Area businesses urged to explore international options
Aug. 8, 2000
KALAMAZOO -- A Western Michigan University professor is urging small- and medium-sized businesses in Southwest and mid-Michigan to become more active in the international marketplace. And they ought to get started right away, he says, while times are good here at home.
Dr. F. William McCarty, professor of finance and commercial law in the Haworth College of Business, says companies that export their goods or services contribute more to local economies than those that sell exclusively in the United States. The journal "Business Horizons" recently published his insights on the importance of international business at the local level.
"Obviously, a company that's exporting is usually going to have higher revenues than those selling only domestically," says McCarty, who is a key figure in WMU's Asian/Pacific Education Program. "But exporting brings many additional benefits, which people may not recognize. For instance, businesses engaged in the international marketplace tend to pay the highest wages in a given region. And, perhaps more subtly, exposure to foreign markets often helps companies to improve their products--to become more flexible in terms of alterations and innovations, based on the new requirements of foreign clients."
Along with co-authors Mark Kasoff of Bowling Green State University and Doug Smith of Global Trade Information Services Inc., McCarty suggests that many small- and medium-sized businesses throughout the Midwest neglect the international market, especially when the U.S. economy is strong. After conducting one-on-one interviews with business owners, McCarty found that executives often perceive foreign markets as the sole domain of large-scale businesses, they're daunted by what they believe to be heavy paperwork requirements, or they feel that times are so good at home that they don't need--or couldn't handle--the extra business.
But businesses of all sizes can and do thrive globally, and the time to explore international opportunities is now, McCarty asserts.
"When the U.S. economy slows, American companies must be immediately ready to sell their goods and services in foreign markets," he says. "If these markets are ignored while their demand is weak and ours is strong, we won't be able to sell abroad so easily when the situation reverses itself. Businesses need to establish a global foothold now, or they very well may be left behind."
McCarty's article is based on a 1998-99 study done for the Business Roundtable that examined the impact of exports within several Midwestern congressional districts, including Michigan's 6th and 7th districts. The 6th district encompasses the counties of Berrien, Cass, Kalamazoo, St. Joseph, and Van Buren, along with parts of Allegan. Included in the 7th district are Branch, Calhoun, Eaton, Hillsdale, Jackson and Lenawee, along with parts of Barry and Washtenaw counties.
In Southwest and mid-Michigan, McCarty contends, there are pockets of active exporters, such as in Grand Rapids and Battle Creek, but overall, small- and medium-sized businesses need to increase their exposure to international markets.
But what of the tight labor market? Many businesses are struggling to fulfill all of their domestic orders, and they can't fathom adding to that workload. McCarty says executives might consider alternative sources of labor, such as international business students seeking internships who could help them explore foreign markets. He also suggests tapping into the international knowledge of professionals already associated with the company, such as lawyers, accountants, bankers and others. And the U.S. Department of Commerce provides a number of free resources to businesses interested in learning more about exporting.
"I understand that it's a tight time in terms of finding skilled workers, but business owners really do have to take advantage of these good times to build a foundation that could see them through a recession," he says. "In many cases, there are extra revenues during a good economy that can enable companies to devote additional resources to exploring the international marketplace. In terms of preparing for a stronger and more diversified future, really, it's now or never."
Media contact: Jessica English, 616 387-8400, firstname.lastname@example.org