Go out and immediately buy a globe. Maybe that world map or the atlas. With demand at home rock bottom - - American firms need to starting looking abroad. Our economic transformation will require businesses to rely less on selling to Americans and more on selling abroad. The IMF expects growth globally to average 4.3% a year between now and 2014 but only 2.5% in the United States. We appear to be slowly changing - - the share of our exports going to emerging markets topped 50% for the first time in late 2007 and has grown further since.
Expect the export emphasis to be on high-value products and services rather than on labor intensive items. Services should be a key - - from software and film to engineering and oil drilling. As technology advances, more businesses are likely to turn global. A recent survey by the American Institute of Architects found that in 2008 some 7% of its members’ billings came from international work, against only 2.8% a decade earlier. That increase came almost entirely from firms that were already doing international work but had stepped up their efforts. The ease of exchanging information around the world has fuelled fears that even service jobs will be outsourced away from the U.S. - - but those information flows also make it easier to do business overseas.
Take India for example. Kamal Nath, a high-profile politician, has taken on responsibility for roads and highways. His goal is to build 20 kilometers of new highway per day - - and is seeking $41 billion in private-sector investment over the next three to four years to help fund the construction. Mr. Nath declared that of India’s 70,000 kilometers of highways, 16,000 “aren’t worth driving on,” and stated that 40% of India’s fruits and vegetables rot before reaching market because of delays form poor roads and rail lines. Infrastructure companies in India have raised about $6.3 billion since the beginning of 2008 - - IL&FS Transportation Networks Ltd., recently raised $138 million in an offering that began trading March 30.
With 80% of the United States total trade conducted by just 1% of firms - - more U.S. companies will have to look abroad as domestic growth slows. Get the globe.
Expect the export emphasis to be on high-value products and services rather than on labor intensive items. Services should be a key - - from software and film to engineering and oil drilling. As technology advances, more businesses are likely to turn global. A recent survey by the American Institute of Architects found that in 2008 some 7% of its members’ billings came from international work, against only 2.8% a decade earlier. That increase came almost entirely from firms that were already doing international work but had stepped up their efforts. The ease of exchanging information around the world has fuelled fears that even service jobs will be outsourced away from the U.S. - - but those information flows also make it easier to do business overseas.
Take India for example. Kamal Nath, a high-profile politician, has taken on responsibility for roads and highways. His goal is to build 20 kilometers of new highway per day - - and is seeking $41 billion in private-sector investment over the next three to four years to help fund the construction. Mr. Nath declared that of India’s 70,000 kilometers of highways, 16,000 “aren’t worth driving on,” and stated that 40% of India’s fruits and vegetables rot before reaching market because of delays form poor roads and rail lines. Infrastructure companies in India have raised about $6.3 billion since the beginning of 2008 - - IL&FS Transportation Networks Ltd., recently raised $138 million in an offering that began trading March 30.
With 80% of the United States total trade conducted by just 1% of firms - - more U.S. companies will have to look abroad as domestic growth slows. Get the globe.
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