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ECONOMY

Trade Cities

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Seattle is a leader in getting local businesses to export, but it's not just coastal cities looking abroad.(Getty Images)

It’s probably no surprise that Seattle and its surrounding cities have developed an innovative and comprehensive program to encourage local businesses to increase their exports. After all, Seattle is coastal and cosmopolitan, Asia-facing and technology-embracing, home to world-girdling brands such as Microsoft, Boeing, and Starbucks. The tradition of trading abroad is as deep as the city’s spectacular port.

It’s a bit more unexpected to find northeast Ohio pursuing opportunities in Europe, Asia, and the developing world. In popular imagination, Cleveland and nearby cities such as Youngstown are victims of globalization stranded in a blasted Bruce Springsteenesque landscape of deserted steel mills and rusted cars. In all of these communities, the scars of America’s manufacturing decline are etched in lost jobs and abandoned factories—hulking relics of the nation’s industrial might that are now, as Springsteen recorded in his piercing ode to Youngstown, “just scrap and rubble.”

 

Yet from that stony ground, renewal is sprouting. Companies that produce cutting-edge medical devices, thin-film polymers for display monitors, sophisticated heat-trapping components critical to cell phones, and dozens of other advanced products are expanding production across northeastern Ohio, hiring workers—and selling to markets around the world. “There is this pervasive sense that globalization hasn’t been good to us,” said Brad Whitehead, president of the Fund for Our Economic Future, a Cleveland-based nonprofit that underwrites economic development work. “But perception has not caught up to the fact that the industrial Midwest can be, and increasingly is, competitive in global markets.”

Overall, the United States still imports more than it exports, and the list of products that were formerly made in America remains daunting. Opinion polls show that the public is increasingly souring on free trade. But the familiar narrative of decline and retreat before a tide of low-cost imports doesn’t capture the full ledger of America’s place in the global economy. Exports now equal about 11 percent of total U.S. economic output, about double the level of 1970. And more cities are benefiting from that rising tide of foreign sales than most Americans recognize—often, even in those cities themselves. Access to international markets is already central to the prosperity of many places where protectionism is often a winning political argument.

The Brookings Institution, in an illuminating study last summer, found that exports already account for at least 10 percent of the total economic output in 58 of the 100 largest U.S. metropolitan areas. Across those 100 communities, the study found, exports provide for more than 8 percent of total employment—7.7 million jobs. Fully 40 metropolitan areas have increased their exports by at least 10 percent annually since 2003, after adjusting for inflation. President Obama has set the ambitious goal of doubling American exports over the next five years. But “we already are more export-oriented than we think we are,” said Bruce Katz, director of Brookings’ Metropolitan Policy Program, which conducted the study.

 

Perhaps the study’s most striking conclusion was the breadth of export activity. The 20 cities that most rely on export-related jobs include, not surprisingly, San Jose, Calif., Seattle, and Portland, Ore.—Asia-oriented hubs of high-technology innovation filled with young professionals, bike paths, and coffee bars that offer options of Euclidean complexity. But the list also includes places where the morning coffee run is more likely to McDonald’s or Dunkin’ Donuts: Hartford, Conn.; Rochester, N.Y.; Milwaukee; Greensboro, N.C.; and Toledo and Youngstown in Ohio. Only San Jose (at 22.7 percent) generated a larger share of its employment from exports than did Wichita, Kan. (22.3 percent), where a vibrant global-sales network has developed around civil-aviation powers such as Cessna and Hawker Beechcraft.

Yet in many, if not most, American cities, the importance of exports to the local economy is a mystery, Katz said. “When the president gets up and says, ‘Let’s double exports,’ many local government, civic, and economic officials don’t see themselves in that narrative.” Most cities, Katz said, still define economic development as building stadiums or attracting “10,000 people to live downtown.” Few have constructed a strategy to create jobs by systematically encouraging their businesses to sell into the global market. Formulating such a plan, he lamented, “is an unnatural act in most American metros.”

Bill Stafford agrees. For two decades, he has headed the Trade Development Alliance of Greater Seattle, a pathbreaking effort to expand the region’s opportunities in the international economy. Over that period, he said, the alliance’s efforts “have been copied more overseas almost than in the United States.”

 

This article appears in the December 11, 2010 edition of National Journal Magazine.

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