By ALAN J. ORTBALS
St. Louis is the newest member of a 28-city, economic development network created by the Global Cities Initiative, a five-year joint project of the Brookings Institution and JPMorgan Chase.
Launched in 2012, the GCI helps business and civic leaders grow their metropolitan economies by strengthening international connections and competitiveness. GCI activities include producing data and research to guide decisions, fostering practice and policy innovations, and facilitating a peer learning network called the Global Cities Initiative’s Exchange.
The Exchange assists metropolitan areas as they develop plans to achieve sustainable growth, first addressing exports and then foreign direct investment. The first step for St. Louis is to develop a metropolitan export plan and that will be done this year, according to Tim Nowak, executive director of the World Trade Center St. Louis.
St. Louis is one of eight metro areas accepted to the GCI Exchange’s 2015 group, the last to be chosen. The Brookings Institution selected metro areas for the exchange through a competitive process based on their readiness and commitment to pursue the exchange’s global competitiveness principles.
“For the exchange, we selected metro areas that are committed to expanding their global economic reach by working together to identify regional competitive strengths and increase exports,” said Marek Gootman, director of strategic partnerships and global initiatives at Brookings. “The eight metro areas selected for this final round represent a growing group of U.S. metro areas that understand the need to embrace the global market to remain competitive in the 21st century economy.”
Brookings has identified exporting as key to high-quality economic growth. According to the institution, rapid urbanization in mature and developing markets is creating a new consumer class, and 79 percent of global GDP growth is projected to occur outside the United States between 2013 and 2018.
Meanwhile, more than 40 percent of job creation comes from existing firm expansion, but only 5 percent of U.S. firms pursue a key method for business expansion — exporting. This global market opportunity paired with the benefits of firm expansion through exports, Brookings reports, makes it imperative for local economies to recognize their distinctive assets and improve global trade and investment strategies.
“The reality here is that the majority of the growth in the 21st Century is going to occur outside of the United States,” Nowak said. “The demand is going to be terrific in Southeast Asia, Brazil, India, etc. We see exports as a critical way to grow our economy.”
Nowak said that there are nearly 3,000 exporters currently in the St. Louis region and that exports have accounted for 20 percent of the growth in the metro area’s gross regional product over the last five years.
A steering committee made up of 32 members from across the region is guiding the local initiative. Over the remainder of the year this committee will be working to craft St. Louis Metro Area Export Plan, tailoring it to our area.
“Brookings doesn’t come in with a cookie-cutter approach,” Nowak said. “Instead, they want each metro area to devise its own strategy. Our challenges here are different from the challenges in Minneapolis or Los Angeles or Chicago, and so our goals and strategies need to be different, too.”
The first step in creating St. Louis’s plan, Nowak said, is to conduct a market assessment to determine what is already going on here relative to exporting.
“We know there are nearly 3,000 exporters in the St. Louis region,” said Nowak. “What we need to find out is where they’re having success. If resources were available and properly positioned, could they expand into other markets? And, more importantly, how can we help already successful companies identify and leverage exporting opportunities globally? The goal is to grow exports.”
While St. Louis already exports a wide range of items including agricultural products and chemicals, our top export is defense related aircraft, according to Nowak. The focus will be on diversifying and expanding that list.
“We want to identify local, state and federal resources, coordinate them and expand them to help our businesses grow exports; grow the number of companies that are exporting; and, in the end, grow jobs,” Nowak said. “We think there is great opportunity because the vast majority of those 3,000 or so exporting companies are small- to medium-sized companies.”
The initiative is region wide and includes America’s Central Port, Southern Illinois University Edwardsville and the Leadership Council Southwestern Illinois among others from the Illinois portion of metro St. Louis.
“The Leadership Council has been supportive of the application and a member of our executive committee, Bob Graebe, Jr., with the ROHO Group, is serving on the steering committee for the initiative,” said Ellen Krohne, the Leadership Council’s executive director. “The Brookings Institution’s Global Cities Initiative is a great way to position our entire region to be able to expand our opportunities and exports, which will help expand our businesses. We think it can help the whole region be more globally connected and more competitive from an economic perspective.”
The 28 members of the GCI range from Tampa Bay, Fla., to Seattle, Wash. While each works to develop their own export plan, the members will work together to forge partnerships between U.S. and international metropolitan areas and advocate for state and national policy changes to promote international trade.
“There’s a strong correlation between exports and jobs,” Nowak said. “That’s why we’re so focused on this and that’s why the collective work that we do to help encourage, guide and prepare companies to connect and sell their goods abroad is going to grow our region economically and it’s going to grow jobs along with it.”
By ALAN J. ORTBALS