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Obama Administration kicks off exports ‘road show’ in Minnesota to help small businesses

The Obama Administration this week is using Minnesota as the stage to launch a nationwide effort encouraging small and medium-size businesses to hit the road and sell more of what they make overseas.

Two cabinet members — Commerce Secretary Gary Locke and Agriculture Secretary Tom Vilsack — will be joined by Gov. Mark Dayton and Minneapolis Mayor R.T. Rybak at a daylong event Thursday at the University of Minnesota. Also taking part will be U.S. Trade Representative Ron Kirk, Small Business Administration Administrator Karen Mills and Export-Import Bank Chairman Fred Hochberg.

After nearly a decade of year-over-year growth, state exports of goods fell nearly 16 percent from an all-time high of $17.3 billion in 2008 to $14.6 billion in 2009 at the depths of the Great Recession.  At the same time, total U.S. exports fell by 18 percent to just more than $1.067 billion.

A year ago, President Obama launched a National Export Initiative with a goal of doubling exports by 2014. And as the economy has started to recover, exports have started to grow again.

Minneapolis marks the first stop for the administration’s “New Markets, New Jobs” road show, called for in September’s Report to the President on the National Export Initiative. Over the next 11 months, the effort is intended to reach more than 3,500 small and medium-size companies interested in growing their export business. The Minnesota stop will be followed by events in Los Angeles, Louisiana and Delaware.

Minnesota saw its export numbers rise 18 percent to $12.6 billion through the first nine months of 2010 and it awaits the release of full-year numbers next month. U.S. exports of goods rose more than 20 percent for the full year to $1.289 billion. Export of services also rose nationwide 8 percent to $542 million, according to the Commerce Department.

Coming to Minnesota to launch the small-business export initiative may reflect in part the administration’s desire to be on friendly turf with the newly elected Democratic governor, but the state also presents an interesting and complex export profile.

Minnesota ranks 20th nationwide in export of goods, but it ranked 16th in terms of export-related jobs as recently as 2008 when the Commerce Department reported that 8,100 companies were exporting from the state.

Minnesota also is growing in the diversity of its exports. The computers and electronics sector —a large and diverse collection of products — has ranked as the single-largest export category for more than a decade, but it has been declining as a percentage of the total export pie. It covers everything from integrated circuits to data storage hard drives and components, as well as equipment to manufacture semiconductors.

In 2000, the category stood at $3.8 billion and contributed nearly 40 percent of the state’s total exports. The category peaked in 2006 at $4.3 billion. Last year, it dropped to $3.4 billion and represented only 22 percent of exports.

So far this year, the computer and electronics category is growing again (along with all exports) and stood at $2.9 billion through nine months. Now, however, it represents less than 20 percent of total exports.

Source: Minnesota Dept of Employment and Economic Development

Miscellaneous equipment (which includes medical devices and equipment), transportation equipment, food and chemicals all have been moving up as a percentage of total exports over the past decade.

Export figures by metropolitan area, reported by the International Trade Administration  of the U.S. Census Bureau, are calculated differently than statewide and national sample surveys reported quarterly. The metro data is an actual count of ZIP code-level origin of shipments and, as such, can be biased by the location of distribution centers and consolidators. Nevertheless, it shows some interesting trends.

The Minneapolis-St. Paul Metropolitan Statistical Area was ranked the ninth-largest export market of origin through 2008, posting more than $25 billion. Although the data have not yet been updated from mid-2009, it seems likely that the Twin Cities metro area has maintained a similar rank relative to other metro areas also hit by the recession. The fastest-growing exporter in the region is St. Cloud, which grew exports nearly 40 percent a year, obviously from a smaller base, from 2005 through 2008, to $286 million, according to the trade administration.

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