10 Principles in Economic Development

Global Economy

• Have you assessed your area's competitive advantages and disadvantages in the global marketplace?
• How do you encourage businesses to take advantage of international opportunities?
• What are the barriers for businesses to entering the international marketplace and how do you address them?
• How do your infrastructure, work force, and other investments contribute to your global competitiveness?

With the increasingly global economy, a key role for economic development organizations is helping businesses make the transition from targeting domestic markets to taking advantage of international opportunities.

During the 1980s, most state governments recognized the importance of international trade by creating or expanding state trade offices. These offices courted direct foreign investment, offered financial and technical assistance to small and medium-sized businesses to help them in entering export markets, and provided trade leads, among other services. In addition, state export agencies frequently set up overseas offices to establish linkages with foreign markets. With nearly a decade of experience with state-run international trade programs and increasing sophistication about international markets by U.S. companies, these programs are entering a different level. For example, the International Trade Division of the Oregon Economic Development Department (OEDD) is now formally contracting with firms to assist them in entering foreign markets. These contracts specify the department's and firms' objectives in working together, set forth the department's responsibilities to assist the firms, and require the firms to report their international sales to the OEDD.

The state of Wisconsin has sought to make its international trade services more accessible and user-friendly through a 1-800 number. The number, 1-800 EXPORT WIsconsin, is cosponsored by seven utility companies and staffed by Wisconsin Department of Economic Development employees, who provide on-phone and follow-up support.

Operating in a global environment requires changes in the way private firms and governments do business. To sell in international markets, companies must now comply with international quality standards known as ISO 9000 in Europe and, increasingly, in other nations as well. Minnesota technical colleges, which are spread throughout the state, are offering ISO 9000 training for small businesses. This training is important not only for those companies that are selling directly to foreign markets, but also for companies that are suppliers to globally competitive larger U.S. companies.

Infrastructure investments, work force training, and educational priorities should be considered in increasing global competitiveness. State transportation agencies and metropolitan planning organizations are beginning to examine the relationship of transportation investments in highways, transit, rail, air, and water infrastructure to economic development as a result of the federal Intermodal Surface Transportation Efficiency Act of 1991. This historic act shifts much more responsibility to states and regions for setting investment priorities for infrastructure investment and encourages economic efficiency or productivity as the basis for making such investments.

Changes resulting from federal law and state policies offer state and local economic development organizations an opportunity to work with other state and regional policymakers to encourage public investments that increase productivity and contribute to global competitiveness.