SALT LAKE CITY -- In January 2011, a year and a half after the Great Recession officially ended, the Salt Lake Chamber laid out a plan to accelerate the state's economic recovery. The 10-point plan, dubbed the Utah Jobs Agenda, called for investment in education, infrastructure and energy. It also emphasized the importance of exports to Utah's economy?setting a goal to double the total value of exports over five years.
Utah's largest business association was not alone in emphasizing the importance of increasing our international exports. The U.S. Chamber of Commerce, the world's largest business federation representing over three million businesses and organizations, sent an open letter to Congress and the President of the United States laying out "six steps to create millions of jobs?starting right now." The first step on the list was to expand trade and global commerce.
President Obama also listed increasing exports as a priority in the 2010 State of the Union address? challenging the nation to double exports over a five-year period.
"We have to seek new markets aggressively, just as our competitors are," said President Obama. "If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores."
Even Congress took steps to increase foreign trade. Last October, the U.S. finalized long-delayed free trade agreements with Columbia, Panama and South Korea?the most significant trade deal since the North American Free Trade Agreement in 1993.
Well before the President called on the nation to double exports, we in Utah were well on our way to doing just that?and that marker is now in our rearview mirror.
New figures for 2011 were just released in February, and Utah has produced a 142 percent increase in merchandise exports over the past five years. By any standard, that is remarkable ? particularly when you consider the economic free fall the world faced in the middle of that time period.
A clarification is probably in order. Merchandise exports are goods that are produced in Utah and sent out of the country. The figure above does not include service exports ?activities like travel, tourism, international students and intellectual property?goods that are produced in Utah and "sold" to money that originates outside the U.S.
Think of it this way: in Utah we make some great skis and ship them to other countries. That's a merchandise export. When people from other countries come to ski on the Greatest Snow on Earth, we are exporting a service, so that's a service export.
Service exports are also critical to our economy; they're just much more difficult to calculate. So what we are discussing today are just merchandise exports.
Having perhaps buried the lead already, here are some of the figures: Merchandise exports in 2011 set a new Utah state record of $18.93 billion 2010 totals were $13.8 billion?meaning we had a 39.5 percent increase in one year 2011 exports were equal to $6,719 per Utahn From 2007-2011 Utah merchandise exports increased by over 142 percent
In a nutshell, this landlocked-no-seaport-having-in-the- middle-of-the-Rocky-Mountains-Utah has led all 50 of these United States in export growth over the past five years? besting the nearest competitor, West Virginia, by nearly 15 percent. Last year, our increase was second best in the nation.
Much of Utah's success is due to the increased price of primary metals?think gold and copper mined at Kennecott mine. As the value of these metals has risen, so does our export total?all without actually selling more than we did before. Primary metals accounted for just over 55 percent of our 2010 total, a figure that increased to 64 percent last year.
Before you dismiss our export prowess as a result of metals and metals alone, remember, "metals are people, too." So says Lew Cramer, president and CEO of the World Trade Center Utah (WTCU). What he means is that mining those metals and shipping them boosts the economy and creates jobs.
And that's what this is all about. Jobs.
Utah exports create Utah jobs. The most commonly accepted estimation is that every $1 billion of exports creates 10,000 jobs.
This is an area incredible potential. The WTCU says less than one percent of Utah firms export their goods, and just over 50 percent of those export to more than one country.
"We are not anywhere close to reaching our export potential," says Cramer, "With 95 percent of the world's customers living outside the U.S., there is still plenty of room to grow."
The most significant barrier to exporting is fear of the unknown. There are rules and regulations to navigate, but that shouldn't prevent businesses from taking advantage of the growth opportunities that lie outside U.S. borders.
Exports are 270 percent higher in metropolitan areas that have a World Trade Center. Established in 2006, WTCU exists to help businesses enter profitable global markets. Cramer, who has held senior level positions in the U.S. Commerce Dept., knows how to navigate a first-time exporter through the labyrinth.
"Exporting is like your first kiss," says Cramer. "Once you've figured it out it's really quite exciting."
It's also quite profitable.
Marty Carpenter is the director of communication at the Salt Lake Chamber, Utah's Business Leader. You can follow him on Twitter @martycarpenter.
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