Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
Appalachian Regional Commission Governors' Quorum Meeting
Monday, February 28, 2011
As prepared for delivery
Thank you very much for your introduction, Earl. Thank you to the Appalachian Regional Commission for inviting me here today. I would also like to acknowledge the 2011 co-chair of the ARC, Governor Steve Beshear of Kentucky.
As President Obama said in the State of the Union address last month, “To win the future, we need to out-innovate, out-educate, and out-build the rest of the world.” We must work together to create opportunities that encourage innovation and spur growth. We must produce innovative products and technologies and connect our exporters with buyers, while recognizing that growing U.S. exports is not only good for the U.S. economy but also for our trading partners.
The National Export Initiative is at the forefront of the Obama Administration’s short and long term economic strategy for winning the future. The National Export Initiative, which has set a goal of doubling U.S. exports in five years, serves as a catalyst to enhance our competitiveness, create sustainable jobs and build a stronger America.
Investing in new technologies and encouraging innovation will help create new market sectors and through education programs we are developing skills that will help sustain innovation and build a competitive advantage. Through the National Export Initiative, we help companies expand their global footprint and by reaching more customers worldwide we enhance our competitiveness and create greater sustainable employment.
As Assistant Secretary and Director General of the U.S. & Foreign Commercial Service, I lead a team of 1,500 trade professionals in 109 offices across the U.S. and 127 cities in 79 countries. The Commercial Service is a key implementing agency of the President’s National Export Initiative and is committed to enhancing U.S. competitiveness. Last year, we assisted 18,000 companies export of which 16,000 were SMEs. Nearly 5,600 companies increased their exports to a new market and 85 percent of those were small and medium-sized businesses. The Commercial Service helped US businesses post over 12,000 export successes in 2010. Last year the 13 member states of ARC recorded exports of more than $320 billion, an increase of 19% percent over 2009.
We maintain 29 U.S. Export Assistance Centers in ARC member states. Our offices serve the ARC region to ensure we reach SME exporters in important rural areas, not just the major metropolitan areas. Working with state governments, area universities, and local economic development agencies allows us to leverage our programs for the maximum benefit of SMEs Appalachian region.
Our close cooperation has been most visible on successive Trade Winds missions: 2011 will mark the fourth consecutive year of ARC support for this program that has already enabled 60 Appalachian businesses from eight ARC states to expand their export sales and conferences in Europe and South America. This year ARC will partner in the U.S. Commercial Service Trade Winds event in Mexico.
America is at its best when it is inventive. We invented the motor car, the airplane, the computer and through public-private partnerships even the internet and the GPS. “Winning the Future” will require continued private sector innovation and the Administration is committed to lay the foundation for future success by influencing a common set of rules, standards, and incentives and through policy mechanisms that reduce risk, and provide greater predictability.
When we have innovated we have prevailed. That is why this Administration places so much emphasis on innovation, on building and owning the markets of tomorrow even as we vigorously compete for share in today’s markets. American products improve lives and livelihoods globally; because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
Private sector employers driven by small and medium-sized companies have added jobs for twelve straight months. But unemployment remains unacceptably high and facilitating exports is a way of creating more employment.
To spark innovation and creativity of our businesses, it is critical that we make the investments necessary to stay competitive in the 21st century and simultaneously assist America’s companies to export our products and services to the 95% of consumers who live outside our borders.
Winning the future requires increasing investment in research and development. The Obama Administration has made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development. Nowhere is this more important than with small and medium-sized enterprises, which make up 97% of all firms in the United States.
A larger focus for U.S. businesses must be to reinvent what we make, consume, market and sell. Government must reinvent its support, focusing on self-sufficiency, sustainability and innovation. An example of such reinvention came last year when the Administration brought together businesses, entrepreneurs, CEOs, regulators and representatives of foreign governments along with NIST to influence the development of common standards for SMART grid and ancillary products and services.
Hand-in-hand with innovation through R&D and investment in infrastructure from high speed rail systems to high speed internet, the Administration has a targeted focus on creating and funding sustainable solutions for the future that lead the global marketplace.
The Appalachian Region is an example of hardworking Americans who have the skills and dedication to produce the best products in the world -- America’s future starts there.
For example Kanawha (Ka-NAH) Scales and Systems, in rural Poca, WV, is a world- leader in Batch Loading systems for the mining industry. The US Commercial Service worked with Kanawha and helped facilitate representative agreement with an Indian coal mining company that eventually led to an order with a large steel and coal company valued at approximately $3.5 million. Two new full-time jobs were created within the company to support their growing exports to India.
The Commercial Service also worked with Jefferson Machine, a small machining and fabricating company in Punxsutawney, PA, that produces replacement parts for heavy equipment requested assistance to help collect payment of around $100,000, owed by its parts distributor in Greece. The Commercial Services offices in Greece and Pittsburgh teamed together in the resolution process that led to securing payment and additional 2% late fee.
There are several such examples of business building or problem solution that the Commercial Services trade specialists work on every day to assist local businesses.
The Administration’s focus on innovation, education and commercialization, along with an emphasis on infrastructure, and sustainability reflects market-driven, competitive approaches that make sure that the United States is the best place to do business and to innovate.
Leveraging this strategy requires creating deep market linkages and connecting innovation to the marketplace. This is the core of the NEI — connecting American innovation and our innovative products and services with consumers worldwide. Last year alone, of the 39 trade missions and certified trade missions led by the Department of Commerce, ten were to the fast growing emerging markets of Brazil, India, and China. Indeed, with ARC’s support, regional suppliers of wood products and home furnishings are reaching key buyers in China through participation in our USA pavilion. The 2011 trade show in China marks the seventh consecutive year of promoting Appalachian products in the heart of the Asian marketplace. This cooperative initiative has served to reduce exhibition costs for Appalachian businesses, while generating $50 million in projected sales.
The Administration recognizes that increasing global trade provides opportunities for growing America’s SMEs. Exporting must play a larger role in the U.S.’s economic prosperity. The pre-crisis drivers of U.S. economic growth - domestic consumer and business spending - can no longer be the only levers of an emerging and even more globally connected marketplace. Those who seek access to U.S. markets must also remove barriers to trade and open their markets to U.S. products.
To win the future, U.S. businesses must expand their global reach to new markets. To accomplish the President’s goal of doubling exports, the Federal Government is utilizing all the resources of the export promotion agencies to help connect U.S. businesses with global consumers and market opportunities. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally.
The NEI is off to a great start. Exports grew 17 percent last year and support nearly 10 million jobs in America, including almost 7 million manufacturing jobs. But exports as a percentage of our GDP in 2010 was 12.5%; it lags behind countries like Germany where exports account for 40 percent, or Canada at 30 percent or even China where 25 percent of GDP comes from exports. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future.
Innovation and exporting are inextricably linked; they ARE the drivers for sustainable American economic growth.
Leveraging public and private resources to increase exports helps us elevate awareness and profile of products from the region and create well paying jobs.
I look forward to our continued collaboration with ARC and its state members to substantially scale up our engagement in educating our future innovators, encouraging innovators to become entrepreneurs and entrepreneurs to export: This is how we improve lives and livelihoods in the U.S. and worldwide.Thank you for having me here today.
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