South Carolina’s future is going to be in international trade. But the state needs to develop a comprehensive, aggressive, coordinated export strategy if it is going to be successful in the era of globalization.
That was USC director of economic research Doug Woodward’s message to the Global Business Forum last month.
About 160 exporters, potential exporters and government personnel — literally from around the world — attended the forum, the first event staged by the S.C. International Trade Coalition. The one-day conference was held at the Columbia Metropolitan Convention Center.
Woodward, the forum’s last speaker, whose area of expertise is the impact of globalization on regions, acknowledged that South Carolina has tremendous strength in exporting and tremendous advantages with infrastructure such as the port.
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But South Carolina’s lack of a real trade strategy “puts us at somewhat of a competitive disadvantage,” Woodward said.
“We give a lot of support on marketing, but we don’t have a comprehensive export-oriented strategy to the extent that we see in other places in the world,” he said. “The Palmetto State must really respond with an aggressive coordinated strategy. The time is right for that.”
Globalization is here to stay. Much of the forum focused on the opening of the world’s markets through the World Trade Organization and free-trade agreements such as NAFTA and CAFTA-DR.
South Carolina has done well with both trade and international investment.
Exports pump $13.6 billion into the state economy annually, supporting employment and generating billions in state and local taxes.
In his welcome remarks to the forum, Commerce Secretary Joe Taylor noted that “our state ranks No. 1 in the United States in per-capita investment by companies that are headquartered abroad.”
Taylor built his own business, Southland Log Homes, through exporting, shipping homes to China, Taiwan, Japan and Europe — even the Seychelles, islands off the coast of Africa in the Indian Ocean.
“That is how easy it is to be in the export business today,” Taylor said. “If an old country boy like me can ship a log home out to the Seychelles islands, I think you can do business like that anywhere in the world.”
South Carolina has experienced a lot of success in the international markets, said Paul Dyck, deputy assistant secretary for market access and compliance with the U.S. Department of Commerce.
Over the last four years, the state has experienced a 41 percent increase in export sales, Dyck said.
He also noted the impact that exporting success has had on the state’s job market.
“Only the state of Washington has a higher percentage of export jobs supported by manufacturing,” Dyck said.
But South Carolina needs a strategy to continue that success.
That should include diversifying the kinds of businesses that are exporting and the kinds of products that are exported, Woodward said.
Too many S.C. exports come from too few companies and are in too few product categories, Woodward said.
Some of that lack of diversity was felt last year, when S.C. exports fell by a little more than 2 percent while global export markets have been growing at double digits. The state exported $16.6 billion worth of goods in 2006 versus $13.9 in 2005.
The state’s big-dollar exports include vehicles, rubber products and electrical machinery, said Clark Thompson, director of export development and foreign relations for the state Commerce Department.
When one of the companies making those products has a bad year or, as in the case of BMW last year, drops production while it installs a new product line, the state’s exports suffer, Thompson said.
South Carolina does need to work harder to ensure that small and medium-sized companies increase their exports so that “all of our export eggs are not in one or two baskets,” Thompson said.
The state also needs to continue to work to diversify its export markets, Woodward said.
“Just like a financial portfolio, if we want to be successful, diversification is going to be the key to sustainable growth and taking advantage of the opportunities of globalization.”