufactured goods and 75 percent of services.

Three quarters of computer and electronics exports are manufactured in the top 100 cities. More than 80 percent of smaller service exports, such as management and consulting, film and television, computer services and insurance, are concentrated there. This is especially important because the United States has a trade surplus in commercial services — $152.5 billion in 2008. And it is poised for a quantum leap in exportable services.

The nation’s four largest exporting metros, New York, Los Angeles, Chicago and Houston, are the top performers, exporting more than $50 billion apiece in 2008. Three quarters of computer and electronics exports are manufactured in the top 100 cities.

Other major metros — Dallas, San Francisco, Boston, Philadelphia, Detroit and Seattle — are also global players. These 10 large metros generated 28 percent of national exports in 2008.

A different group of smaller and medium-sized places, like Wichita, Toledo and Greensboro are oriented toward exports in ways larger metros are not. Exports contribute more than 15 percent of gross metropolitan product in these and seven other U.S. cities, compared to the largest 100 metros’ average of 10.9 percent.

To leverage this powerful export activity, the Obama administration should connect its macro vision for export growth with the metro reality, where most of the doubling could happen. Only one percent of U.S. companies export, reflecting our vast internal market and cultural insularity. Think of the economic potential if we can make that 2 percent.

While other nations promote exports through sophisticated outreach and, in some cases, major subsidies, U.S. efforts tend to be timid and fragmented. More will be needed to help firms, particularly small ones, enter foreign markets. This can be done by expanding the President’s Export Council to include state and local leaders and revamping current export guidance and support delivery.

The U.S also needs a national freight strategy to maximize our export business. Currently, the U.S. freight system is undermined by aging infrastructure and congested transport networks.  Despite rising imports and exports, the federal government and the states disperse scarce infrastructure dollars based on political rather than market returns.

The many calls from the Obama Administration, Congress, governors and mayors for a National Infrastructure Bank are long overdue. The bank would invest through public/private partnerships and aim to unclog our ports, improve passenger and freight rail, and revamp our electrical grid.

Just as the President has set an export goal for the nation, metros should set their own export goals as well.

For too long, the debate over export policy and practice has been the exclusive domain of policymakers in Washington and a narrow clique of trade constituencies. It is time to widen the circle, to include a larger portion of the business sector and the places where exporting companies can thrive.

Only then can this metropolitan nation realize its potential as an export nation.

5 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

As a small business owner and occasional exporter, I can tell that US exports could grow substantially if and when:
1. Local wages go down
2. Local consumption decreases
3. The Dollar loses value
4. Small businesses regain access to credit for industrial equipment
5. Wages in China, India and other foreign markets increase substantially
6. Local consumption in those markets as well as in the EU increases

What I read in this article, as well as the administration’s ‘plan’ sounds to me like pseudo erudite, politically oriented claptrap.

Posted by yr2009 | Report as abusive

We have been exporting our view of free trade and it has failed by showing itself to be immoral, heedless of it’s impact on others and focused solely on maximizing profits… Sending countries into bankruptcy and holding states hostage for blackmail like Enron… The gigantic profits while wages are negotiated down and people are part-timed and put out to contractor pasture to minimize expense. We need less importing and more local production and agriculture to lower oil and transportation costs. This century is when we face the task of learning to live within the means of our planet without the population growth ponzi scheme. If we can’t do it we will be the cause of our own extinction..

Posted by wildthang | Report as abusive

‘In debates over how to boost the flagging recovery, promoting exports isn’t usually at top of the list. But it should be. Export growth can make this recovery job-filled rather than jobless.’

Sorry, but the article started the way it carried on: no added value. I’m afraid I agree with yr2009: academic drivel.
The first thing to get right is marketing and pricing.
http://nbyslog.blogspot.com/2010/07/us-e conomic-policy-is-as-muddled-as-its.html

Posted by nbywardslog | Report as abusive

1) The Administration is dreaming and has absolutely no idea on how to boost exports. They are expecting other nations to abide by their wishes and make it easy for them. Good luck.

2)American corporate greed and inability of American industry to evolve in a changing global environment will continue to drag down exports.

The challenges are obvious, but the answers are not.

Posted by doctorjay317 | Report as abusive

Very interesting perspective. Definitely deserves valuable consideration, especially for politicians, educators, and business owners and strategists. As an exporter of services, I think this is more than just a potentially profitable move over the short-run. I think it’s a necessary long-term strategic move to make American business more globally competitive. It would force professionals and company systems to raise their level of performance.
It could also benefit American wealth by educating investors more in global economics.
It could benefit other nations by putting the resources and support of the wealthiest nation into growing economies.
Definitely a challenging shift, but perhaps one that needs to be made?

Posted by BrianHatano | Report as abusive