Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
BRIC Business Outlook Conference
Monday, May 2, 2011
As prepared for delivery
Thank you very much for your introduction, Bill (Burwell). It is a pleasure to be here in Baltimore to kick-off World Trade Month and the BRIC Business Outlook Conference. The U.S. Commercial Service and our Maryland partners have had a long relationship that has helped connect small and medium-sized businesses to global opportunities. I want to thank the officials from the Maryland Department of Business and Economic Development for joining us today and their continued partnership and support.
As President Obama said in the State of the Union address this year, “We need to out-innovate, out-educate, and out-build the rest of the world.” To win the future, we must work together to create opportunities that encourage innovation and spur growth. We must produce innovative products and technologies, we must educate and train our workers and students so that we may scale new technologies and we must connect our exporters with buyers worldwide. When the U.S. exports, jobs are created here and abroad.
The Obama Administration stands for the principles of free and fair trade and recognizes that U.S. businesses need a level-playing field to take their products and services to global markets. This becomes even more important in the fast growing economies of Brazil, India and China where we are working to further open markets, remove barriers, and create the framework for U.S. businesses to increase innovation and access to this innovation to stay globally competitive.
America is at its best when it is inventive. We invented the motor car, the airplane, the computer and even the internet and GPS which we commercialized through public-private partnerships. “Winning the Future” will require continued private sector innovation. The Administration is committed to lay the foundation for future success through policy mechanisms that reduce risk, provide greater predictability and influence common standards. Global trade policies must encourage and nurture innovation by protecting intellectual property rights, and resist push for local content and indigenous innovation; these impede innovation and restrict access to technologies, products and services that can improve lives and livelihoods worldwide. There is a thin line between encouraging and stifling innovation.
When we have innovated we have prevailed. That is why this Administration places so much emphasis on innovation, on building and owning the markets of tomorrow even as we vigorously compete for share in today’s markets. American products improve lives and livelihoods globally; because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
Innovation is the foundation for sustainable competitiveness in the 21st century. It is how U.S. companies and our products and services can reach the 95% of consumers who live outside our borders.
Winning the future requires increasing investment in research and development. The Obama Administration has made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development. Nowhere is this more important than with small and medium-sized enterprises, which make up 97% of all firms in the United States.
A larger focus for U.S. businesses must be to reinvent what we make, consume, market and sell. Government must reinvent its support, focusing on self-sufficiency, sustainability, innovation and fiscal responsibility. An example of such reinvention came last year when the Administration brought together businesses, entrepreneurs, CEOs, regulators and representatives of foreign governments along with NIST to influence the development of common standards for SMART grid and ancillary products and services.
Hand-in-hand with innovation through R&D, and investment in infrastructure from high speed rail systems to high speed internet, the Administration has a targeted focus on creating and funding sustainable solutions for the future that lead the global marketplace.
Global trade connects us all and we live in times of a global supply chain. US built equipment like Caterpillar helps build infrastructure in developing countries and newly developed Economies including BRIC nations. US technology and machines help produce products for domestic consumption and exports in these markets e.g.,every time Brazil sells an Embraer aircraft, 60% content is US exports.
Our global leadership is also dependent on how we educate our students to help scale our innovation. New jobs in advancing fields will require Us to retrain our workers, higher education, and investments and programs like Intel’s STEM (Science, Technology, Engineering and Math) education. This will ensure that the next generation is prepared with the skills they need to succeed and that America is well-positioned to win the future.
The President has laid out a plan to prepare 100,000 new teachers in science, technology, engineering, and math –skills that will prepare students for the jobs of the 21st century. Under his plan, teacher preparation models that prove effective will be further expanded to help train more teachers and top STEM graduates will be prepared for teaching careers of their own.
America’s long-term goal to out-educate the competition and spark a new wave of American innovation will continue to create jobs for the next generation and guarantee that America can win the future.
Announced by President Obama in January 2010, the National Export Initiative aims to double U.S. exports by 2015. It is at the forefront of the Obama Administration’s short and long term economic strategy for winning the future, and serves as a catalyst to enhance our competitiveness, create sustainable jobs and build a stronger America.
Through the National Export Initiative, we help companies expand their global footprint to reach more customers worldwide. This not only helps create greater sustainable employment but also helps us become more competitive.
You are here today seeking new opportunities to expand your business overseas. There are several real and perceived barriers to exports, but American enterprise, particularly SMEs dont have to face this alone- they have the full support of the U.S. government in connecting you to global partners and markets. Last year, the U.S. Commercial Service assisted 18,000 companies export, of which 16,000 were small -and medium-sized firms employing fewer than 500 persons. As a result, nearly 5,600 companies exported for the first time or increased their exports overseas, 85 percent of which were small and medium-sized businesses. The Commercial Service helped U.S. businesses post over 12,000 export successes in 2010. Every $1 invested in the US & FCS last year returned $135 to the American taxpayer by way of facilitated exports. Last year exports grew 17% vs. 2009 which is better than the 15% compounded annual growth rate required to double exports within 5 years. Exports comprised 12.5% of U.S. GDP in 2010, up from the 11.2% recorded in 2009. Exports contributed nearly half of the 2.9 percentage point growth in real GDP in 2010. The $1.83 trillion total in exports of U.S. goods and services represents the second-highest annual total on record.
Maryland recorded exports of $10.2 billion. Over the last 2 years in Maryland, the U.S. export assistance center helped over 35 companies, from a wide variety of industries, including biotechnology, healthcare services, construction, and consumer electronics, increase their export sales to BRIC markets with 18 going to China alone. Last year, the Baltimore USEAC spearheaded a China-themed ExporTech program, a highly customized, professionally facilitated coaching program where participants learn and develop various strategies and tactics to help them accelerate their company’s export activities. Following the ExporTech program, the USFCS worked with the State of Maryland and the City of Baltimore to support a trade mission to China organized by our partners here in Maryland.
Maryland is an example of hardworking Americans who have the skills and dedication to produce the best products in the world: One such company is Chindex, a Bethesda-based medical technologies trading company. The US&FCS assisted Chindex secure funds through U.S. Export-Import Bank financing programs and provided information that helped Chindex to become the first U.S. company to take advantage of duty exemptions on imports of medical equipment into China. This helped the company make sale of $5.2 million to the Liaoheng People’s Hospital Project.
There are several such examples of opportunities and problem solving that the U.S. Commercial Service’s trade specialists here in Maryland and throughout the BRIC countries who work every day to assist local businesses. They identify new markets, develop market entry plans guide and assist you to secure working capital even as they assist others to navigate foreign customs and regulations.
The BRIC Outlook Business Conference is an opportunity for U.S. business to hear directly from key U.S. government officials about the opportunities and services that exist to help you export your products and services. Through our Gold Key matchmaking services, one-on-one export counseling, and our extensive network around the globe, the U.S. Commercial Service can assist your companies to convert export challenges into profitable opportunities. We are here to make exporting easier for you.
The Administration’s focus on innovation, education and commercialization reflects market-driven, competitive approaches that make sure that the United States is the best place to do business and to innovate.
The Administration recognizes that increasing global trade provides opportunities for growing America’s SMEs. Exporting must play a larger role in the U.S.’s economic prosperity. The pre-crisis drivers of U.S. economic growth - domestic consumer and business spending - can no longer be the only levers of an emerging and even more globally connected marketplace. NEI goals can only be achieved if developing economies like Brazil, India, and China encourage domestic consumption and open their markets to global trade. The Administration works with our trading partners to provide access to new markets: those who seek access to U.S. markets must also remove barriers to trade and open their markets to U.S. products.
To win the future, U.S. businesses must expand their global reach to new markets. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally.
As I mentioned, exports as a percentage of our GDP is just 12.5%; whereas exports account for 40 percent of Germany’s GDP, 30 percent of Canada’s GDP and a quarter of China’s GDP comes from exports. The IMF forecasts that 87 percent of world economic growth over the next five years will occur outside the United States. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future. Because when U.S. companies export more, we produce more. When we produce more, we need more workers. And export related jobs on average pay 15 percent more than the typical wage in America.
Innovation and exporting are inextricably linked; they ARE the drivers for sustainable economic growth and help create well paying jobs.
Private sector employers driven by small and medium-sized companies have added jobs for fourteen straight months. For the first time in 24 months (April 2009) unemployment is below 9% at 8.8%, but even this is unacceptably high. Facilitating and growing exports that create more employment has never been more important than now. The more we sell overseas, the more jobs we create in the United States. Every $1 billion of goods and services we export supports more than 5,000 U.S. jobs.
I look forward to our continued collaboration with our partners and to working with the SMEs like the ones here today to create a vibrant, robust, and resilient American economy; an economy which produces well paying jobs at home, increases our competitiveness globally and helps America lead the way in creating global prosperity.
When you succeed, the entire American economy succeeds.
Thank you for having me here today.
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