Five Questions with Tim Nowak of the World Trade Center (10-21-11 St. Louis Post-Dispatch)
Exports are a big deal these days.
Missouri companies shipped nearly $13 billion worth of products overseas last year. The bid to boost cargo flights at Lambert-St. Louis International Airport — with or without the seemingly dead Aerotropolis tax credit package — is built around shipping far more. Last week, Congress OK'd free-trade pacts with South Korea, Colombia and Panama. This week, Gov. Jay Nixon is leading a trade delegation to China.
But for many small and mid-sized companies, selling on global markets can be a big challenge. Tim Nowak tries to make it easier.
Nowak is the executive director of the World Trade Center of St. Louis, a small office of experts who help local businesses find customers overseas and navigate foreign markets. They play a key role in helping St. Louis companies sell their goods to the world.
Nowak sat down with the Post-Dispatch recently to take questions on the ins and outs of global trade.
Q: Lots of people are making a big push to boost exports these days. How does that translate into jobs here in St. Louis?
A: I'll speak from personal experience. In my last job, I was director of international sales at a medical device company (O'Fallon, Mo.-based Synergetics). The sales we had internationally truly do contribute to research and development and engineering. We manufactured everything here. And when you're growing the business, inevitably it leads to more opportunities.
Q: For small and mid-size companies in particular, exporting can provide a lot of opportunity, but also a lot of complications. What are some of the biggest challenges you hear from those sort of companies, and how do you deal with them?
A: The most common first thought is: "I have a business plan that I've executed here in the U.S. Can't I just take this same plan and translate it?" The answer is no. We really stress the importance of developing a business plan for your international markets as well. It has to be looked at as an investment — in resources, in time, in people — to put the right systems in place, and it has to come from the top.
It's not just jumping in and responding to the first email you get from Argentina. How are you going to finance it? Have you taken the time to go down there and meet with them? I always go back to this: The most valuable commodity a company has is its brand. You've taken so much time and care to cultivate that brand domestically. Why would you not take that same care for a foreign market?
Q: What will the free trade agreements just approved with South Korea, Colombia and Panama mean for U.S. exporting?
A: I firmly believe it's going to lead to great opportunity. We've always known, with this whole idea of doubling exports, that you can only get so far if the conditions are not right. To be playing on a level field is as important as anything. I understand there are arguments on either side, but at the end of the day it provides the environment for, in our case, Missouri companies to succeed. I see great potential, so much that one of the things we're working on here is to create a resource dedicated to Asia trade. We're going to make it a focal point of our work to proactively go out and ID companies that may not have even thought about it, but may be successful in Korea, China, any of these countries. And we're going to lead a couple of trade missions in the coming year to Asia; certainly Korea will be one of them.
Q: You mentioned a level playing field. What do you tell companies that are worried about regulations or a lack of legal protection in foreign markets, such as the concerns about intellectual property in China?
A: It's a matter of protecting yourself as best you can. We defer a lot of that, obviously, to the international legal community. But, in and of itself, that concern should not be the only reason a company refuses to pursue overseas deals. Look at China. Ten years ago Missouri sold $78 million worth of products there. We're going to pass $1 billion this year. Other companies have found a way to do it. There are all kinds of risks involved, but it's about assessing risk vs. opportunity. It can't be enough to just bury your head in the sand.
Q: A common complaint about globalization and global trade is that it's a race to the bottom, that costs and standards in the U.S. are too high for us to ever win. How do you respond to those concerns?
A: I'd argue that we're seeing companies bringing some of it back, onshoring. It's not just about the labor costs. For some companies that were early to China, yes, and now maybe they're chasing (lower costs) to Vietnam. Well in Vietnam they've got the challenge that infrastructure isn't as good as China's, which adds even more costs.
We've got to look at it as "landed costs." It's not just labor, but shipping and speed to market and everything else. And remember the flip side. All that has gone on in China has created a very real new consumer, someone to whom we can sell U.S.-made products. You've got to look at it full-circle.