Why exporting matters

You can too, with a good export plan. When it comes to making new export sales, businesses often have several questions, among the most common:. While the U. Here are just a few reasons to pursue export sales:. Your competitors are increasing their global market share, and you can too.

The Internet, improved logistics channels, free trade agreements, eCommerce, and the array of available export assistance through the U. Exporting can be profitable for businesses of all sizes. On average, sales grow faster, more jobs are created, and employees earn more than in non-exporting firms. Competitive Advantage. The United States is known worldwide for high quality, innovative goods and services, customer service, and sound business practices.

Risk Mitigation. Most companies that export have an easier time riding out fluctuations in the U. Export Resources. For example, the U. Hence, exports lead to an increase in employment in the nation. Apart from direct employment provided by exports, there is also a spillover effect.

This means that once export workers get paid, they also spend their money to consume goods and services. This leads to even more job creation. As a result, the entire economy develops. Economists often cite the example of China while explaining this point. The unemployment rate in China has been drastically cut down after the export-oriented policies were brought into place. Also, economists often cite the United States example to prove their point.

After World War-2, the United States was a dominant exporter of goods to the world. This period saw a massive rise in employment in the United States. However, soon America became dependent on cheap imports from nations such as China, Japan, and Korea. Now, the unemployment rate has skyrocketed in America. Since the production of goods is not happening in America, the American worker is unemployed!

It is for this reason that countries are now wary of decreasing exports. A fall in exports is treated as an early indicator of impending economic recession. Exports are a very important tool to spur economic growth in a country. This means that exports can also be used to recover from recessions.

The logic behind this is simple. During the recession, there is a negative sentiment in the entire economy. Factories and offices stop giving wage increments. As a result, consumers start deferring their purchases.

The result is that a vicious cycle ensues and production comes to a halt. During the same time, other countries around the world are not suffering from a recession. Hence the consumers in these countries are willing to spend. It is here that exports come into play. Exporters from recession prone countries can send their goods to nations with favorable economic climate. This will increase the local GDP and reduce unemployment.

This puts the economy. The dollar is the most important currency in the world today. It is a reserve currency. This means that international trades happen either in dollar or gold. Essential commodities like oil and gold are priced only in terms of dollar or gold. Hence all countries need dollars for their survival.

Exports are the only way to earn dollars. It is for this reason that exports are considered to be vital to the solvency of a nation.

A thriving economy can suddenly implode in the absence of dollars. This is because they will not be able to import essential commodities. Hence, exports are considered to be the lifeline of ant economy.