The Great Recession created a vicious cycle in the U.S. economy: as workers lost their jobs or saw hours and wages slashed, they cut back on their own spending, lowering the demand for domestic goods and services and further weakening the economy.
As the global economy accelerated outside the U.S., however, an opportunity for domestic growth emerged: rising nations and their fast-growing metro economies were creating new demand for American goods and services abroad.
President Obama was among those who recognized the imperative to “go global,” in his 2010 State of the Union Address:
We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So, tonight, we set a new goal: we will double our exports over the next five years, an increase that will support two million jobs in America.
But the federal government cannot increase trade by fiat. Just 1 in 100 American firms sends goods or services abroad, and only about half of those export to more than one country. Doubling exports will require many thousands of companies to change strategies to increase international sales, reach new markets, and send goods and services abroad for the first time.
Some two-thirds of U.S. exports originate in the top 100 metropolitan areas. If the nation is going to export more, that means metros have to export more, and local leaders have to make supporting exports a priority.
Portland Steps Up
Portland, Oregon, is one place that has embraced the export opportunity. Its welcome of global trade has come in part because it is already a strong exporter and in part from necessity. The metro was hit hard by the Great Recession, shedding 80,000 jobs between the beginning of 2008 and the end of 2009, which sent the unemployment rate over 11 percent.
Portland’s economy had a bright spot, though: in 2012, roughly one-quarter of its gross metropolitan product came from exports, the highest export intensity in the U.S. And it was one of just five metros that had already doubled its exports from 2003 to 2010. Portland’s leadership community recognized their region’s recovery depended on building on this already-strong export sector.
The question was, could Portland again double its exports? It would be especially challenging in an economy hit hard by the recession, when many businesses saw exports as a risky proposition. Mayor Sam Adams and the Portland Development Commission (PDC) needed a team that could help them figure out a game plan and export strategy.
The steering committee assembled by Mayor Adams and the PDC to develop the export strategy spent months assessing what Portland’s unique strengths were and how best to build a strategy around them. The team ultimately identified two particular areas for Portland to emphasize: electronics manufacturing and sustainability.
Encouraging export growth among electronics and computer manufacturers was a no-brainer. Seventy percent of Greater Portland’s exports already came from the high-tech industries that make up the region’s “Silicon Forest.”
But the other area of focus—sustainability—might strike some as a stretch. How do you export the sometimes abstract, “green” idea of sustainability?
Around the world, the fast economic and population growth in metros in emerging markets is taxing local environments. These places will increasingly demand products and services that are environmentally sensitive and affordable. And those products and services will disproportionately emerge from firms located in metros that are first movers on sustainable development.
Photo: Steven Zhang http://www.flickr.com/people/stevenyzhang/
Portland has long been in the vanguard of sustainability. In the 1970s, Oregon Governor Tom McCall pushed through an urban growth boundary law to curb sprawl; over the past four decades, that and other efforts have helped define Portland as an example of “smart growth.” This action reflects a broader environmental ethos and a focus on sustainability among Portland residents.
Green businesses have thrived in this environment. For example, Portland Energy Conservation, an energy-efficiency services firm established in 1984, recently expanded operations to California, where it has managed a statewide energy audit program; and Danish firm Vestas Wind Systems, the world’s largest wind turbine manufacturer, chose Portland for its North American headquarters in 2002.
There was money to be made from sustainability goods and services if Portland and its businesses could help teach the world to be green.
“Being the sustainability director of Portland is a bit like being the oil minister of Saudi Arabia,” noted Grist magazine in a profile of Portland’s sustainability director, Susan Anderson. “You don’t exactly run the place, but you do have the region’s chief export on tap.” Challenges for Emerging Markets Metros face a wide range of environmental issues as they grow, and they often turn to outside expertise for help.
Building the Export Ecosystem
To meet the ambitious goal of doubling exports again, Portland needed to boost operational capacity, and it needed business growth expertise. Already-exporting firms had to increase international sales, and others had to export for the first time.
Greater Portland Inc (GPI), the public-private economic development organization for the entire metropolis formed in 2011, was the obvious choice to lead. It wielded expertise in business development and consulting, marketing and branding, and regional strategy.
Major Strategies of the Portland Export Initiative
- Promote Portland’s sustainability strengths globally with “We Build Green Cities” campaign.
- Strengthen computer and electronics trade by recruiting and retaining export producers and suppliers and offering incentives for export growth.
- Catalyze manufacturing under-exporters by providing medium and large firms that are ready to export with market analyses to help identify new target markets.
- Encourage smaller companies to participate in the global economy through online and in-person peer-to-peer case management and mentoring.
Portland Around The World
A new global map is being drawn around the world, not of nation-to-nation trade but of metro-to-metro exchange. This new export cycle is based on distinctive clusters, specialized expertise, and cultural affinity.
Every metro needs to understand its distinctive advantages the way that Portland does. Under current Mayor Charlie Hales, the Portland Development Commission has continued to promote the We Build Green Cities brand globally, with a trade mission to Japan in April 2013 and a signed partnership with Jaraguá do Sul, Brazil in May 2013. Both initiatives focused on connecting Portland firms to green development projects in those markets. Portland’s exporting firms are also building a platform for global exchange. Companies exporting technology and sustainability goods and services are linking the region with metros in Mexico, the Middle East, and Asia.
It’s not just selling each other microbrews. What you really need is a culture where manufacturers or entrepreneurs begin to include foreign markets as part of their business strategy.
—Tom Hughes, president of the Portland region’s Metro Council
- Trade and exports are the key to future economic growth, and every metro needs to understand its distinct advantages.
- Smart metros are constantly expanding who trades, where they trade, and what is traded. International trade is not just for huge companies, and it’s not just sneakers and computer chips. Portland is a great example of how small companies can work together and export services like consulting and sustainability.
This story is adapted from The Metropolitan Revolution book and iPad app by Bruce Katz and Jennifer Bradley. Story presented by the Brookings Metropolitan Policy Program. iPad app, including the graphics and videos in this story, produced by Melcher Media and designed and developed by Crush+Lovely.
Learn more about The Metropolitan Revolution at http://www.metrorevolution.org