The Global Entrepreneur

1
Welcome

• The Global Entrepreneur
• Economic Development through
• International Entrepreneurship
• Community Survivors 3
• James F. Foley, Bradley University
• Alderbrook, WA
• March 7, 2007

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California Beef Company

• If you were a friend of Albert, and as an
  economic developer, what would you tell him?
• What could the role of an economic developer be
  for CBC?
• Do you recognize companies such as CBC?
• What do you think CBC should do?

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The Challenges Facing CBC is Common in U.S.
Businesses

• Distractions with a huge domestic market, small
  U.S. companies often ignore the full potential of
  selling globally
• Training companies tend to assign international
  responsibilities to current employees rather than
  hire in expertise
• Management commitment holds companies back from
  international success

4

• If you have CBC-type companies or Alberts in your
  community, you are missing some important
  opportunities to strengthen your community

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Why International Strength Is So Important for
Local Communities

• Companies that export
• on average pay higher wages
• have higher productivity
• are more competitive
• Communities with companies that export
• more likely to sustain global competition
• support global networks
• have more cosmopolitans with concepts,
  competence, and connections
• are better magnets for investment
• Rosabeth Moss Kanter

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Why Must Companies Go Global?

• What are the fundamental reasons a company should
  expand internationally?
• Why are export sales so important?
• What are the benefits to a company that goes
  global?

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The Fundamental Reasons to Go Global

• 1)
• Common needs in foreign markets / more customers
• Improved economies of scale leads to improved
  profits
• 2)
• Decreasing domestic customer base
• Increasing domestic regulations
• 3)
• Lower labor, material, or other resource costs

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The Fundamental Reasons to Go Global

• 1) Sales to Other Markets
• Common needs in foreign markets / more customers
• Improved economies of scale leads to improved
  profits
• 2) Avoid Changing Domestic Conditions
• Decreasing domestic customer base
• Increasing domestic regulations
• 3) Lower Costs
• Lower labor, material, or other resource costs

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So Whats the Problem?It All Seems Obvious!

• What does it take to be successful
  internationally?
• See worksheet When is a company ready to go
  global?

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Top Four Conditions toGo Global

• 1) Management commitment
• 2) In-depth experience with the product or
  service
• 3) Adequate cash flow
• 4) Capacity and capability to produce
  international products or provide the service

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Conditions Not Critical for Success

• International expertise (versus product
  expertise)
• Foreign language ability (though it helps)
• Travel to the foreign markets (though it also
  helps)
• Dont confuse issues that a company can acquire
  (international expertise) versus issues that are
  more difficult to change (such as commitment)

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These Benefits Are Available to Small Companies

• All companies, regardless of size, have the
  opportunity to gain from the benefits of
  expanding globally
• Company size is relative to
• the size of the market
• the size of other competitors
• its ability to move and change quickly

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Top Barriers Stopping Exporting Success

• Lack of management commitment
• Distraction from U.S. market
• Complacency with one or two international markets
• Lack of management training
• Specific trade barriers (tariffs, product
  requirements, logistic costs)

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So Whats the Greatest Impact You Can Have?

• The most important impact an economic developer
  can have on their local businesses is to

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So Whats the Greatest Impact You Can Have?

• The most important action an economic developer
  can have on their local businesses is to
• make them more internationally proactive

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Being More Proactive Means

• Aggressively adding new foreign markets
• Offering adapted products or services for local
  needs
• Leveraging data and resources
• Learning from others, and sharing success

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What Can You Do to Help Your Companies Be More
Proactive?

• Promote learning
• formal learning
• networking best practices
• Provide a world-class environment
• telecommunications
• transportation linkages
• education excellence
• become a magnet (which leads to ..)

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Attracting Foreign Direct Investment to Your
Community

• New companies entering a community can be a
  critical resource
• infusion of capital
• increased workforce
• cosmopolitans come with the company
• builds clusters of excellence

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The Corporate PerspectiveSelecting U.S. Site
Locations

• Legislators
• Grant me the serenity to accept the conditions
  I cannot change, courage to change the ones I
  can, and the wisdom to know the difference.
• So what drives corporate decisions regarding U.S.
  investment locations?

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The Corporate PerspectiveSelecting U.S. Site
Locations

• 1)
• demands by current customers
• need to get closer to customers
• 2)
  
• access to qualified, affordable labor
• access to raw materials, land, transportation
  linkages, technology, telecommunications

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The Corporate PerspectiveSelecting U.S. Site
Locations

• 1) Customers
• demands by current customers
• need to get closer to customers
• 2) Resource, Labor, and other Factors of
  Production
• access to qualified, affordable labor
• access to raw materials, land, transportation
  linkages, technology, telecommunications

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The Corporate PerspectiveSelecting U.S. Site
Locations

• 3)
• tax structure, legal issues, positive?
• Incentives for investment jobs
• 4)
• supportive resources
• networking with peers
• 5)
• Is this a place I want to live?

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The Corporate PerspectiveSelecting U.S. Site
Locations

• 3) Business Environment
• tax structure, legal issues, positive?
• Incentives for investment jobs
• 4) Clusters of Industry Excellence
• supportive resources
• networking with peers
• 5) Public Employee Perceptions
• Is this a place I want to live?

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Facing Reality

• Accepting what can not be changed
• some factor conditions labor, resources,
  weather, perhaps transportation
• Change what can be changed
• increasing connections (inquiries, handling of
  site visits, website, incentives)
• proactive (participating in FDI missions, know
  your competitive advantage)
• positive business environment

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Facing Reality

• And the wisdom to know the difference
• do not waste time and resources on what you can
  not change
• prioritize what can be changed work on short
  and long term objectives
• use your cosmopolitans for planning,
  communications, and site visits

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Five Ways to Attract Foreign Investors

• 1) By being world class
• 2) By increasing your connectivity
• website
• travel and tourism
• 3) Know how referrals work in your state
• 4) Nurture your competitive edge
• 5) Incentives you have to play the game

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Nurture Your CommunitysGlobal Entrepreneurs

• A Global Entrepreneur in a company
• Takes risks
• Acts as a champion for international
• Recognizes the company barriers holding back
  greater international success
• Leverages data and resources
• Above all makes the company more proactive
• Is not an Albert!

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Know Critical Resources Supporting Trade and
Investment

• Colleges and Universities
• trade centers, SBDCs, student projects
• State Trade Departments
• Client counseling, foreign offices
• Federal Programs
• U.S. Commercial Service
• U.S. Foreign Ag Service
• Trade Associations

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Get FundingTitle VIB Business International
Education

• U.S. Dept of Education
• outstanding program to develop local expertise,
  resources, networking
• federal funding level 200,000 over 2 years
  matched 1-1
• funding has been consistent
• must be awarded through a college or university
• http//www.gvsu.edu/bie

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Get FundingMarket Development Cooperator Program

• U.S. Dept of Commerce
• 3 Year grant for community trade development
  require 3-1 match
• Federal funding level 200,000
• excellent for development of resources,
  networking, expertise
• started in 1993, but 2006 no funding
• http//www.ita.doc.gov/td/mdcp

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Get FundingRural Export Initiative

• U.S. Dept of Commerce
• somewhat ad-hoc program but good for small
  projects
• Federal funding level 2,000-5,000
• current funding not formalized
• http//www.export.gov/comm_svc/special_initiatives
  /rei.html

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Thanks!Jim Foley / DirectorInternational
Trade CenterNAFTA Opportunity CenterBRADLEY
UNIVERSITY, PEORIA ILjff_at_bradley.edu

• Questions?