As a nano-technology conference got under way in Akron, the Cleveland Bar Association's International Law Section (www.clevelandbar.org) was examining a different facet of the region's future, "Northeast Ohio's Global Challenge." At the heart of the event was a recently completed study examining company involvement in international trade and potential barriers to growth. Conducted for the Cleveland Bar Association's International Law Section by the Cleveland State University College of Urban Affairs (urban.csuohio.edu) and Cypress Research Group (www.cypress-research.com), the survey provides a baseline view of the degree of involvement area businesses have in global markets.
The Cleveland Customs Service Port, which covers Ohio and parts of Indiana and Kentucky, accounted for $21.4 billion in exports in 2006, said David Yen, executive director of the World Trade Center Cleveland (www.wtccleveland.org). The district ranked 14th of all U.S. customs districts on exports.
Imports to the region reached nearly $56 billion in 2006, Yen continued. This made the Cleveland Customs Service Port the ninth largest importing district and the seventh fastest growing district. Yen's comments set the stage for the introduction of a study of regional businesses "International Business in Northeast Ohio." Screened for their likelihood to be directly involved in international trade, the study reached out to nearly 6,000 companies. Manufacturing companies accounted for 40% of the sample and a like number (41%) of the respondents said they had fewer than 50 employees. Fully two thirds had less than 100 employees.
What makes the region a good place to conduct international business? Survey respondents said location, good transportation infrastructure, skilled labor force and a good industrial base and a good supply chain.
What support services did those businesses receive to assist them in international trade? Shipping and logistics services, legal support, banking and government support led the list.
Most managers responding to the survey wanted to begin or expand international business, but there were barriers they felt would limit their ability to do so. Those barriers included: Language and cultural differences, business cost, trade barriers and regulations, lack of sales representation in other countries, shipping costs and logistics, and currency fluctuations and banking intricacies.
Responding to some of the concerns raised in the study, Ron DeBarr, CEO of the Northeast Ohio Trade and Economic Consortium (NEOTEC, www.neotec.org), pointed to the area's foreign trade zone (FTZ 181) and support for export development offered by NEOTEC and its counterpart organizations in the region as well as the NEOTEC logistics committee. He cited over $300 million in capital investment that had brought 4,000 jobs to the area.
Ricky D. Smith, director of airports for the Cleveland Airport System (www.clevelandairport.com), offered examples of expanded services at local airports and noted that the airport was developing a cargo plan that would address issues raised by carriers and international shippers. Among the challenges, he said, was the need to reorganize the airport layout to better support cargo operations.
On the port side, Stephen Pfeiffer, v.p. of marine services for the Port of Cleveland (www.portofcleveland.com), explained that 95% of global trade to and from the United States moves by water. Referring to David Yen's earlier comment about a strong destination market nearby, he said the Northeast Ohio region could provide a viable opportunity for container traffic arriving on the Atlantic Coast, passing through the St. Lawrence Seaway and into the Great Lakes.
Survey developers Ziona Austrian, Cleveland State University, and Patricia Cirillo, Cypress Research Group, noted they could not find similar surveys from other regions to compare, so they were unable to conclude how the experience of these firms might differ from those in other regions. On both lists of imports and exports, Canada, Mexico, China, Japan, France, the U.K. and Germany were typically among the top 10. Fast growth in trade with India and Vietnam also offered some indication of where new opportunities were developing.
