Transitioning Economy of the Rocky Mountain West
Report: Mountain West Cities Should Step Up Exports To Drive Economic Recovery
By Jill Kuraitis, 7-26-10
Doubling the exports of goods and services in the next five years would be a “major boon” to metropolitan areas of the Intermountain West.
That’s the conclusion presented by a new study by the Brookings Mountain West Institute which presents a comprehensive collection of quantitative research on how the region can transition to a different economy.
The report says that a jump in exports would bring thousands of good jobs to the region. “Export-related jobs pay relatively well,” the report states. “And for metropolitan area industry clusters and firms, international engagement and competition brings its own benefits of heightened innovation and productivity growth.”
The prospect of such gains is especially attractive in the Mountain zone, moreover, given the present moment of self-reflection in a region that appears faced with the partial breakdown of its traditional migration- and real estate-driven growth machine. With such sources of domestically-driven growth looking less reliable, export-based development holds out one possible new source of sustainable job-creation and broadly shared prosperity.
The Brookings study says there are large overseas markets for US-produced products and services whose potential is not being realized, and that the transformation to a more export-oriented economy will be led by America’s metropolitan areas.
To take advantage of these opportunities, which are crucial to re-balancing our nation’s economy and creating a foundation for our future economic security, we must harness our economic geography, take advantage of the resources in our metropolitan areas, and shape national policies to promote exports by engaging the economic realities of our metros.
In Boise, Phoenix and Albuquerque in particular, the study says, public and private leaders need to actively engage and collaborate to create good-paying jobs.
As to the Mountain West findings, here they are, based on data for the years 2003 to 2008:
1. Exports are an important source of good jobs in the Mountain West and export growth has the potential to generate significant and much-needed job creation in the region. In 2008 fully 454,000 workers in the 10 largest Intermountain region metros were employed in export-related jobs, with thousands of other local jobs dependent on the spending on local services that those earnings generate. What is more, export jobs are good jobs: The typical Mountain metro worker employed in his or her metro’s top export sector earns nearly 1.5 times the wage of the average American worker.
2. The major Mountain region metropolitan areas are not exceptionally large exporters in dollar terms but a number of them export a significant portion of their overall output. Seven out of 10 of the Intermountain West’s large metros depend on exports for larger shares of their gross metropolitan product (GMP) than the nation’s largest 100 metros taken together. Mountain metros, moreover, not only expanded their export sales but also grew more export intensive from 2003 to 2008. Only in Phoenix did output growth outpace export growth overall so that export intensity declined.
3. Services constitute a greater share of export activity in the Intermountain West metros than they do in the average large metro nationally. Service exports—ranging from architecture or engineering work to research and consulting to education and tourism—represent a strength of the Mountain region. Service sales comprise a much larger share of Mountain metro exports, at 45 percent, than they do for the country’s largest 100 metros as a group, which places only 37.5 percent in services. In two Mountain metros—Las Vegas and Denver—services account for the majority of all regional exports. In fact, Las Vegas generated a larger share of its GMP from service exports in 2008 than any other major metro.
4. The Mountain region’s large metros are quite varied in their export specializations. Computer and electronic product manufacturing stands out as one of the region’s clear specializations, and transportation equipment (frequently related to defense); service production, including tourism; and metal manufacturing also distinguish the region’s export map. Across metros, however, the export bases of some economies appear far more diversified than others. And one note of concern: Export earnings in the prominent computer and electronics industry actually fell in seven metros over the five-year period studied, pointing to the need to maintain constant vigilance in the face of changing global markets.
5. Strengths in manufacturing and innovation tend to drive metropolitan export power. Manufacturing industries nationally are the most export oriented, and so metro areas that specialize in manufacturing tend to export the largest shares of their GMP. Export-oriented metropolitan also tend to be significantly more innovative, defined by their rate of patent production—which existing evidence suggests may be explained by more innovative firms being more likely to export by nature and export activity itself reinforcing innovation through competition. Exemplifying this in the West is Boise, the region’s patent leader and number two metro on manufacturing and export intensity indicators.
6. Canada and Mexico remain the region’s leading export markets but major growth opportunities reside in large emerging markets like Brazil, India, and China (the BIC group of countries) as well. With years of potentially tepid domestic sales ahead, companies need to redouble their search beyond the U.S. border for new sources of demand. As it happens, though, exports from the large Mountain metros are no more likely to be destined for Mexico than those from the average large metropolitan area, despite the region’s close proximity. And while five of the Mountain metros capitalized on opportunities farther afield—in the large and rapidly growing emerging markets of the BICs, for example—five stood on the sidelines with below average growth in exports to these markets.
Like this story? Get more! Sign up for our free newsletters.
Comments
Add your comment below
Really? A $10K raise would be good for my bank account. There's nothing resembling news here.
In general graduates of our International Trade Specialist Accreditation Program tend to be accepted in a variety of export oriented roles given the broad scope of knowledge in the areas of Export Marketing, Trade and Customs Procedures, Finance and methods of Payment, and eBusiness with an international trade focus.
The course lasts 8 months and is delivered by online learning, I am pretty confident that the proper application of what is learned in the course will add much more than $10,000 in value to the productivity of any worker in these important operations roles within exporting companies.
Further info about grants and course syllabus can be found at http://www.ebsi.ie/information/training-supports-and-grants
Best of luck to all those helping the Mountain West Cities in their export Growth!
Regards
Thomas Smith
eBSI Export Academy
http://www.ebsi.ie
There was a time when the public sector did not earn the big bucks the private sector did. That has flip-flopped, and now the secure and good paying jobs are in the public sector...for a while. The lagging private sector employment and compensation rates have driven down tax collections which will be addressed by fewer public employees providing fewer services. Obama can't print enough money fast enough to keep up with the disparity between public spending and private side economic doldrums and lesser tax collections.
If you examine the public lands dominated New West, you will find that the major economic driver is local, state and federal government employment. That is hardly exportable. Except for natural resources coming off public lands, and that is now mostly minerals regulated by the Mining Acts of two centuries ago. Timber left that market in the late 1970s. Water is no longer available, and electricity is hampered by the lack of a sufficient grid to dispense it when available and when surplus to local needs due to the vagaries of wind and water, and recent EPA decisions to regulate biomass electrical production with the assumption that burning wood is as bad as burning coal or other fossil fuels. Meanwhile, the proponents of fire in the forests cannot see the hypocrisy of their stance that fire is good and not harmful to the atmosphere. Tell that to the EPA.
So, since the New West has the largest percentage of folks living in the urban area for the whole of the Hew Hess Hay, exports are an urban problem in need of an urban solution. Hardly the bailiwick of the rural New West.
Foreign students pay huge tuitions, double or more than those of US students and maybe four times or more what in state students pay. Spendthrifts that they are, maybe it is up to the higher education folks to gear their schools, or some schools, entirely to education of foreign students, complete with political indoctrination of Blue State idealism. On a profit making basis, of course. Your department is not making a profit, we hire a new chairman. Your classes are not well attended, we hire a new mind for that job. After all, we are exporting education and ideas, for profit, and if you don't cut it, you are gone. It is a business. It is the future of the local economy.
I was reading earlier this year the prospectus for a new university president for USC, the private university in Los Angles. That place raises $450 M a year in donations. Has 620 athletes in NCAA programs. Is the largest private employer in Los Angeles. 19,000 jobs. The new President will direct the endowment, add to it, keep the $450 M a year coming and grow it. Keep three hospitals and 5 ancillary clinics for the poor open, and keep on training 950 medical residents. Run 17 separate schools or programs in a diverse array of academic disciplines, all named schools. That all sounds like a huge economic engine for Los Angeles. Oh, and USC has the largest number of foreign graduate students of any university in the USA. Harvard and Yale might be running the East coast and the Supreme Court, but USC is keeping LA a functioning city even with property tax relief due to non-profit status.
So, if I were in Boise or Missoula, Denver-Boulder or Laramie, I would be taking a hard look at how to gain the resources to make my universities into as big of academic engines to grow economic success as possible. Privatize them, and let them grow themselves to be whatever they can be. If USC can drive LA, it can certainly drive a city in the Mountain/New West. And yes, I know UCLA is in LA, too. But UCLA is public and will never have the potential to grow that the private USC has. Or Harvard. That is the lesson. The gems of US post graduate education are primarily private schools, with some exceptions in Land Grant Universities. They educate the world, and generate a huge local economic impact. The cities they occupy are not the worse for their existence. And those universities attract and keep idea factories germinating alongside the campus every day.