Greater Richmond Exports
Initiative:
Research Results Briefing
Center for Urban & Regional Analysis (CURA@VCU)
Greater Richmond Partnership
Virginia Commonwealth University
October 21, 2015
Local Public
& Private
Partners
Greater Richmond Partnership:
Chesterfield, Hanover, Henrico, Richmond
Virginia’s Gateway Region:
Chesterfield, Dinwiddie, Prince George, Surry, Sussex,
Colonial Heights, Hopewell, Petersburg
Virginia Economic Development Partnership
10/21/2015
CURA @ VCU
Area Chambers of Commerce:
Other Public
& Private
Partners &
Supporters
Greater Richmond, Hopewell-Prince George, Petersburg, Henrico, Hanover,
Chesterfield, Richmond -- fix names
Virginia Asian Chamber of Commerce
Virginia Hispanic Chamber of Commerce
Virginia Council of CEOs
Virginia Manufacturers Association
GenEdge Alliance, Virginia Bio, RichTech
Retail Merchants Association
Virginia Small Business Development Centers
Virginia Department of Agriculture and Consumer Services
U.S. Small Business Administration
US Commercial Service
10/21/2015
CURA @ VCU
Our Funders
and Technical
Assistance
Providers
10/21/2015
CURA @ VCU
Why This is
Important
10/21/2015
CURA @ VCU
The
Opportunity
is Overseas
10/21/2015
CURA @ VCU
Exporting is
Exporters enjoy higher productivity
Good for
Companies
Source: Bill Burnett, Milwaukee 7
10/21/2015
CURA @ VCU
Exporting is
Exporters grow faster
Good for
Companies
Source: Bill Burnett, Milwaukee 7
10/21/2015
CURA @ VCU
Exporting is
Good for
Exporters become more innovative
two years after starting to export
Companies
Source: Bill Burnett, Milwaukee 7
10/21/2015
CURA @ VCU
Exporting is
Good for
Exporters have higher business value than
their non-exporting peers
Companies
Source: Bill Burnett, Milwaukee 7
10/21/2015
CURA @ VCU
And That’s
Good for the
Regional
Economy
10/21/2015
CURA @ VCU
How Do We
Get There?
• Initial Kick-Off Meeting (April 2015)
• Research – Fact-Finding (April – September 2015)
• Discussion & Strategy Formation (Nov. 2015 – February 2016)
Process
• Next Report-Out (February 2015)
• Finalize Strategy (March
– May 2016)
• Implementation (Summer 2016 and ongoing)
• Monitoring & Follow-Up (Annual)
10/21/2015
CURA @ VCU
Fact-Finding
Process
• Review of literature on exports & Brookings’
Global Cities Initiative (GCI) Documents
• Extensive Research on Data & Metrics
• Interviews w/ local stakeholders (service
providers, businesses, government agencies)
10/21/2015
CURA @ VCU
Today’s
Presentation
• Business Survey (201 participants)
• Focus Groups w/ VALET Program Graduates
• Visits to & Phone Conferences w/ other GCI
communities
• Your Thoughts and Feedback
• Discussion of Next Steps in This Process
10/21/2015
Business Survey
10/21/2015
CURA @ VCU
Business
Survey
Thanks to Brookings & VEDP for Assistance
Thanks to Partners for Distributing Survey
201 responded
More Manufacturing & Professional Services
Fewer Healthcare, Accommodation & Food Services
50% Henrico, 18% Richmond, 8% Chesterfield, 7%
Hanover, 7% Petersburg
10/21/2015
CURA @ VCU
Business
Survey
exporters
• Mostly Canada, UK, China, Mexico, Germany
• Almost half reacted to demand from
company or client overseas – most export to
1 or 2 countries
• Two-thirds received no services from
government or private service provider
• Those who did receive services deemed
them influential in decision to export
10/21/2015
CURA @ VCU
Business
Survey
non-exporters
Product/service cannot be exported
Enough business from domestic market
Lack of financing
non-exporters
15.3%
More interested in expanding in U.S.
Workforce, equipment, etc. at capacity
83% are
46.0%
Concern about foreign cultures/regulations
Do not know what to do to export
20.7%
6.0%
4.0%
10.7%
8.0%
Why not?
10/21/2015
CURA @ VCU
Business
Survey
Nothing
Talked to family and friends
78.7%
2.7%
non-exporters
Talked to business peers
What have non-
Visited websites of VEDP, SBA, etc
9.3%
4.7%
exporters done to
explore exporting?
10/21/2015
Talked to VEDP, SBA, etc.
2.7%
Participated in trade shows
3.3%
CURA @ VCU
Business
Survey
non-exporters
What could get you to consider exporting?
55% -- nothing
45% would consider exporting if:
• easier access to financing
• easier to identify right market
• trouble-free transactions & shipping
• finding the right trade partners
10/21/2015
CURA @ VCU
Business
Export workshops
19.3%
Survey
Training for corporate excutives
11.4%
What
businesses
want
10/21/2015
Overseas trade shows, conferences
Export mentorship & networking
opportunities
13.9%
17.5%
CURA @ VCU
Business
Reduce Government paperwork
20.5%
Survey
Trade missions abroad
7.8%
What
businesses
Export Financing
10.8%
want
Better ports and airports
10/21/2015
7.8%
CURA @ VCU
Business
Survey
What
More free trade agreements
State/National stretegy
11.4%
10.2%
businesses
want
10/21/2015
Cut Taxes
18.7%
CURA @ VCU
Business
Survey
50% of all respondents
stated they are not aware of
federal, state or local government export
assistance
10/21/2015
CURA @ VCU
Focus Groups w/
VALET Program Graduates
10/21/2015
CURA @ VCU
Focus Groups
VEDP’s VALET Program –
w/ VALET
Virginia Leaders in Export Trade
Program
• 2-year, intensive program for selected companies
Graduates
10/21/2015
•
Ready / committed to export or increase exports
• Assistance includes
•
Strategic planning
•
Export services
•
Market research
•
Trade missions & contacts abroad
•
Expense reimbursement
CURA @ VCU
Focus Groups
w/ VALET
Program
Why did your company start exporting?
• Domestic market saturated or declining
• Personal – family connections or personal desire
Graduates
• Bought a company that was already exporting a little
7 manufacturers
2 service businesses
• Acquired by a company that pushed us to do it
• Company has been doing it for many years
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
Concerns or reservations at outset
• None
• Finding manufacturers or distributors abroad
• Cultural differences – finding partners who accept
our way of paying for selling / distributing product
• Protecting our intellectual property
• Local regulations & documentation requirements
• Credit risks & getting paid
10/21/2015
CURA @ VCU
Focus
Groups with
Concerns that arose after starting
• Marketing – convincing countries of our product’s value
VALET
Program
• Currency fluctuation
Graduates
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
Where did you go for help (before VALET)?
• Distributors / Manufacturers’ reps
• Export management companies
• Consultants
• US Commercial Service
• Freight forwarders
• Other VEDP services, e.g., market research
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
10/21/2015
Changes to your organization or business plan
• Changed our product base
• Changed our approach to selling
• Decided to acquire existing businesses rather than
create new franchises
CURA @ VCU
Focus
What might have made exporting smoother?
Groups with
• Class on business in various countries / regulations
VALET
Program
Graduates
10/21/2015
• Knowing where to find services
• Central place to find information – but networking is
also important
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
10/21/2015
What might have made entry into exporting
smoother for you? (cont’d)
• More marketing research
• Knowing more about currency fluctuations &
currency hedging
• Focusing completely on international & doing no
domestic sales
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
How can Richmond MSA increase exporting?
(A) Improve the Fundamentals
• Better infrastructure – roads & shipping w/in US
• Improve labor force, especially
a. Skilled, certified manufacturing workers –
create programs, remove red tape
b. Software engineers
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
How can Richmond MSA increase exporting? (cont’d)
(B) Reduce Tax & Regulatory Burden
• Reduce costs of regulation
• Cut taxes, especially machinery & tools tax
• Lower costs of doing business, especially exporting
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
How can Richmond MSA increase exporting? (cont’d)
(C) Provide Additional Export Services / Publicize
• Help businesses get info – more quickly & efficiently
o One-stop shop
o Better coordination / alignment among service
providers
o Increase visibility of services for SMEs
o Network & referrals system abroad
10/21/2015
CURA @ VCU
Focus
Groups with
VALET
Program
Graduates
How can Richmond MSA increase exporting? (cont’d)
(C) Provide Additional Export Services / Publicize
• Exporting overwhelms SMEs. Localities should direct
them to initial services.
• Mentoring - seasoned exporters help companies in
related businesses:
o Existing business organizations; cluster groups
o Show them how exporting helps their business
10/21/2015
CURA @ VCU
Focus
How can Richmond MSA increase exporting? (cont’d)
Groups with
VALET
Program
Graduates
(D) In General
• Build on 1,000-year role as trading post at Fall Line
• Encourage exporting
• Welcome & celebrate immigrants
• Better planning of jobs & housing location, transit
10/21/2015
CURA @ VCU
Benchmarking with 5 GCI
(Global Cities Initiative)
Communities
9/16/2015
Benchmarking
with 5 GCI
Communities
• Upstate (Greenville-Spartanburg), South
Carolina
• Louisville / Lexington, Kentucky
• Columbus, Ohio
• Milwaukee 7, Wisconsin
• Des Moines, Iowa
10/21/2015
CURA @ VCU
Benchmarking
with 5 GCI
• Single service provider, all “team members”
know their “position” – overcame tensions,
overlapping services and competition
Communities
• All reported more regional collaboration
after Export Strategy implemented
10/21/2015
CURA @ VCU
Benchmarking
with 5 GCI
• Private-sector leadership and “Champions,”
but challenges identifying private-sector
players
Communities
• Export Plan or Strategy and SWOT analysis
• All use Metrics but various measures: sales,
jobs, new exporters, new markets
10/21/2015
CURA @ VCU
Benchmarking
with 5 GCI
Communities
• Most reported there are “enough resources”
from private, state and federal sources, but
sources not well known
• Need for dedicated staff & resources to
sustain initiative
• All focusing on SMEs
• Most integrating FDI into export strategies
10/21/2015
CURA @ VCU
Take-Away Points
10/21/2015
CURA @ VCU
Take-Away
Points for the
Richmond
MSA Exports
Initiative
10/21/2015
• Approach must be Metro wide
• Create Metro Strategy for Export Services,
including “road map” – time horizon of 5 years
• Define Goals and Metrics in the Strategy
Conduct ongoing monitoring & improvements
CURA @ VCU
Take-Away
Points for the
Richmond
MSA Exports
Initiative
10/21/2015
• Greater Richmond has resources for export
services, but better alignment & promotion
needed
• “No wrong door” approach
• Web-based portal connecting the service
providers is suggested as a tool for this effort
CURA @ VCU
Take-Away
Points for the
Richmond
MSA Exports
Initiative
10/21/2015
• Coordinating organization (hopefully existing
organization) should help open
communication & share service load
• Identify public & private “Champions” to put
“face” on exporting and lead peer support
and mentoring.
CURA @ VCU
Take-Away
Points for the
Richmond
MSA Exports
Initiative
10/21/2015
• The target customer should be small and
medium enterprises (SMEs).
• As the Export Strategy gains traction,
integrate it with the region’s Foreign Direct
Investment (FDI) efforts to create holistic
approach to Global Trade.
CURA @ VCU
QUESTIONS OR COMMENTS?
10/21/2015
CURA @ VCU
Next Steps
• Discussion & Strategy Formation (Nov. 2015 – February ‘16)
• Next Report-Out (February 2015)
• Finalize Strategy (March – May 2016)
• Implementation (Summer 2016 and ongoing)
• Monitoring & Follow-Up (Annual)
10/21/2015
CURA @ VCU