Why Johnny can't export

Chief Executive, The, April-May, 2006

Here is an abridged online posting from the editor, and how readers reacted. For the full exchange, go to www.chiefexecutive.net.

You'd think that with U.S deficit in goods and services hitting $725 billion in 2005 that a great debate would be taking place about how to spur American exports. But hardly a word is spoken--and that's a tragedy.

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The heart of the issue is small and medium-size companies. The CEOs of many of these companies are sitting ducks. Part of it is their own fault--they haven't learned how to absorb foreign nationals into their senior managements or onto their boards to give them the insight and connections they need. Some haven't been willing to devote the time or money to explore markets. Or perhaps they haven't invested in adapting their goods or services to foreign tastes. These CEOs need a good swift kick in the backside.

But part of the blame can be placed on the doorstep of governments and banks, which have created a nearly impenetrable thicket of complexity. They have created actual disincentives to export. Here's how:

* The U.S. Department of Commerce has become a dumping ground for political appointees and has too many layers of bureaucracy. It is woefully aloof from the local and regional level.

* Getting an export license for a technologically sensitive item is still a nightmare, particularly to China.

* OPIC and the Export-Import Bank are oriented toward major companies that don't really need their help. The Small Business Administration also isn't effective.

* Banks also have a confusing thicket of procedures and paperwork surrounding letters of credit.

There is no one single magic bullet solution, of course. But steps need to be taken to improve the American export infrastructure.