It is easier to sell umbrellas when it is raining. This simple observation is often used to illustrate the principles of supply vs. demand. In the case of the United States jobs crisis it might just hold the answer to a rapid recovery.
We all know there are many Americans struggling to pay their bills right now, and while we’ve been lucky that consumer demand has remained steady throughout the recession it is safe to say that money is tight in the United States. That means businesses can either deal with flat-line sales growth or look to other markets in order to expand. The faster American companies can connect with high demand markets the sooner we will begin to see job growth.
So if America’s disposable income is shrinking where should we turn to expand sales?
The LA Times recently published this list of the top importers and exporters…
(+) = country is exports more than it imports in that category
TOP EXPORTERS 2010 – MERCHANDISE TRADE
-China $1.58 trillion+
-United States $1.28 trillion
-Germany $1.27 trillion+
-Japan $770 billion+
-Netherlands $572 billion
TOP IMPORTERS 2010 MERCHANDISE TRADE
-United States $1.97 trillion
-China $1.40 trillion
-Germany $1.07 trillion
-Japan $693 billion
-France $606 billion
TOP EXPORTERS 2010 – COMMERCIAL SERVICES TRADE
-United States $515 billion+
-Germany $230 billion
-United Kingdom $227 billion+
-China $170 billion
-France $140 billion
TOP IMPORTERS 2010 – COMMERCIAL SERVICES TRADE
-United States $358 billion
-Germany $256 billion
-China $192 billion
-United Kingdom $156 billion
-Japan $155 billion
No surprise we have a deficit in merchandise trade here. In case you haven’t been to Target or Wal-Mart lately you have to dig pretty deep to find American made products. But what this chart does show is we still have valuable assets on the commercial side. Commercial services don’t have the same volume as merchandise, but in general they are high ticket goods and services.
Now that we have a core concept of what services sell well abroad, the next step is to target the markets that desire it most. After analyzing this 2009 trade report I found the countries with the largest commercial services trade deficits were:
Germany -$26 billion
China -$22 billion
Japan -$22 billion
Canada -$20 billion
Korea -$20 billion
Russian Fed -$18 billion
Brazil -$16 billion
Saudi Arabia -$15 billion
These eight countries combine for a commercial services deficit of over $140 billion dollars. That is a significant amount of demand that US business could take advantage of.
In my opinion, the best way to further penetrate these markets would be through a combination of research and business grants. I am certainly not an international business expert, so I can’t offer a detailed plan of action but there are plenty of people in our country qualified for the task. Once the government identifies the most accessible markets it would only be a matter of applying grants to the right industries. This would create jobs, build domestic business assets, and reduce our trade deficit.
Sometimes it easier to take your goods to the customer instead of waiting for someone to ask for them.
