According to the Brookings Institution, a Washington, D.C.-based non-partisan think tank, companies that export are driving economic growth. Global companies pay higher average wages, contribute more to research and development, and increase productivity through the infusion of new technologies and practices. Companies that do business internationally also enjoy higher revenues, grow at a faster rate and achieve greater corporate valuations than non-exporting companies.
Likewise, the entire region benefits from global exporters. From 2003 to 2012, regional economic output remained flat. Taking a closer look at the figures, non-export derived output decreased 5.7 percent, while exporting grew at 45.4 percent, thereby offsetting the decline in domestic output.
In November 2015, the Milwaukee 7 Regional Economic Development Partnership launched the Export Development Grant Program, presented by JPMorgan Chase & Co. The program provides financial assistance to small and medium-sized enterprises, both new to export and experienced exporters, to enter new markets by accessing resources, overcoming obstacles and seizing on opportunities internationally.
The Export Development Grant Program is part of the Global Cities Initiative, a joint project between the Brookings Institution and JPMorgan Chase. Southeastern Wisconsin is one of 28 regions participating in the project, which began in 2012. By adopting “best practices” from Global Cities programs in other markets, the Milwaukee 7 has created a tailored program to deliver the assistance companies require, as efficiently and timely as possible.
Grants available for variety of export-related projects
The program provides matching funds of up to $5,000 per company. The funding can be used for a multitude of export-related purposes and may also be combined with grants offered by the Wisconsin Economic Development Corp. Companies are asked to provide a narrative explaining how the funding will help grow exports. Any and all uses of the funds will be considered, including: attending foreign tradeshows, attaining foreign approvals, translating marketing material and websites, utilizing the U.S. Commercial Service and attending ExporTech, to name a few.
To date, the M7 Export Development Grant Program has provided just more than $173,000 to 49 companies to assist them in growing their export business. One of the companies to benefit from the grant is Sussex-based Power Test Inc., a 40-year-old maker of dynamometers and custom engineered solutions. Power Test was recognized for export excellence by winning the 2013 Wisconsin Governor’s Export Achievement Award. After completing ExporTech to refine its international growth strategy, the company is currently focused on growing in the Australia and Asia Pacific regions and attended the Land Forces 2016 Tradeshow in Australia this fall.
According to Jeffrey Eineichner, vice president and chief financial officer at Power Test, “We would not be attending this tradeshow without the grant funding provided by the Milwaukee 7.”
Local firm takes ‘smart parking’ concept international
Another regional company that has utilized the program is Milwaukee-based CivicSmart Inc., which acquired an 80-year-old parking meter manufacturer last year to accelerate the growth of its sensor-based “smart parking” solutions. Smart parking uses real-time occupancy data, payment information and mobile systems to increase the efficiency of city parking staff, tell motorists about available parking spaces, use dynamic pricing tools to manage parking demand and increase revenues, and gather data on historical parking patterns to inform data-driven policymaking. In addition to 2,000 municipal clients across the U.S., CivicSmart had a small footprint in Australia and Africa. However, CivicSmart recognized growing global demand for “smart city” solutions, as parking and traffic congestion are major issues around the world.
“The Milwaukee 7 grant will allow us to exhibit at conferences in Barcelona and the Middle East this fall, which will help us expand market awareness of our patented radar sensor. The support has also reaffirmed and sharpened our international focus, and we have closed or are finalizing deals in South America, Europe and Asia,” said Mike Nickolaus, chief executive officer of CivicSmart. “Potential clients, partners and distributors view us differently when we can point to an international footprint, and the Milwaukee 7 is helping us achieve that.”
Gehl Foods set ambitious export goal
Gehl Foods LLC of Germantown is a manufacturer with 410 employees that recently set an ambitious goal to double exports within three years. To achieve this goal, the company decided to attend the PLMA International Trade Show in Amsterdam, with the objective of meeting with prospective customers and distributors, as well as gaining intelligence on the markets in terms of consumer tastes, the competitive environment and regulatory requirements. As a result of the show, the company acquired more than 50 leads around the world, resulting in three new potential opportunities and an abundance of information on several new markets.
In addition to the PLMA tradeshow, Gehl Foods also utilized the M7 Export Development Grant Program to attend ExporTech earlier this year. Juliette Weber, international customer service coordinator for Gehl, was one of the company representatives who participated in ExporTech earlier this year.
“The program is fantastic, as it helped us to develop a formal export strategy document, but also introduced us to all of the exporting resources, programs and incentives to help us make our goals a reality,” Weber said. “It really helped us to find new ways to analyze the international markets beyond those markets in which we are already active.”
There is no one-size-fits-all strategy to grow internationally. The combination of variables is infinite when one considers modifications to product and packing, the end users’ tastes and preferences, the distribution requirements, financing, regulations and, most importantly, the willingness of the company to dedicate the time and resources needed to overcome these challenges.
ExporTech is an export acceleration program to help Wisconsin companies expand their global market reach through targeted export strategy development and execution. It is a highly recommended program and, for this reason, the M7 Export Development Grant Program, combined with a WEDC scholarship, reduces the total cost by 50 percent to incentivize companies in southeastern Wisconsin to participate.
The M7 Export Development Grant Program also fosters an international business culture within the region. The more companies realize the growth potential international markets represent, the more likely they will be to become proactive regarding exports. By continuing to promote the grant program and the resulting company success stories, manufacturers and service providers alike will be influenced to consider opportunities internationally. Even companies that consider themselves to be experienced exporters will benefit from the program.
Growing through foreign direct investment
The second core component of the Global Cities Initiative has centered on creating targeted strategies to attract and leverage foreign direct investment. In the Milwaukee region, mergers and acquisitions accounted for 53 percent of FDI jobs registered since 1991, compared to 47 percent for green field investments. Employment in firms that entered the market via M&A totaled 10,218, while green field investments accounted for 8,968 jobs. The vast majority of these foreign firms are small- to mid-size companies that historically build a broader and larger base of exports and FDI over time as they grow and expand.
Mid-sized firms are often M&A targets as foreign companies look to enter the U.S. market by acquiring an established company. The Milwaukee 7 will identify companies that are potential M&A targets through business calls and other means and, when an M&A deal occurs, respond by contacting the acquiring firm to develop relationships and encourage retention or consolidation. After initial outreach, we work to embed the acquired firm in the region through long-term aftercare that supports the company’s growth.
The Global MKE Trade and Investment Plan combines the export and FDI strategies into a single, highly coordinated plan with a common goal and objectives to strengthen the region’s global connections and support sustainable economic growth. The Milwaukee region’s economic future depends on a focused and aggressive global trade and investment agenda that better positions the region’s firms to compete in world markets. To view the Global MKE Trade and Investment Plan or for more information on the M7 Export Development Grant Program, please visit: http://mke7.com/exporting.
-Chad Hoffman is the export development manager for Milwaukee 7. He can be reached at (414) 287-4156 or email@example.com.