Tradeology, the ITA Blog

Stefan M. Selig is the Under Secretary of Commerce for International Trade.

Today, I attended the first industry specific all-of-government effort to attract foreign direct investment (FDI) into the United States, the National Aerospace FDI Expo in California. The event reminded me of the evolution of this industry and the abundant potential in the global aerospace market.

Under Secretary Stefan Selig talks about the future of the Aerospace industry.

Aerospace has historically been the keystone of American leadership in the 20^th century, leading into the 21^st – from the defense technology that helped create the strongest military in history, to the space technology we pioneered, to the resulting services and products that have improved people’s lives here and around the world.

While witnessing hundreds of businesses connecting with each other and with local Economic Development Organizations (EDOs), I thought about the innovative and productive workforce that supports this industry. It truly is a testament to the power that the aerospace sector represents. The U.S. aerospace sector produces our country’s largest manufacturing surplus. It has registered an increase in exports during the past five years of more than 50 percent, and directly employs 500,000 American workers. Utility patents in the aerospace sector are twice those of the biopharmaceuticals sector, and the operational profit per employee is consistently higher than the global average.

As the leader of the International Trade Administration, I know that the aerospace industry in the United States can serve as an engine for growth and profits for international manufacturers through foreign direct investment. FDI stock into U.S. aerospace products and parts companies totaled just under $22.5 billion in 2014, growing since 2008 at a compound annual growth rate of nearly 6.3 percent. FDI growth in the aerospace sector outpaced all other industries during that same period. The development and ascendance of the industry; in conjunction with the global explosion of growth, development, and innovation has catalyzed the very industry we see today. Throughout the entire supply chain, this industry sector is more international than we have ever seen before.

That is why work of turning growth opportunities into business realities will continue after this week’s event. The SelectUSA team at ITA is continuously working to cultivate FDI opportunities. We help companies navigate the federal government by coordinating the resources and services of more than 20 federal agencies to address investors’ concerns, including those that relate to federal regulatory issues.

This is also why ITA has an entire Aerospace Team, within our Industry & Analysis unit, dedicated to supporting the industry by creating top-rate commercial intelligence, developing strategies and technical assistance to assist the sector, and connecting companies directly with business partners. Export resources such as the Aerospace Resource Guide have helped many companies learn the basics of exporting within the industry.

And as we look towards the future of Aerospace, a finalized Trans-Pacific Partnership or TPP will offer an unprecedented opportunity to liberalize access for investment by ensuring fair and non-discriminatory treatment of investors. TPP will also strengthen and deepen aerospace supply chains. Aerospace manufacturers will have greater access to inputs gathered from all 12 TPP markets because those inputs will be considered originating and receive equal treatment as a domestically made input or product. We want to help U.S. companies tap into that potential and utilize these new benefits.

ITA is the industry’s primary export resource and should be your first point of contact when looking to sell internationally. Our team of domestic and international trade specialists, located at our Export Assistance Centers in the United States and at U.S. Embassies overseas, is prepared to assist in increasing your export sales.

Brian Larkin is a Senior Policy Advisor in ITA’s Office of Digital Services Industries.

Cloud computing, which allows companies of all sizes to easily and inexpensively access computing resources, has become a key enabling tool for firms in many global markets. It should therefore come as no surprise that corporate cloud spending may reach $191 billion by 2020, more than triple the 2013 total, according to Forrester Research. U.S. providers have leveraged technological expertise, innovative approaches, first-mover advantages, and other strengths to earn leading international positions in the delivery of cloud services. While they are sure to benefit from growing demand, these trendsetting firms still face challenges in some critical markets.

The 2015 Top Markets Report on Cloud Computing explores this global landscape. International Trade Administration (ITA) policy experts and embassy staff contributed to the report, which features profiles of countries in Europe, Asia, and Latin America, as well as an overall ranking.

All but a few of the world’s top enterprise cloud providers are based in the United States. These firms may specialize in bits and bytes instead of the physical shipments that trade discussions often evoke, but they are major contributors to our nation’s exports. In fact, digitally-deliverable services, a category that includes cloud computing, have accounted for over 60 percent of U.S. service exports in recent years and been an area in which the United States enjoys a substantial trade surplus.

The U.S. economy is far from the only one benefiting from the popularity of cloud services, however. These make it easy for companies, particularly small- and medium-sized enterprises (SMEs), to quickly access advanced computing resources without having to invest in and manage costly technical infrastructures. They unlock technologies and platforms that could otherwise be out of reach, enabling firms in all industries to enhance business processes, lower expenses, and raise productivity – a key contributor to broader economic growth. And for those digital startups looking to launch the next must-have app, they provide a host of useful tools. It’s thus little wonder that foreign technology groups like Rovio, Spotify, and Shazam chose U.S. cloud providers to help them achieve global success.

Despite the clear benefits of cloud adoption, some countries are considering or have enacted policies that would limit their domestic companies’ access to these services. These include rules preventing data from moving freely across national borders, such as from an SME in one country to a cloud provider with servers in another, such as the United States. Data flow restrictions undercut economies of scale and make it extremely difficult for cloud firms to offer affordable, reliable access to productivity-boosting resources.

Among other justifications, policymakers may believe that by requiring data to be stored locally, they can stimulate the growth of their domestic technology sector. However, these mandates are far more likely to make it impractical for cloud providers to continue supplying local firms, potentially cutting off a wide array of enterprises from the most sophisticated services available. Accordingly, the European Center for International Political Economy has found that recently proposed or implemented data localization rules in several countries would cause GDP losses.

ITA is a leading voice in the U.S. Government’s global engagement on regulatory issues affecting U.S. cloud providers, such as data localization. Every day, ITA engages with foreign leaders and policymakers, analyzes fast-changing market dynamics, and works with inter-agency colleagues to help ensure that U.S. firms receive equitable market access overseas.

We also strive to provide useful information to U.S. cloud providers big and small as they seek specific export opportunities. We believe that this year’s Top Markets Report on Cloud Computing does just that, and we look forward to hearing your thoughts on it.

By Matthew Hein, International Trade Specialist in the Office of Health Information Technology at the International Trade Administration.  

The Health Information Technology (Health IT) sector has become an important, dynamic sector reshaping the healthcare system in the United States.  As other countries increase investments in their healthcare systems, they are interested in investing in digital products and services, driven by computers and mobile phones, rather than through paper-based systems. As a result, U.S. Health IT companies have become prime candidates to offer the technologies and services needed to meet the requirements of the 96 percent of patients based outside of the United States. The International Trade Administration (ITA) is committed to providing U.S. Health IT exporters the data-driven market intelligence they need to succeed globally – whether finding a company’s next export market or comparing opportunities for first-time exporters.

This is the first Top Markets Report on the Health IT sector, providing exporters with analysis of future export opportunities, and possible barriers companies may encounter overseas. The Health IT Top Markets Report, part of the larger Top Markets Series, includes a methodology used to rank 80 potential export markets, eight country case studies, and several charts and graphs which show the market potential for the sector. The Health IT Top Market Report is forward looking, using data and analytics to project the strongest markets for future export growth; designed to help exporters compare opportunities across borders, identify opportunities for market expansion and/or market entry; and help exporters prepare effective strategies for entering or expanding their presence in foreign markets.

So what does the future hold for the sector? With approximately $7 trillion in healthcare expenditures worldwide, the opportunities available for the Health IT sector are vast. However, since the rules and regulations governing the sector may not be keeping up with the innovations being developed, companies would greatly benefit from counseling and guidance from ITA when exploring opportunities overseas, both from the Top Market Report, but also through the ITA network of resources located worldwide.

Here are some important findings in the report:

1. Japan, Switzerland, Netherlands rank 1^st, 2^nd, and 3^rd in the Export Market Rankings.
2. Several smaller countries (such as Kenya, Saudi Arabia, and Singapore) profiled in the Report offer exciting export opportunities for Health IT companies. Health IT market access for exporters to Low- and Middle-Income Countries may be easier than that found in larger, more developed countries.
3. A high rating of physician worker density/capita (as a proxy for healthcare workers) may result in a less intensive need for Health IT solutions in a country.
4. Current data on mobile phone penetration rates offers an incomplete (and potentially inaccurate) picture of mobile health/telehealth potential in a country.
5. A high prevalence of prepaid mobile phone plans in a country can be a significant encumbrance to widespread adoption of mobile health and telehealth solutions.
6. A high level of healthcare expenditures (used as a proxy for Health IT expenditures) in a country did not necessarily result in a high ranking for a country using the Report’s methodology.

This post has only touched on some of the analysis you’ll find in the full report. I invite you to download the full report for our in-depth market analysis; and welcome feedback on our methodologies, viewpoints, and rankings.