Q&A with David Kniepkamp, president of the Southwest Illinois Trade & Investment Council
IBJ: The council has been up and running for a couple of years now …
Kniepkamp: September 2015, our group first got together. Supporters wanted to have an organization responsible for importing, exporting and direct foreign investment in Southwest Illinois. They got the chairs of both St. Clair and Madison County, and put together a list of about 27 people that they wanted to join the group. They sent out invites and we all got together at SIUE. We had a second meeting and elected some officers. At that time (September 2016), I was elected president. The first thing we wanted to do was figure out who we were and what we’re going to be our initiatives.
IBJ: Is that where you’re at now?
Kniepkamp: The area we’re at now is international sales and marketing and direct foreign trade investment. Our area is Southwest Illinois and by definition in Illinois that’s nine counties. There is a need here to promote our area and identify people in our area who have an exporting business.
IBJ: Wasn’t the International Trade Center at SIUE the key to formation of all this?
Kniepkamp: The ITC and (director) Silvia Torres were instrumental. There were a few other people, too. Edie Koch, who is now economic development director in Monroe County, was one. And Frank Miles, the former economic development director in Madison County, was another.
IBJ: You were among the original invitees. So, you had a track record in import/export?
Kniepkamp: We’d had some involvement with ITC, as did some of the others. At Smart Controls (the Fairview Heights company of which he is president), we design and manufacture commercial building automation controls, and we sell to a global economy. Some of our first customers were international — Japan, Singapore, UK, South Africa.
Small companies with limited resources get synergy with the Southwest Illinois Trade & Investment Council. All of a sudden, overnight, there is a resource pool far greater than a small company has available.
You’re brought into contact with experienced, knowledgeable trade experts. Technically, the council is no different than Amazon.com … Amazon doesn’t manufacture anything. They put a customer in touch with a manufacturer. You can find it, get it quick and pay for it seamlessly. Everything that is out there already exists. We don’t have to recreate the wheel. All we have to do is put those exporters in touch with their customers. We get them in touch with the people that can make that happen.
It comes down to educational opportunities, financial opportunities, shipping opportunities, working with governments and contacts in other countries. They know the lay of the land; they know what sells and what doesn’t.
IBJ: I know the council was formed with a strategy in mind. Has it been following that strategy?
Kniepkamp: One of the first things we had to consider was who was on our board. Fundamentally, there are two types of entities, service providers and exporters. The service providers provide some kind of exporting service. It could be the ITC, or education, or a government agency, a banker, a logistics person. But you also have to have the second component, the exporter, the guy who is actually doing it.
IBJ: You have been talking about a trade mission to Chile and Peru?
Kniepkamp: Yes, but no actual trade missions yet. We are also talking about one to Mexico. Not sure which will come first. We’re in the planning stages on both.
IBJ: Maybe in 2019?
Kniepkamp: Oh, yeah, nothing this year. But this year we did have a reverse trade mission where we brought people here — 12 trade delegates from nine countries, all headquartered in Chicago. We toured the whole area. It was a two-day event. We started at SIUE, went to the distribution centers (in Edwardsville), went to the Central Port, visited Walgreens’ (distribution center), Worldwide Technologies, MidAmerica Airport, the caves storage area (in Monroe County) ….
IBJ: What countries were represented?
Kniepkamp: China, Eastern Europe, Scandanavia, some South American countries — it was a diverse group.
IBJ: Anything good come out of that?
Kniepkamp: They didn’t realize the opportunities in our area. You think of Southern Illinois, you think of coal mining and cornfields. They didn’t realize the university systems we have or how the logistical systems work. We have every possibility hubbed right here — rail, road transportation, air freight, the river.
The biggest advantage they saw was that not only did we have this infrastructure but there’s land to boot. It’s not like we’re gridlocked. It’s not like Chicago where you have to tear something down to build something up. Here, it’s where do you want to build, when do you want to start?
It’s interesting, when you do direct foreign investment, who do (visitors) want to see? They want to see the big guys, World Wide Technologies, Walgreen’s, the airport.
But with exporters, the reverse happens. The big (U.S. companies) are already into exporting. They don’t need the trade council. We’re helping the small- and medium-size companies. When we start talking about trade missions, those are our clients.
IBJ: Are there a lot of companies out there that don’t realize they are ripe for exporting?
Kniepkamp: Yes, it’s all about evaluating what you want to do. Obviously, if you make doughnuts in Fairview Heights, you’re probably not going to be an exporter. Why would, say, Peru want your doughnuts?
But this is where the knowledge base comes in. I don’t have to export doughnuts. Why don’t I partner with someone down there? I’ll show them my secret herbs and spices and they’ll start their own shops.
IBJ: Like an international franchise?
Kniepkamp: There you go; this is entrepreneurship.
IBJ: What sectors are good right now for exporting?
Kniepkamp: My bottom line says everything. It’s a world economy. But you have to be careful. We’re a developed country because we have transportation, the infrastructure, the educational system, the financial system. But in developing countries, even some places in Mexico, there are certain infrastructure issues they don’t possess. They may not have a banking system for loans and credit. They may not have a logistical system for transporting goods from Point A to Point B. When you go to these other countries that’s the first thing you want to look at: Are they developed or not?
IBJ: Who are you going to try to entice to come on these trade missions?
Kniepkamp: Well, the first thing is going to be businesses from our area, but we are not going to limit them to that. And the second thing is, are they a legitimate business? There are criteria for that. The third thing is, do you have a desire to export or are you already exporting? The whole idea is to get them to the final end thing — a purchase order and a return on investments. We’re going to use service providers and identify exporters to create a demand for what we are doing. Everything out there already exists. We’re just piecing it together to make it happen for Southwest Illinois.
IBJ: You’ve got a good head start on everything. It sounds like now it’s just a matter of plodding ahead.
Kniepkamp: Implementation. We did the reverse trade mission in April. Then we had a trade mission planned to Mexico in July, but we postponed it because we didn’t think we had the proper participation to go. One or two will happen next year.
IBJ: How much does the council have to pay attention to the administration’s current talk of tariffs and overhauling trade deals? How much of it is a critical factor vs. just noise?
Kniepkamp: Small words, less impact. If the issue is over here (in a particular country), that’s not where we should be hanging our hat. There are other places where the fruit is closer to the ground. You have to look at the stability of the situation. And the politics of the countries you’re going to.
IBJ: How much of your effort is going to be direct foreign investment vs. exporting?
Kniepkamp: That’s a good question. Places like Peru and Chile are inundated with people from the Americanas saying, “buy me, buy me.” You almost have to go down with the attitude that I’d like to establish an opportunity, but I’d also like to invite you back. These trade missions are not going to be just one direction. The first contact isn’t about getting the purchase order per se. It’s about going there a second and third time. These countries want to establish a relationship.
IBJ: I’m sure you’ve got 49 other states doing the same thing?
Kniepkamp: They are, and many areas within the state of Illinois, but that’s OK, that’s competition. It’s all about making it a win-win situation. Hey, if you have something unique you can still sell it. You really have to understand how you fit in the equation.