While the majority of trade in the United States is done by large companies, it is no secret that their small and medium sized cousins (SMEs hereafter) are also eager to take advantage of the many opportunities offered by international activities. One defining aspect of SMEs is that their operations are generally located in one state, though they may have activities in several.

SMEs’ particular location within the U.S. immediately takes on significance for one simple reason. When it comes to international trade and trade assistance, no two states are alike. Few SMEs take these regional facts into consideration but could benefit greatly by learning more about the international activities and programs of their home states.

State Data Is Difficult To Obtain

The typical SME has ample national information available to it. It is easy to find government sources that together provide a wide array of domestic national and state information, from wages and employment to income and sales. It is also pretty simple to find U.S. international information. The government publishes a wide variety of data and analysis about immigration, imports, exports, capital flows, exchange rates, and more.

But what is more difficult is locating information about state international transactions. It is tedious, costly, or next to impossible to find information about many of the above international transactions for a given state or group of states.

How many workers produce exports in Louisiana? How many foreign born workers in Florida are from Argentina and Brazil? What is the value of the business services exported from New York? Can I get an accurate accounting of agricultural exports in Kansas? How much business services does North Carolina import?

Why State Data Is Essential

Why would a company want these kinds of state-oriented data on international transactions? There are several reasons why any company should be interested. First, international trade is becoming more important. If other companies in your state are engaged in more international business, then you might want to know why.

Second, international threats and opportunities are a constant source of change in the business environment. Because of the special supply chain that typifies your state, the impacts in your area may differ significantly from those in other states. To be well informed, you need to know what is going on around you.

Third, state governments have international policy tools that complement or sometimes may substitute or compete with national programs. A business doing international deals needs to know what its state is doing to promote trade.

Fourth, not all states are equal when it comes to assisting internationally-minded businesses. Knowing what other states do is important. A company that sees better support and opportunities in other states can lobby its state government, and failing a good resolution, can always locate to a more supportive place.

What You Can and Can’t Learn

Knowing what you can and can’t learn about a state’s international transactions is equally important. You can find information about a state’s manufacturing exports relatively easily. The U.S. Census publishes state level information for each state’s manufactured exports. This data is very rich, with breakdowns by country destination and industry. You can get monthly or quarterly data, and you can choose between data that is organized by North American International Classification (formerly Standard Industrial Code, SIC Code) industries or by Schedule B Commodity codes.

These sources of data for a state’s manufactured exports can be useful for seeing growth patterns in exports of, for example, pharmaceuticals. You can see how fast your state’s pharmaceuticals exports are growing by country. And you can compare your state’s growth to another state or to the nation.

One weakness in this data is its inability to measure “indirect” exports. For example, if you live in a state that produces steering wheels and some of those steering wheels are assembled into automobiles in another state, you might never know how many of your steering wheels are being shipped to foreign countries. Your steering wheels are indirect exports, but the government statistics are silent about that.

A second problem with the measurement of manufactured exports at state level is that some goods get commingled with others at ports. This problem is especially significant for very homogeneous products that are often stored at ports before being shipped. This means that these products lose their “state identities” and gain the identity of the state of the port of exit. This problem arises because the last party to ship the goods incorrectly completes a form called a Shippers Export Declaration Form (SED).

This form asks for the address of the shipper, as well as the state from which the majority of the value of the item was produced. The last shipper may simply put his own address and state on this form. Thus, states that have a major port often get credited for more exports than they really produce. Other states are credited less.

This problem is especially important for agricultural products. For example, while the U.S. Census Bureau reported Indiana agricultural exports in 2000 to be $289 million, our estimates suggest a range of between $700 million and $3 billion.

State Service Export Data Vital

We all know a preponderance of U.S. employment and a majority of output are classified as services. Plus, manufacturing has become a smaller share of U.S. business for many decades. While most U.S. trade is in manufactured goods, it is also true that trade in services is growing—and at a much faster pace than manufactured goods.

Although we have a large trade deficit in goods, the U.S. has a surplus in services trade. As such, the whole issue of outsourcing relates to the importing or exporting of business services. But the truth is that we know little about the state origins of business and personal services exports.

Even though the U.S. government publishes data at the national level, it publishes no information about the state breakdown. This means we are in virtual information darkness when a state’s firms sell any of the following services to foreigners: shipping, travel, insurance, banking, recreation, entertainment warehousing, health, education and various specific business services (e.g. accounting, consulting, drafting).

If there are regional patterns of change that present international opportunities or threats to specific states, we are unable to find out about them through regularly published official data.

Exports and Employment

The U.S. government used to publish periodic special reports about exports and export-related employment in states. These reports, based on the Census of Manufacturing, were discontinued several years ago.

By studying the production and sales relations of many companies, the Census Department was able to identify the relationship between export sales and export employment. They also made separate estimates of direct manufacturing employment and supporting employment, where the latter included estimates of employment necessary to support the export of a directly exported good (e.g. shipping, warehousing, advertising).

Discontinuing these reports means that anyone interested in understanding more about how much of the state’s labor force is involved with an export supply chain must do the original work himself.

Information on Imports Missing

If you are interested in the number of immigrants, foreign-born persons or U.S. subsidiaries of foreign companies in your state, this information is available, but well concealed in various places in the U.S. Department of Labor and U.S. Department of Commerce. But what you can’t find anywhere are any state breakdown of imports.

The U.S. government makes no attempt to track and publish where goods or services go when they enter the U.S. If, for example, you are sensing more foreign competition for a particular local industry in your state, you have to use your own research time and effort to find out where it is coming from.

Information Is Power

The upshot of this: we identify with states. We mostly live and work in one state, and likely compete in several states. But as of today, we have very little regularly published information about the international economic activities and international policies of our own state or others. We need more information to make sound business decisions. And we need to know if our state governments have the best knowledge about current international changes and opportunities. This kind of information will help us to know if our states are doing the best they can to offer business services and assistance that will support the most conducive environment for international growth and change.

Larry Davidson is a professor of Business Economics and Public Policy at Indiana University Kelley School of Business in Bloomington, IN. Readers may contact him at This email address is being protected from spambots. You need JavaScript enabled to view it. . This article appeared in Impact Analysis, November-December 2004.
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John Manzella
About The Author John Manzella [Full Bio]
John Manzella is a world-recognized author and speaker on global business, competitive strategies and the latest economic trends. He also is CEO of World Trade Center BN, chair of the Upstate New York District Export Council, and founder of The Manzella Report and Manzella Trade Communications Inc. His latest book is Global America: Understanding Global and Economic Trends and How To Ensure Competitiveness.




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