The benefits of exporting include faster revenue growth, higher profit margins, increased access to talent, the ability to pay higher wages, mitigation of risk and improved resilience during and after an economic downturn in any given market. The sectors of Wisconsin’s economy that are key drivers of economic growth—manufacturing; energy, power and controls; aerospace and aviation; water technology; food and beverage; biohealth; forest products; and information technology—tend to exhibit higher-than-average export growth. Yet, only 15 to 20 percent of Wisconsin companies in these sectors export their products, services and technologies.
To help increase export participation by Wisconsin companies in these key sectors, WEDC has awarded a Targeted Industry Project Grant to the University of Wisconsin-Oshkosh, which in turn will make smaller awards to up to 10 nonprofit organizations that provide export support for a specific region of Wisconsin or a specific industry sector.
“Exporting is not a luxury—it’s a necessity, considering that 80 percent of the world’s purchasing power is outside the U.S., as is 95 percent of the world population,” says Katy Sinnott, WEDC vice president of international business development. “North America’s share of the world’s middle class is projected to fall from 18 percent today to just 6 percent in 2030, so companies that care about their longevity must focus on expanding their exports to reach a global customer base.”
Grant funds can also be used to support foreign direct investment (FDI) in these key industries. Research shows that foreign-owned companies export more than locally owned companies, so an increase in FDI can contribute to a broader strategy of increasing Wisconsin’s exports. In addition, attracting new companies into Wisconsin’s driver industries will further strengthen these industry sectors and contribute to overall growth of the state’s economy.
Five organizations have already applied and been approved to participate as partners in this initiative: Milwaukee 7, the Global Water Center, the New North, Chippewa County Economic Development Corporation, and the Small Business Development Center at UW-Parkside. Of the total $650,000 grant amount, this initiative has a remaining $100,000 to be awarded, and requires 2:1 matching of grant funds; applicants can be regional economic development organizations or industry organizations/consortia that serve a significant number of companies in one or more targeted industry sectors.
Goals for the initiative as a whole, across all participating organizations, include assisting 50 Wisconsin companies in expanding their exports; achieving a $250 million increase in these companies’ cumulative export total by Aug. 1, 2020; and securing new commitments for $6 million in FDI by the same date.
On the export side, the implementing organizations’ role will be to fill WEDC’s pipeline for export promotion programs such as ExporTech, Global Trade Ventures and Global Business Development Grants by helping to spread the word about the assistance WEDC offers.
On the FDI side, The Water Council provides an example of how the grant funds might be used: the organization has hired a consultant based in Ireland to be its representative for European markets. The consultant both recruits potential new members of The Water Council and identifies companies and projects in Europe that may be good candidates for investment into Wisconsin, thus strengthening Wisconsin’s FDI networks in the water technology space.
“This initiative will be the largest coordinated deployment of specialized export assistance and FDI development support ever attempted in Wisconsin,” says Sinnott. “Our regional economic development organizations have expressed a very strong desire to deliver these services in their areas, and this initiative allows them to do just that. This initiative will not only improve the competitiveness of Wisconsin’s key industry sectors, but it will also strengthen inter-regional collaboration in a meaningful way.”