Discovery Guides Areas


The Future is Now: U.S. Small Businesses Overcome Export Barriers
(Released August 2008)

  by Peggy Olive  


Key Citations




Globalization is a fact of life in twenty-first century America.
--Daniel Griswold

The U.S. Census Bureau recently reported that identified U.S. exporters - companies that can be linked to export transactions - accounted for $910 billion in exports, up almost 15% from 2005. Small- to medium-sized businesses were responsible for 96% of manufacturer exports (Trembley, 2008). Driving this increase in demand for U.S. exports is strong economic growth abroad, particularly in emerging markets. The global poverty rate has been cut by more than half since 1981, with much of the credit due to market reforms in developing countries. Hundreds of millions of people have joined the rising middle class in China, India, and in reform-minded countries elsewhere in Asia, Latin America, Africa, and the Middle East (Griswold, 2008).

world share of exports by country
Merchandise Exports
graph of exports and imports from 1900 to today
America's Growing Globalization

The Internet, global communications, and an increasingly complex global supply chain have opened opportunities for smaller U.S. firms to supply goods and services to global markets and to larger U.S. companies that trade in those markets (Griswold, 2007). According to the Office of the United States Trade Representative, 95% of the world's consumers live outside the United States (Buchanan, 2007). That is three-quarters of the world's spending power, which represents a huge potential market for U.S. producers in general and for hundreds of thousands of U.S. small businesses in particular. The finance company Intuit has released a report on the future of small business, predicting that those in the skilled trades and crafts will re-emerge as an influential force in the coming decade, using technology and globalization to help them expand. Many of these new artisans will be small and personal businesses producing specialty goods for an increasingly larger pool of customers. The report, sponsored by Intuit and written by the Institute of the Future, predicts the emergence of an economic structure that will drive new business collaborations, creating greater opportunity and profitability for small businesses (Small Business Heyday, 2008). Despite these predictions and the increased demand for American goods and services, many small businesses and entrepreneurs have not realized their potential for global trade.

the Earth from space
NASA Photograph
On the domestic side, U.S. small businesses are faced with unprecedented foreign competition as they compete with low-cost suppliers from abroad. On top of this, small business owners and entrepreneurs realize that a customer can now surf the Internet for lower-cost products originating from anywhere in the world. While many small businesses and entrepreneurs would like to tap into the global marketplace, they may be reluctant because they are intimidated by the impact of globalization on domestic business conditions and by a number of barriers to export markets.

Several studies focus on the obstacles facing small exporters based on surveys and other observations. The Export-Import Bank of the United States, the official U.S. credit support agency, conducts annual competitiveness surveys. The surveys indicate that the number-one concern of respondents is getting paid for their goods and services. A Forrester Research study found that 85% of small-and-medium sized companies with an online presence said that they cannot fill orders internationally, citing shipping as the number-one obstacle (Koch, 2007). Other reasons cited by small business owners for avoiding international markets include lack of information, the high cost of entering export markets, and competition with larger companies. What small companies must realize is that for every obstacle or limitation, there are solutions in the form of private or public support and resource programs (Koch, 2007).

Information for this Discovery Guide taken from the new ProQuest Entrepreneurship Database.

The database includes scholarship, news articles, business plans, videos, charts, graphs, and more! ProQuest Entrepreneurship includes content from top providers of entrepreneurial information such as eClipsNet, John Wiley & Sons ("For Dummies" book series), BizMiner, New Strategist, Vator Inc., Direct Marketing Association, Snapshots, Hoovers and many other sources.

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