The Salt Lake City metro area has a plan in place to boost the region’s exporting activities, designed to strengthen the local economy and lead to more high-paying jobs.
The Salt Lake County Regional Export Plan was unveiled recently and is part of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase.
“As you all know, exports are growing in importance for several reasons,” Craig Zollinger, managing director and regional head of JPMorgan Chase, told the crowd during the plan unveiling.
“The world’s economic map is shifting. Eighty percent of the consumption growth over the next decade is expected to take place outside of the U.S. and Europe, and in the U.S. alone, the largest 100 metros already account for two-thirds of the GDP. We know that selling products or services in international markets comes with challenges, but it also comes with enormous opportunity — opportunity that Greater Salt Lake should and must embrace.”
Derek Miller, chief executive officer of World Trade Center Utah, said the plan will help Utah “do better than we’re already doing” regarding exports. Utah exports $13.5 billion a year, a figure up 8 percent during the past year.
The figure was $12.6 billion in 2014, putting Utah 30th among states. The Salt Lake City metro area had a $11.4 billion nominal export value in 2014. The county accounted for $10.24 billion, or 47 percent of Utah’s export activity. Sixty-eitht percent of the county total involved goods and 32 percent were services.
“For an inland state, in the middle of the Rocky Mountains, with a population of only 3 million people, that [state figure] is significant. … But it doesn’t mean that we can’t do better, because we certainly can, and the findings of the report indicate that,” Miller said.
“There are a number of companies that could be exporting that are not exporting. There are a number of companies that want to export but they don’t know how to get started.”
Part of the plan involved surveying 45 companies, and nearly 60 percent of them do not consider themselves exporters. Many told of barriers to international trade, including foreign government regulations and policies, global sales contracts and a lack of export knowledge. Several companies had no desire to export. Lack of profitability was a commonly mentioned export barrier.
In a study of export intensity, a ratio of exports to sales, Salt Lake City was ranked fifth among western U.S. metro areas. Ogden was the leader, followed by Seattle, Portland and San Jose.
“Foreign trade is an important part of our economy, both in the county as well as the state, and I am convinced that now putting this plan into implementation will bear tremendous fruit for our economy,” Miller said.
The report notes that firms that export goods and services pay about 18 percent higher wages, have lower unemployment levels and experience increased worker productivity, among other benefits.
The report indicates that increased exporting activity accounts for nearly 6,000 jobs created for each $1 billion in export value. Salt Lake County Mayor Ben McAdams said those jobs “aren’t just internal — shifting the money around here in the Salt Lake Valley — but bringing in new resources to support our growing economy and our growing population.”
In contrast to exports, the data indicates that traditional business recruitment typically grows an economy by only 1 percent. “But our research shows that simply having 1 percent economic growth in an area that’s growing as fast as ours is, is not an approach that will yield the outcomes that we need to support our region’s real and projected population growth,” McAdams said.
Among the report’s findings are that one-third of the region’s export portfolio is from primary metals, businesses are content with the domestic market and exporting is an afterthought, smaller regional companies have higher barriers to exporting, advanced industry clusters in the regional economy produce higher wages for workers, export support services are not understood and opportunities go unrecognized, the region has a multitude of available hard and soft assets to support export-related activities, and middle market firms represent strong potential for export growth.
Among the plan’s strategies for boosting exports are to identify and expand global competitiveness for middle market threshold exporters, create a global positioning strategy for targeted advanced industry clusters, expand and use the established export services ecosystem, build innovative mentorship opportunities for existing regional businesses, and enhance and improve the region’s transportation and freight infrastructure.
The plan indicates that most future GDP growth will occur outside and U.S., and the world’s purchasing power is “significantly larger” than the domestic market.
“Salt Lake County is primed for a new era of economic development, which includes focusing on global opportunities,” the plan states. “As a growing number of the region’s companies produce high-demand goods and services, it’s imperative to bridge the divide separating them from international customers. By strengthening and advancing global competitiveness and connectedness for targeted industries, broad prosperity is ensured within the region for generations to come.”
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