In the beginning of 2010, with the economy struggling to produce output or jobs, President Obama devoted a portion of his State of the Union Address to “fixing the problems that are hampering our growth.” One of these problems, he said, was a lack of exports. The president linked an increase in exports to an increase in jobs, stating: “So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.”
View the all the Export Nation interactive maps on our charts page »
If the U.S. is to achieve a significant surge in exports—whether a doubling or not—metropolitan areas will play a huge role. Reflecting their high concentration of the nation’s human and physical capital, metropolitan areas produce 84 percent of the nation’s exports, making them the points of leverage for scaling up trade with the wider world. The 100 largest metropolitan areas alone account for over 64 percent of the nation’s exports, including 75 percent of its service exports.
An analysis of the location of production of U.S. exports, particularly in the nation’s 100 largest metro areas in 2008, and between 2003 and 2008 reveals that:
-
Increasing the nation’s exports holds out the potential of generating a significant number of good-paying jobs in the United States at a time when they are much needed. All told, U.S. exports supported 11.8 million jobs nationally and 7.7 million jobs in the top 100 metro areas in 2008. These jobs amounted to 8.3 percent of the nation’s employment and 8.1 percent of all employment in the largest 100 metros in 2008. These are direct jobs in companies that sell abroad and, to some extent, indirect jobs in firms that are part of the supply chain of exporting companies.
-
The largest 100 metropolitan areas produce most of the nation’s exports. Home to 65 percent of the nation’s population, the 100 largest metropolitan areas produced an estimated 64 percent of U.S. exports in 2008, including 62 percent of U.S. manufactured goods and 75 percent of services. Export activity is highly concentrated. The 10 metropolitan areas with the highest value of exports produced about 43 percent of all the top 100 metro areas’ exports in 2008, even though they contain just 38 percent of the population.
-
Strong manufacturing and patent producing metropolitan areas generate the highest shares of exports from their output. Manufacturing industries are the most export oriented, so metropolitan areas that specialize in manufacturing tend to export the largest shares of their GMP. Export-oriented metropolitan areas are also significantly more innovative, as defined by their rate of patent production. This may be explained by existing evidence that more innovative firms are more likely to export internationally and that activity reinforces innovation through competition.
-
Four metropolitan areas doubled the real value of their exports between 2003 and 2008. Houston doubled exports largely through sales of chemicals, while Wichita, KS doubled exports based on its powerful aviation cluster. Computer and electronics led the doubling of Portland’s exports. New Orleans also doubled the value of its exports over the period, driven largely by oil refining.
-
Export intensive industries pay higher wages than domestic oriented industries in large metropolitan areas. In an analysis of the 94 of the largest 100 metropolitan areas, for every $1 billion in exports of a metro area industry, workers in that industry earn roughly 1 to 2 percent higher wages. Even those exporting industry workers without high school diplomas earn a higher wage. This wage effect can be seen even adjusting for worker characteristics, occupation, or the characteristics of the metropolitan area.
-
Future export growth will come increasingly from large emerging markets. Though Canada and Mexico are the nation’s two largest trading partners, U.S. exports to Brazil, India, and China (the so-called BIC countries) have been increasing rapidly during the last decade, doubling in size between 2003 and 2008. The BIC countries are expected to account for about a fifth of the global gross domestic product in 2010, surpassing the United States for the first time. The metropolitan areas that produce the largest U.S. exports to the BICs are well-positioned to take advantage of the growth of these countries.
To reset its economic trajectory, the United States needs to connect the macroeconomic goal of increasing exports with the metropolitan reality of export production. Public and private sector leaders at the metro level need to collaborate and engage actively to leverage already extant export concentrations to create good paying jobs at home.