Northeast Must Jump Start Region's Export Machine
Study says small businesses need to develop markets
THE Northeastern states are not selling as much of their exportable goods in international markets as they could, according to preliminary results of a study conducted by the Urban Institute in Washington.
Initial findings for the ongoing study, commissioned by a 10-state export trade group for the Council of State Governments Eastern Regional Conference, were released at the group's annual conference this week. It is the first one ever conducted for the 10-state region.
"They're going to fall short - the Northeast is - as an exporting economy," says Blaine Liner, who is leading the export study as director of the state policy center at the Urban Institute.
He says one reason is because the exporting economy is not as broad as in other regions. In New England, for example, only a few key industries are exporting.
In fact, only one out of four New England businesses that produce exportable goods sell their products in overseas markets, according to state Rep. Ray Fogarty of Rhode Island, director of the Rhode Island Export Assistance Center at Bryant College.
The export study is being conducted for the Export Trade Promotion Task Force, formed in 1990. The idea is to get states to work more cooperatively on trade missions, target industries for future exporting, and to share information.
In tough economic times, many states have cut their export programs and would therefore benefit from a regional export strategy, say trade officials.
The survey includes statistical information for 10 eastern states over a five-year period from 1986 to 1991. The region includes the six New England states as well as Delaware, New Jersey, New York, and Pennsylvania.
To be completed in November, the study will help trade officials target potential export industries for the 1990s.
For the region, the study found that industrial machinery is the strongest export sector, with electronic equipment coming in second. In addition, although manufacturing is the largest major export from the Northeast, manufacturing employment dropped 13 percent from 1985 through 1990.
The study also breaks down exporting information by state. In Massachusetts, for example, industrial machinery accounts for 40 percent of the state's exports. Paper products account for 25 percent of Maine's exports while electronic equipment accounts for 81 percent of Vermont's exports.
Trade officials say regional businesses should be more actively selling their exportable goods abroad.
"There is a sense that there is an untapped potential here," says Wendell Hannaford, deputy director of the eastern office of the Council of State Governments. But it is the small and medium-sized firms, not the larger ones, that are not pursuing international markets, he says.
"Large firms have the resources, the expertise," he says. Mr. Hannaford notes that every $40,000 worth of company exports creates one domestic job.
States should also cooperate more on a regional level, says Representative Fogarty.
He says the Rhode Island Export Assistance Center at Bryant College hopes to eventually electronically link up its export trade data office to all of the other states in the region.
In this way, all states will be able to share information about export opportunities.