The Greater Baltimore Committee and four partners released an export market assessment on Oct. 19, which found that while the Baltimore Metro area lags other metro regions in the U.S. when it comes to exporting, there is a lot of untapped potential that could be leveraged.
The assessment of the Baltimore metro market’s current exports and potential was released at the GBC’s annual Economic Outlook Conference at the Hyatt Regency Baltimore.
The assessment is part of the Baltimore region’s participation in the Global Cities Initiative, a joint project of the Brookings Institution and JPMorgan Chase. The Baltimore region will issue a final Global Cities Initiative report, including a strategy for expanding the region’s exports, in early 2016.
At the conference Marek Gootman, Fellow and Director, Strategic Partnerships and Global Initiatives for the Brookings Institution, and Donald C. Fry, President and CEO of the GBC, discussed how the Greater Baltimore region can expand and improve export activities to stay competitive in today’s global economy. Richard E. Cripps, CFA, Chief Investment Officer for Stifel, made projections for the Maryland and regional economies.
The event – themed “Expanding Into Global Markets: Exporting your Goods and Services to Grow your Business” – includes these highlights and observations:
Marek Gootman of the Brookings Institution said thinking about exports from a global perspective is imperative “because the focus on traded sectors and exports is needed to sustain quality economic growth.”
- Gootman said that “95 percent of the world’s consumers are outside of the United States.” “Eighty-one percent over the next 15 years of global economic growth is occurring outside the United States,” he said. “That’s a lot of economic activity.”
- “Despite the fact that 98 percent of exporters are small businesses, the value and the share of export activity is still dominated by that 2 percent – the large exporters,” Gootman said. “Going global pays off for small- and medium-sized enterprises, both on goods and services.”
- “Middle market firms in particular benefit from exports,” Gootman said. “They have increased revenues over non-exporting firms, add more employees and project greater revenue. There is a substantial business case, a data-driven case for small- and medium-sized businesses to be exporting more and there are plenty of opportunities for them to be exporting more.”
- “This is about firm competitiveness. Globalization is forcing some of these changes,” Gootman said. “This is a great time for rethinking about what everyone is doing around economic growth.”
Donald C. Fry, President and CEO of the GBC, said the rationale for why the Baltimore metropolitan region is ripe for an export plan is because the region has relied heavily on federal government and defense funding. He noted that the assessment included five key findings.
- Fry said the constraints of the federal government spending, including sequestration, has stifled economic growth. “Recently Maryland’s economy ranked 49th out of 50 with no economic growth shown,” he said. “We recognize the need to diversity our region and also to expand into the marketplace. This is a rationale for why it’s critically important for this region to move forward with this effort.”
- The Baltimore metropolitan region exports in the areas of education, health care, tourism, information technology and manufacturing, Fry said. “We export to Europe, Asia and Canada,” he said. “Our top export areas were in airplane products and precision instruments and R&D services.”
- “We have not experienced the growth that other regions have post-recession,” Fry said. “In fact, we rank 82nd out of the 100 largest metros for our export growth since the recession.”
- Fry said that if the Baltimore metro’s export trade strategy and areas are improved, “we think that the Baltimore metropolitan region has a tremendous opportunity to grow its metro GDP but also grow the percentage of that that comes from export trade,” he said. “We need to take advantage of that opportunity if we’re going to be successful in moving our region forward.”
- “As we try to look at all of this, we have to ask ourselves is this unique? Is this zone of instability something that we have never experienced before?” Cripps said.
- Cripps suggested that the instability or the feeling of instability in the 1950s “was as great then as it is now,” he said. “We think this is so unique, this period of time, this zone of instability that we need to maybe take a broader perspective. Is there a phenomenon like the Baby Boom or the world reconstructing that we’re looking at today that we’re somehow missing?”
- “The impact in the growth of the global Middle Class is 10 times greater than the Industrial Revolution,” Cripps said. “We’re looking at the growth of the Middle Class population essentially going up to 4.2 billion with $65 trillion worth of purchasing power 10 years from now. That’s enormous and that’s the opportunity that the Global Cities Initiative is trying to capitalize on.”
- Cripps said that in 2025 or 2030 we may look back at 2015 and say “what kinds of decisions could we have been focusing on to place ourselves in the middle of the river of this opportunity?”
- Offering an economic forecast for the balance of 2015 and looking to 2016, Cripps said “I would say to you narrow your intention to your effort at hand, to your focus at hand, engage in creative thinking, be innovative where possible and adapt to the realities that are occurring in the marketplace. Doing so will be good for you and it will be good for the City of Baltimore.”
View Baltimore’s Metro Export Market Assessment here.
Read about the project here.