About this episode:
Utah has one of the hottest export economies in the nation, and a new grant supported in large part by JP Morgan Chase & Co. is helping make it easier for small- and medium-sized businesses break into global trade. In this episode of UB Insider, Derek Miller, CEO of the Word Trade Center Utah, which is managing the grant, talks about how it can benefit companies and Utah, as well as weighs in on the current state and forecast of trade across the nation. Subscribe or download this episode on iTunes and Stitcher.
Lisa Christensen: Hello and welcome to UB Insider. I’m Lisa Christensen, Online Editor at Utah Business magazine. Utah has gained a solid reputation for being a business-friendly state and a great place to start or grow a business.
Utah also has a reputation as a strong exporter and there’s a new program in town to help make both of those things a little easier for businesses. The Export Acceleration Grant, funded by a $200,000 contribution from J.P. Morgan Chase & Company. Here to tell us more about the grant is Derek Miller, CEO of the World Trade Center Utah which is managing the grant. Welcome.
Derek Miller: Lisa, it’s great to be with you. Thanks for having me.
Lisa Christensen: So tell me a little bit about the grant. What is it, and how will it help businesses?
Derek Miller: Well it is specifically designed for small and medium sized businesses, of which we have a lot in Utah. About 95% of all our businesses are small and medium sized businesses. It speaks, as you referenced in the introduction, to the robust business environment that we have in Utah. And of course, they contribute a lot by hiring people, giving jobs and giving economic opportunity to Utahns. So what we’re looking at and hoping to do specifically with this grant is to make these grants to these smaller businesses who often their only impediment to being able to compete in the global marketplace is just a little bit of a leg up.
And so this grant program, we expect it will be small grant amounts around $5,000 up to $10,000 will really help give them that leg up. And whatever impediment or stumbling block may be in their way, we want them to be able to overcome that and we want them to be able to do what so many Utah companies have done already and that is to export more Utah goods and services.
Lisa Christensen: You mentioned the robust economy and the large number of small and medium sized businesses. What does having the involvement of an establishment like J.P. Morgan say about outside confidence in Utah’s economy?
Derek Miller: Well it says a lot. Obviously J.P. Morgan Chase is known around the world for doing good business. And so we’re grateful for their support in this grant. But what it really says is that they’re investing in a going concern, and that going concern is Utah’s business environment which of course is made up of Utah businesses. So it says a lot about J.P. Morgan Chase, but it also says a lot about the business environment that we have here in the state of Utah, these investment dollars coming here. And I’m particularly grateful to J.P. Morgan Chase for wanting to focus this effort on small and medium sized businesses.
As I mentioned before, we have so many great businesses around the state of Utah. And one of the really fun things that I get to do in my job is travel all around the state. And so I get to meet, you know, a lot of these people. Entrepreneurs, small business owners in places like Blanding and Monticello and Cedar City and up North of course in Cache Valley and Richfield and everything in between. And it is just amazing to me. I never grow tired and I never have a lack of surprise for the really cool things that are happening around our state.
Lisa Christensen: So with the state’s exporters and all of those businesses doing really well, how does that help the state as a whole even among industries that aren’t involved with exports?
Derek Miller: Well I always tell people that exporting goods and services is just importing money. I mean that’s exactly what it is for our economy. It’s exactly what it is for these small businesses. So if you like money and you want to have more of it, get involved in exporting. And of course the more profitable these businesses are, the more jobs they can create. The more customers that they have, the more people that they need.
You know, when I get around the state and I talk about trade and I talk about exports and I talk about growing markets I use this analogy about, you know, pick your favorite college football team in Utah. Whether you’re a Lavell Edwards Stadium or Rice Eccles Stadium or at Dixie State or up in Logan or anywhere in between, if you were at a game and you were selling hot dogs, why on Earth would you limit yourself to, you know, row 5 in section double B. I mean, of course you would want to sell to everyone in that stadium. You wouldn’t want to limit yourself.
And so the same is true for our businesses in Utah, especially our small businesses in rural Utah. Because the way that they can grow their economy, the way that they can support their community is out of necessity looking at outside markets. They simply cannot be successful by limiting themselves to the markets of their own city, their own town, their own community. They have to look outside that community and so we want to help them do that.
Lisa Christensen: What are some factors that have helped the export economy grow in the last several years?
Derek Miller: Well a lot of it is what we’ve been talking about which are these small businesses, particularly because we have a culture in Utah that is outward looking. We speak the world’s languages, over 300 languages are spoken in daily commerce in Utah. We speak more second languages in Utah than any other state in the nation. Because of that, the experience that many people have, not just in languages but actually living overseas, it gives them a leg up because it removes that mental barrier of doing business in other countries and exporting to other countries. So that speaks to our culture.
And then of course, we cannot overestimate the factor that precious and primary metals play in our exports. They make up roughly a third of all of our exports, after that, information technology. You think of the IT boom that is happening in the Beehive State and we talk about Silicon Slopes, it really is true. It’s remarkable how much we export to the world in the field of information technology.
But then if you think, so those are our top two but if you round out the top five you‘ve got chemicals, transportation equipment and then one of my personal favorites because this is from my own background and how my parents grew up and that’s farming and agriculture. We still do very well in Utah in farming food and ag products and we export a lot of that to the world. So people all around the world are getting and eating Utah products.
Lisa Christensen: So with exporting being such a huge part of Utah’s economy and historically as well as currently, how do national policies affect that economy? You know, there have been a lot of headlines lately about executive orders which are a little uncertain as well as other legislation that has been discussed. So what kind of affect would that have on Utah’s export economy?
Derek Miller: Well it’s a concern for sure. What I would say is that we should not have a one-size fits all national policy in really almost any area. There are very few areas that I can think of where a one-size fits all policy for the whole nation is necessarily good for Utah, specifically on the issue of trade.
Let’s just start by talking about what’s at risk. Utah is a state made up of businesses who have figured out a way to find niches in the marketplace, to be competitive, to do exactly what free enterprise and what free markets require you to do and that’s to figure out a way to be competitive. And our Utah businesses have figured that out to the tune of about $13.5 billion per year that comes into the state of Utah. As I said, exporting goods is just importing money and we’re importing a lot of money, $13.5 billion that goes into our state economy. That supports 22% of Utah jobs. So if you just think about that for a minute, almost one in four jobs in the state of Utah is supported by international business.
And then just a couple other numbers quickly, we’re only one of eight states that has had positive export growth in the last year. We are one of only a handful of states that is actually a trade surplus state. We hear a lot about the trade deficit on the national level, well Utah is a trade surplus state. We export more than we import. And then as we sit here today doing this podcast, Utah is the fourth fastest growing export state in the nation. Now think about that for just a second. A state with three million people in the middle of the Rocky Mountains, with no sea port, fourth fastest growing export state in the United States of America. So it’s remarkable and really gratifying, but at the same time it means that we have a lot to lose. We have a lot at risk in this debate that we’re having in our country right now about trade.
Lisa Christensen: So are there any contingencies in place for a change in legislation or a change in the way that the U.S. as a whole decides to do business?
Derek Miller: Well, I mean, I would say that first and foremost, a trade war, I mean we’ll state the obvious, a trade war would be bad. A trade war is just like a regular war. There are no winners in a trade war. And let’s just take Mexico as an example because that’s what we hear a lot about coming out of Washington D.C. Mexico is Utah’s fourth largest trading partner.
We have seen in the last decade our exports to Mexico increase from $250 million to $850 million. So it’s a lot. A lot. And there’s a lot that goes back and forth. I mean, we have businesses here in Utah that are very successful in the manufacturing industry because they have goods going back and forth from Mexico.
So often people think of trade as a black and white deal, like it’s either coming from Mexico or another country or it’s coming from the United States. But that’s rarely the case. I mean think about your phone just as a quick example. Ask a simple question, where was this phone manufactured? Well there’s almost no wrong answer. I mean there are pieces of that phone that come from all around the world. It’s designed, you know, probably in California. Pieces come from all around the world and it may be assembled in places like Mexico. But we have to be really careful when we talk about trade not to talk about it in terms of black and white.
But to get back to your question, if what we’re talking about on a national level about trade is about getting better trade deals, then amen. I’m all for it. And certainly there are parts of for example, NAFTA, the North American Free Trade Agreement, that need to be updated. It’s over two decades old and there are certainly elements that need to be updated in that. So I certainly support that and I support anything that helps Utah businesses.
But if what we’re talking about is trade wars or we’re talking about tariffs that would then have a retroactive impact on Utah businesses, because you know, if we slap a 20% tariff on Mexico they’re just going to turn around and do the same thing. Then that hurts Utah products and that hurts Utah consumers. And if what we’re talking about is protectionism, where what we’re doing is saying protect me because I can’t compete which drives us, drives Utah businesses to have to go down to the lowest common denominator and just operate in a mediocre way then no, absolutely I am not supportive of that. I am not supportive of that kind of policy that would hurt Utah businesses and more importantly Utah jobs and Utah families.
Lisa Christensen: Are there any things that states that aren’t doing as well in their export economies can learn from Utah?
Derek Miller: Yeah. Well Utah is the model in so many ways. And exports and international business is really top among them. I’m glad you asked that question, it’s a great question. The first thing I would say is that we do need to recognize and we do need to be sensitive to the fact that there are people who feel that they are being left behind by this quote unquote new economy. And it’s not that they just feel that way, in some cases they are being left behind. And it’s those kind of people to whom the anti-trade rhetoric probably resonates the most.
So I would say that number one, individuals, institutions and states need to recognize that yes, there are segments of the population that are being left behind and we cannot be insensitive to it and we cannot ignore it. Now the answer, by the way, is retraining. And that’s where Utah can be an example. We have robust, important retraining efforts that help these individuals to get training and to find jobs in these high growth industries. So the answer where this problem exists is to retrain these individuals and not to retreat from the global marketplace.
Secondly, and it’s really great that this is not a zero-sum game. Any state can do what Utah’s been doing. We have great people but there are great people all over this country. And so it really takes efforts to support them and this sort of brings us back to the grant program and the other services that the World Trade Center Utah provides. We’re able to provide these services free of charge to these companies and of course we’re able to give these grants to help these companies because our business community is supportive. We have terrific members, founding members of the World Trade Center Utah. It’s because of their generosity that we’re able to provide these services to Utah companies without cost to them. So it’s a model that other states ought to look at too.
Lisa Christensen: Well since you brought us back to the grant program, where can people find more information about the grant program?
Derek Miller: We invite your listeners to visit the World Trade Center Utah on the web. They can look us up or find us directly at wtcutah.com and right on that webpage from and center they’re going to see information on how they can participate, how they can apply for these grants. It’s a rolling award, and therefore always open. So it’s not like you’re got to apply by April and it closes by May.
We want as many businesses who feel like they can benefit from this to take a look at our website wtcutah.com, send in an application, see how we can help you. Whether it’s in the area of legal work, consulting work, attending trade shows, attending trade missions, helping with translation, helping with marketing, doing research and analysis on where these companies ought to be located, all terrific areas where this grant money would help them to be able to expand their customer base, increase their profitability, grow their success and add more jobs for more Utahns.
Lisa Christensen: Well great, and we will also have a link to that on our website, so you can check it out there. Thanks so much for coming in and talking with us today.
Derek Miller: Thank you.
Lisa Christensen: Thanks also to Mike Sasich for production help today. Let us know what you think at email@example.com. You can also follow us on social media at @utahbusiness. Thanks for listening.