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New Interactive Market Diversification Tool Identifies Top Potential Markets for U.S. Businesses

November 15, 2018

Market Diversification Tool Logo

Jean Janicke is Director of ITA’s Office of Trade Negotiations & Analysis

U.S. companies produce some of the most innovative and high-quality products in the world.  But how does a company figure out where in the world to go next to sell its product?  What if the market conditions change for your current exports and you need to find a new market? The Market Diversification Tool is here to help answer that question.

In the past, a manufacturer might have relied on one data point or market research indicator to figure out its next step, but was unlikely to be able to go to one place to mine multiple data sources.  It could get overwhelming.  Now with the Market Diversification Tool, there is one place to start the market research journey that brings together product-specific and market-level data points across 11 indicators to give you a ranked list of choices.  We field-tested the tool with our Commerce colleagues all over the country to make sure the results match what they would expect from experience and to ensure that the tool is easy to use.

Here’s how it works.  A U.S. producer exporting to at least one market answers two simple questions: what is your product, and where are you exporting now?  A team in Commerce’s Industry and Analysis Unit has figured out an algorithm and collected all the data needed to help you find your next potential market.  The tool applies weights to 11 different indicators, runs calculations based on your input, and gives you a ranked list of recommended markets with scores for each country.

And it is not a black box. The results display all the data the algorithm uses so you can better interpret them. The data can also be exported.  Want to only look at markets in Europe and get help locally once your search is done? The tool allows you to narrow your search to select regions or markets and provides information on your local U.S. Commercial Service Export Assistance Center as well as links to other resources such as Country Commercial Guides.

Example: Producer ready to find its next market

Since there are many small and medium sized cosmetics producers in the United States, let’s take the example of a lipstick producer that currently exports to Mexico.  Here are the results:

The search results show high scores for Canada and the U.K. with a bunch of markets ranked in the 40s.

Export Destination Ranking

In these results we can see that Singapore, with average imports from the United States of $9,283,075, ranked higher than Germany and South Korea, both with higher U.S. export figures.  The results illustrate that the tool does more than just a straight ranking by trade or a listing of FTA partners; it combines multiple factors by weight to generate top export destinations.

Example:  Search When Market Conditions Change

Now let’s take an example of changing market conditions.  A U.S. motorboat producer exports to Belgium, but now the producer faces foreign retaliation in Europe, Canada, and Mexico.

Market Diversification Tool

The search brings up Canada and Mexico and some EU markets, but it also shows opportunities for diversification beyond markets that are retaliating against motorboats.  From this search, a company responding to market changes could start exploring Asia-Pacific options like Australia and Singapore, for example, or consider prospects in Israel.

Example: Regional focus

There are more ways to customize the tool results.  Let’s say a company has limited international travel funds and is visiting a current customer overseas.  The company could use the tool to find the top potential markets in the region. Or if a company is participating in a big regional trade mission like Tradewinds, it could use the tool with a regional selection to focus its travel and meeting choices.  This customization option helps companies make the most of limited resources.

Next steps:

Need help with next steps?  By entering your zip code, you’ll get connected to a Commerce trade office in your area.  For example, the motorboat producer could use the results to explore market research and other programs for Hong Kong and Singapore with a local U.S. Export Assistance Center.

Armed with the ranked list, you are ready to start more in-depth research and find partners in new markets.

Try out our new tool today!

Disclaimer: Consistent with its mission, the International Trade Administration (ITA) provides the information on this website for informational purposes, to assist U.S. exporters seeking to identify potential new export markets. The market rankings provided by the tool do not have official or legal status and should not be taken as a business recommendation or as business counseling. The information in this tool does not constitute legal advice. ITA has taken every effort to ensure that the information presented is accurate and that the algorithm provides useful results; however, ITA assumes no responsibility or liability for any errors or omissions. ITA advises users to independently verify any information contained in this tool prior to relying on it. Users are further advised to conduct their own due diligence and seek the advice of legal counsel before entering into business ventures or other commercial arrangements in these markets. ITA assumes no responsibility or liability for the actions users may take based on the information provided.

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Why Unleashing Veterans’ Entrepreneurial and Leadership Skills in Global Commerce Helps Strengthen America’s Economic and National Security

November 9, 2018

Murat Muftari is a Senior International Trade Specialist in the International Trade Administration’s U.S. and Foreign Commercial Service and founder of the Vets Go Global initiative and a former U.S. Special Forces soldier.

On Veterans Day, November 11, 2018, let us take a moment to honor America’s veterans for their sacrifice and willingness to serve for the common good of a grateful nation. For many veterans, their service continues well beyond the battlefield and into the commercial and private sector where transitioning veterans continue to evolve their mission from military boots to executive suits. Whether we look at veteran-owned or veteran-led businesses, it comes as no surprise that veterans thrive as leaders. Their business leadership skills are particularly well suited for international business, where their understanding of the geopolitical environment and how economic factors play a prominent role in U.S. national security allows them to help unleash American ingenuity and expand economic influence around the world.american flag

This economic influence helps provide economic security, defined as the ability to protect or advance U.S. economic interests in the face of events, developments, or actions that may threaten or block these interests. And this economic security translates to protecting U.S. national security. That is why the International Trade Administration and the Vets Go Global initiative works to better empower veteran-owned and veteran-led businesses to continue their mission of protecting our nation, from the frontlines of war to the frontlines of international commercial activity. The economic well-being of the United States depends on the smooth conduct of national and international commerce, so the U.S. can continue to play a prominent role in shaping the international economic environment.

There are a multitude of tools and resources that the International Trade Administration provides to assist American businesses, all a form of economic means to help achieve national security ends. These tools include offering U.S. Commercial Service export promotion services to help increase American exports and the relative size of the U.S. economy; direct U.S. government support of U.S. companies competing for foreign government contracts through programs like the International Trade Administration’s Advocacy Center; increasing foreign investment in the United States through programs like SelectUSA; maintaining access to foreign markets and reducing trade barriers through U.S. Commercial Service commercial diplomacy efforts; and promoting market-oriented economic policies and free and fair trade agreements that help U.S. companies to compete and win in international markets. Continuing to build an American economy that is more dynamic and more robust than economies elsewhere cannot be taken for granted. That is why we must continue to support veteran businesses and all U.S. businesses with the resources and tools they need to survive and thrive in international markets.

The Vets Go Global initiative will continue to collaborate with private and public organizations that offer resources to veterans by presenting additional avenues of economic opportunity to veteran-owned and veteran-led businesses and helping them survive and thrive in global markets.

I call on the veteran-owned and veteran-led business community to continue to rise to the occasion when opportunity knocks and seek to grow your business in international markets. To get started, and learn more about existing export opportunities and resources, contact the Vets Go Global team at vets@trade.gov or your nearest Export Assistance Center.

Again, I would like to personally thank the brave Americans who have served – as well as their families – and those who continue to serve our country as members of the Armed Forces.

 

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Facilitating Business Investment to Deliver for the American Economy

November 1, 2018

Wilbur Ross is the U.S. Secretary of Commerce.

Today, registration is open for the 2019 SelectUSA Investment Summit, and I am looking forward to another successful event connecting global business investors with growth opportunities in the United States. Next year’s Investment Summit will take place from June 10-12, 2019 in Washington, D.C. at the Washington Hilton.

Throughout its existence, the Investment Summit has been a key contributor to advancing the Department of Commerce’s mission to support U.S. economic growth and create opportunities for hardworking Americans. Past Investment Summit participants have announced $98 billion in new investment projects which have been responsible for creating more than 150,000 American jobs.

susa 2018 summit attendees

The 2018 SelectUSA Investment Summit attracted more than 3,000 participants, including more than 1,000 business representatives from 66 markets.

Those participants include companies like Formosa Plastics, which attended the Investment Summit to find economic development connections in the United States before ultimately announcing a $9.4 billion investment in Louisiana. Grupo Bocar, a tier one automotive parts supplier, attended before deciding to invest $115 million in a facility in Alabama that will support 300 American jobs.

The SelectUSA Investment Summit is where business potential meets business opportunity. Our global Commerce Department team recruits and engages with businesses from around the world that have the desire to invest and the ability to succeed in the United States. Economic development organizations (EDO) representing states and cities from around the country come to the Summit to showcase everything that makes the United States the world’s top destination for business investment.

From decades of experience in the private sector, I’ve come to learn that you need the right people in the room to get deals done. The Investment Summit fosters and provides that environment.

I invite any business that is looking to grow on a global scale to join me at the 2019 SelectUSA Investment Summit. I believe that the time you spend with our team, making connections at networking sessions, talking about opportunities in our matchmaking area, and learning about business trends in our Summit Academy, will pay dividends for years to come.

 

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Meet the Contacts You Need to Succeed in 15+ Indo-Pacific Markets Without Leaving the U.S.

October 18, 2018

Susan Crawford is a Communications Specialist with the U.S. Commercial Service’s Integrated Strategic Communications Team. The U.S. Commercial Service is the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration.

DGM Salt Lake City Utah

Did you know that the United States exported more than $480 billion in goods to Asia last year, and the potential for selling U.S. products in the region is still largely untapped? The Indo-Pacific region is considered the world’s aviation growth engine with several nations planning to expand existing airport facilities and launch new airport development projects. Governments in the region are also budgeting for major defense and security-related acquisitions.

These new developments in the Indo-Pacific region can translate into significant sales opportunities for U.S. suppliers, if you know where to start. If you’re wondering about how to identify promising markets for your products or services, find potential international buyers or avoid costly missteps, the U.S. Commercial Service can help.

The U.S. Commercial Service’s upcoming flagship Discover Global Markets conference will focus on aerospace, defense and cybersecurity opportunities in the Indo-Pacific region. The Discover Global Markets: Indo-Pacific conference will convene U.S. Commercial Diplomats from 15+ markets, foreign buyers from the region, U.S. industry leaders, U.S. OEMs and American exporters in Salt Lake City, Utah on December 10 – 12, 2018 to help U.S. firms export to the region.

The unique format of the Discover Global Markets: Indo-Pacific conference enables attendees to create a customized experience, targeted to their firm’s needs, that may include:

  • Pre-scheduled one-on-one meetings with our 15+ U.S. Commercial Diplomats who will come prepared with preliminary business assessments specific to your company in the markets of interest to you. They can discuss a variety of topics including industry trends, devising the right market entry strategy and refining cross-cultural communication and negotiation techniques.
  • U.S. Commercial Diplomats from the following markets will be available to meet with U.S. companies at the conference: Australia, Bangladesh, Burma, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Papua New Guinea, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
  • Meetings with foreign procurement executives from several Indo-Pacific markets including India, Japan, Malaysia, Singapore, South Korea, Taiwan and Vietnam, who are in search of U.S. suppliers and partners to support their aerospace and defense supply chain.
  • Meetings with U.S. OEMs who are seeking U.S. suppliers for their large Indo-Pacific aerospace and defense projects.
  • Roundtable discussions to learn from and network with expert presenters on topics related to Sales Channels & Project Pipeline, Supply Chain Optimization and Tools for Exporters.

This will be our 18th Discover Global Market Conference and 98 percent of previous attendees said they would recommend the conference to a friend or colleague. Paul Smith, of Astec Aggregate & Mining Group, attended a recent Discover Global Markets conference and said, “This seemed like a perfect opportunity for me to come down and interact and network with people from different countries that we’d like to target. I’ve gotten great feedback from the one-on-one meetings about new strategies that I can try. I’m getting a lot of great information here that I can go back and digest and incorporate into my strategies for the year.”

For more information and to register for Discover Global Markets: Indo-Pacific please visit the conference website, or contact Ms. Shelby Daiek at Shelby.Daiek@trade.gov , 801-524-3091, or Ms. Judy Kornfeld at Judy.Kornfeld@trade.gov, 202-482-1239.

We look forward to seeing you in Salt Lake City and helping your firm discover new opportunities in the Indo-Pacific region.

 

 

 

 

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Building Relationships: The Key to Making Illinois a Top Location for FDI

October 10, 2018

This post is part of SelectUSA’s EDO Spotlight series, highlighting the work of EDOs around the country recruiting foreign direct investment, how that work supports jobs and economic growth across the United States, and how SelectUSA partners with EDOs to support economic development.

This post contains external links. Please review our external linking policy.

Mark Peterson is President & CEO of Intersect Illinois

Foreign direct investment (FDI) is key to the economic renaissance underway in Illinois. With more than 1,800 foreign owned companies already calling Illinois home and contributing more than $100 billion to the state’s GDP, the potential for growth is tremendous.

Relationship building on an international scale is crucial to Illinois’ foreign investment strategy. Over the past year, Intersect Illinois has built strong international relationships while promoting the state’s assets. Intersect has taken part in jobs missions to China, Japan, Germany, Poland, and Italy and hosted multiple delegations from these countries that have directly resulted in investment in Illinois.

The Intersect Illinois booth at the 2018 SelectUSA Investment Summit, June 18-20, 2018.

The Intersect Illinois booth at the 2018 SelectUSA Investment Summit, June 18-20, 2018.

A recent example of the results is Faber-Castell Cosmetics’ announcement of its first North American manufacturing facility in Illinois. The German company’s state-of-the-art $9 million manufacturing plant in Elgin will create 50 full-time jobs. The decision to locate in Illinois came after Intersect Illinois led a trip to Germany, where the delegation (including the governor) met with Faber-Castell’s leaders.

Intersect Illinois also coordinated a visit to China and Japan, that included meetings with companies such as Aisin Seiki (employs 843 people in Illinois), Sakae Riken Kogyo Co., Ltd. (which employs more than 400 in Illinois), and Toyota Boshoku, which has a plant in Lawrenceville. The team also met Caterpillar China, toured Wanxiang Group, and met with more than 60 businesses.

Following the visit, Intersect Illinois welcomed the newly appointed Japanese Ambassador to Illinois on a visit that focused on advancing the state’s business partnerships with Japan. This was part of the consul-general of Japan in Chicago’s Grassroots Caravan program to highlight the contributions of Japanese companies to local economies.

The group toured local Schaumburg companies to see the latest manufacturing innovations and learn more about Illinois’ workforce. The visit reinforced the benefits of foreign direct investment, while showcasing Illinois as a premier location for Japanese companies to grow.

Additionally, Intersect Illinois attended a SelectUSA event in three cities in Italy, meeting with several Italian companies interested in opening operations in the United States. Following the trip, Intersect hosted site tours for Cembre S.p.A, a company from Verona, Italy that attended the SelectUSA event. In August, Cembre opened a sales office in Schaumburg, with plans to distribute its imported products. Intersect also recently hosted site tours for another Italian manufacturer it met in Italy, which is looking to launch its first U.S.-based manufacturing operation.

Through proactive outreach, Intersect Illinois’ project pipeline has nearly quadrupled over the past year; the team is currently working on nearly 100 business attraction projects, more than 50 percent of which are FDI projects. That number is expected to grow as Intersect Illinois continues to market the state’s rich assets around the globe.

With the world’s 17th largest economy, Illinois is a proven global player and an excellent destination for international business. For more details on Intersect Illinois’ comprehensive FDI strategy, or how Illinois supports global companies, visit www.IntersectIllinois.org.

 

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ITA’s Office of Standards and Investment Policy

October 2, 2018

Did you know that ITA has an Office of Standards and Investment Policy? Candice Appiakorang in ITA’s Office of Public Affairs sat down with Eileen Hill, Team Leader for Standards in the Office of Standards and Investment Policy to get an in-depth look into the importance of standards and testing to exporters.

Keep reading to find out how this office helps goods and services to move easily between markets!

Candice: What is the Office of Standards and Investment Policy?Teamwork

Eileen: The Office of Standards and Investment Policy (OSIP) is in the Industry & Analysis unit of the International Trade Administration (ITA). The Standards Team in OSIP focuses on addressing standardization issues before they become market barriers. The Standards Team also seeks to ensure trading partners accept the standards U.S. manufacturers use to satisfy regulatory requirements, which helps our companies avoid re engineering products or undergo unnecessary, costly testing. Additionally, the Standards Team in OSIP works proactively to ensure that U.S. stakeholders can participate in standards development to protect their market access opportunities.

Candice: How do standards and testing support global sales?

Eileen: Standards are the foundation that enables global trade, competitiveness, and technology development. Standards are essential to accelerating the widespread commercialization of new technologies and enabling goods to move easily between markets. Testing demonstrates that a product complies with a specific standard and builds confidence that a product will perform as stated. Together standards and testing help improve access to global markets, thereby strengthening global trade.

Candice: To export successfully, you clearly need to know how to navigate the global standards, testing and regulatory landscape. What are the first steps an exporter should take to become aware of this important information?

Eileen: Export.gov is a helpful resource. ITA’s Country Commercial Guides are an excellent starting point to find everything you need to know about doing business overseas. These guides have a standards and regulations section to help you decide if a market is right for your product or service. The Top Markets Reports from Industry & Analysis include information on the global regulatory landscape for 27 sectors. Exporters should also consider signing up for the free Notify US service, administered by Commerce’s National Institute of Standards and Technology (NIST), to learn about and comment on technical regulations and conformity assessment procedures proposed by trading partners that could impact market access. Information can be customized by sector or country. Another useful website is NIST’s www.standards.gov, which has industry guides, including on the China Compulsory Certificate (CCC) mark. Our trade specialists around the world can help you navigate the full menu of ITA services; first-time exporters should connect with their local U.S. Export Assistance Center..

Candice: What are some tools exporters can use to address specific standards export problems?

Eileen: ITA has a complete toolbox. We can assist in resolving transactional issues via our network of offices around the globe, which can connect with the appropriate foreign ministry or standards body to resolve technical issues. OSIP works to foster public-private partnerships to tackle standardization challenges; connects U.S. and foreign regulators on specific sector issues; and promotes U.S. standardization solutions that underpin emerging technologies. Much of this work happens in regional fora such as the Asia-Pacific Economic Cooperation forum (APEC) and the Association of Southeast Asian Nations (ASEAN). ITA also raises standards issues in ITA-led bilateral exchanges, the commercial dialogues ITA organizes with U.S. trading partners, trade agreement discussions, and at the World Trade Organization.

Candice: And for our readers who have not reached international markets just yet, what are some things they could do to prepare for standards that may impact potential global sales?

Eileen: Get involved in the standards development work relevant to your products! Taking a seat at the table will ensure that your interests are reflected. Contact our office to learn more about standards!

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Manufacturing Leads as Top Sector for Foreign Direct Investment in the United States

September 28, 2018

Maureen Book is a Research Analyst in SelectUSA

With Manufacturing Day fast approaching on October 5, this is a great opportunity to recognize the important role that foreign direct investment (FDI) plays in the U.S. manufacturing sector. Throughout the past 20 years, the manufacturing sector has been the largest recipient of all foreign direct investment in the United States, and as of 2017 it represented nearly 40 percent of the total U.S. FDI position, amounting to $1.6 trillion. This is almost three times the amount of the next largest sector for FDI in the United States: finance.

What types of manufacturing are attracting investment?

Within the manufacturing sector, the chemicals industry is the largest recipient of FDI, reaching $702.7 billion in 2017, or 44 percent of all manufacturing FDI stock, according to the latest data released by the Bureau of Economic Analysis. Diving even deeper, the pharmaceuticals and medicines subsector makes up 74 percent of all chemicals industry FDI, representing nearly $517 billion of investment.

Industry Breakdown of FDI

Source: Department of Commerce, Bureau of Economic Analysis, FDIUS

After chemicals and other manufacturing, the transportation equipment industry is the next largest recipient of FDI within the manufacturing sector, attracting approximately $150 billion in investment. The majority of FDI stock in transportation equipment consists of motor vehicles and parts manufacturing (78 percent).

Not only is the chemicals industry the largest sub sector of manufacturing FDI, but it is also the fastest-growing. Over the past five years, the chemicals industry has experienced an average annual growth rate of nearly 24 percent. Though the computers and electronic products subsector captured only $81.9 billion in FDI stock in 2017, it was actually the second fastest-growing segment of manufacturing FDI, with an average annual growth rate of nearly 14 percent over the past five years. Food manufacturing is close behind, growing at an average annual rate of 13 percent.

Fastes growing subsectors of US MFG FDI Position

Source: Department of Commerce, Bureau of Economic Analysis, FDIUS

Where is manufacturing FDI coming from?

Just as the United Kingdom is the largest source of all FDI in the United States, it is also the largest source of manufacturing FDI (by UBO*). In 2017, FDI stock from the UK amounted to nearly $258.7 billion in the manufacturing sector. The second largest source of FDI in U.S. manufacturing was Ireland, with over $224 billion. Rounding out the top five source markets are Germany, Japan, and France.

In terms of the fastest-growing sources of FDI in U.S. manufacturing, foreign investment from China has grown the most since 2012, with an average annual growth rate of 64.5 percent. Following China are Luxembourg, Brazil, Ireland, and Canada.

Source: Department of Commerce, Bureau of Economic Analysis, FDIUS

Source: Department of Commerce, Bureau of Economic Analysis, FDIUS

FDI in U.S. Manufacturing Supports Jobs, R&D, and Exports

In addition to the dollars that foreign firms are investing in the U.S. economy, foreign firms also support the U.S. manufacturing sector through job creation, investment in research and development (R&D), and contributions to U.S. exports. The latest available data shows that in 2015, foreign majority-owned affiliates employed nearly 2.5 million people in the U.S. manufacturing sector. In the same year, foreign firms also spent $39.7 billion on R&D expenditures in U.S. manufacturing and contributed over $201.9 billion towards U.S. exports.

For more information

Please visit SelectUSA.gov to view industry fact sheets, other industry reports, international and domestic FDI fact sheets, and SelectUSA’s data visualization tool, SelectUSA Stats. Sign up for email updates and follow SelectUSA on Twitter and LinkedIn for the latest updates, compelling infographics, and more.

*UBO refers to the ultimate beneficial owner, the entity at the top of an affiliate’s ownership chain.