Q&A: Gary Locke on Boosting Small Biz Exports
President Obama wants to double American exports by 2015—and is targeting small businesses to help drive that growth. Small companies make up half of private nonfarm GDP but only 30% of exports. The Administration wants to use federal resources, such as trade missions abroad and financing from the Export-Import Bank, to spur more companies to export and help those that already do reach new markets. On Apr. 15, Bloomberg Businessweek's John Tozzi spoke with Commerce Secretary Gary Locke about turning the ambitious goal into reality. Edited excerpts of their conversation follow.
What stops most small businesses from exporting?
About 1% of U.S. companies export, but of those that do, 58% export to only one country. I think it indicates a lack of awareness of the opportunities to export. Our goods and services and crops are in great demand all around the world, but U.S. companies just don't know how to find customers, whether in Hungary, or Poland, or Vietnam. Especially the small and medium-size companies. Big corporations have representatives in all the major markets around the world. A company of 100 people, 50 people, or even a shop with 25 people may not know the language, customs, culture, law, and logistical issues of exporting.
How will the Obama Administration double exports in five years?
The National Export Initiative is going to focus on greater on-the-ground advocacy, especially for small and medium-size companies. We hope to increase our Foreign Commercial Service officers stationed in countries around the world, whose sole job is to beat the bushes to find customers for U.S. products and services. It's not just advocacy. It's also credit. That's why the President has called on expansion of [trade financing] by the Export-Import Bank [from $4 billion to $6 billion]. The third part of the initiative is to level the playing field and make sure that markets are free and open to U.S. companies around the world.
Some people argue that growing exports depends more on the value of the dollar, and there's not much from a policy point of view that the U.S. can do to boost exports.
Those issues are very important, and the President's position is very clear. But there's such high demand for American-made goods and services. My wife and I were vacationing in Hungary during our anniversary, and we stopped to meet with the Foreign Commercial Service officers there. They said there are so many companies in Hungary that would love to buy parts and machinery from America, but these companies don't know whom to turn to in the U.S. The same thing occurs with U.S. companies that make very high-quality products. They just don't know how to find customers for their products and services.