Diplomatic Pouch / September 30, 2010
By Larry Luxner
Hughes and India. Lockheed-Martin and Japan. The Port of Baltimore and Mexico. Johns Hopkins University and Afghanistan.
These are just a few of the dozen or so partnerships between Maryland-based institutions and foreign countries showcased Sep. 23 at “Embassy Night” — an international extravaganza that attracted some 300 diplomats, business executives and other VIPs to the Bethesda North Marriott Hotel & Conference Center.
“This is our first nighttime event following our 22-year history of Embassy Day,” said Deborah Kielty, president of the Baltimore-based World Trade Center Institute, one of the night’s three co-sponsors. The other two were Montgomery County’s Department of Economic Development and the Maryland Department of Business & Economic Development (DBED).
The event — bankrolled and promoted by more than 100 companies and cooperating partners including The Washington Diplomat — kicked off with an address by DBED Secretary Christian Johansson, who described Maryland’s efforts to attract foreign investment under very difficult economic circumstances.
“While Maryland’s unemployment rate is still too high at 7.3 percent, and while many businesses are still slow to resume hiring, we are moving out of this recession stronger and faster than most states and the nation,” he said. “We have a lot of work ahead of us, but if there have been any lessons learned from this economic downturn, it’s that we can no longer afford to ignore the fact that our world is growing smaller and more interconnected by the day.”
Johanssen said his agency managed to attract 16 Chinese, Canadian, Swiss, British and other foreign-owned companies to Maryland last year — double the number that came in 2008 and quadruple the number that came the year before.
One year ago, DBED established the Maryland International Incubator, which is already home to 13 foreign-owned companies, with two more in the pipeline, while opening eight foreign trade offices in emerging markets from Colombia to Vietnam.
“Our initiative is focused on increasing assistance to small businesses, creating jobs and leveraging the resources of existing federal and nonprofit partners,” said Johanssen, pointing out that last year, Maryland exported $9.2 billion in goods — with exports so far this year up 14 percent. That means 600,000 jobs directly tied to foreign trade — about a quarter of all Maryland jobs.
Yet there’s lots of room to grow. Only 3 percent of Maryland companies actively export their goods or services, he said.
Helping companies export is a priority for DBED because, he explained, “if you’re a newly exporting company, you will create jobs at roughly four times the rate of a company that isn’t exporting. Such companies add employees almost four times faster than non-exporting firms. What’s more, on average the pay up to 18 percent more than similar jobs in non-exporting operations. But the government can’t do this alone. This really depends on you.”
That theme was echoed by Suresh Kumar, Johanssen’s counterpart at the national level. As assistant secretary for trade promotion at the U.S. Department of Commerce and director-general of its U.S. & Foreign Commercial Service, the Indian-born Kumar supervises 1,500 trade promotion officers in 109 domestic and 126 overseas trade offices.
“The Obama administration focuses on developing and executing programs that spur innovation and put Americans back to work,” he said, calling attention to the White House’s National Export Initiative — which aims to double U.S. exports over the next five years while creating two million American jobs.
Kumar, who held senior corporate positions at Warner-Lambert and Johnson & Johnson before joining the Obama administration, lamented the fact that exports contribute only 12 percent of this country’s GDP, compared to nearly 30 percent for most of Europe, 35 percent for Canada and 47 percent for Germany.
“Less than 1 percent of America’s 30 million companies export, and of those that do, 58 percent are exporting to just one country alone,” he said. “Clearly, we can and must do more to ensure that U.S. businesses capture their full potential.”
No less than 40 countries — including lesser-known exporters like Angola, Benin, Bangladesh and Estonia — sent their senior diplomats to the dinner in Bethesda. Afterwards, more than a dozen Maryland-based companies held networking receptions as potential customers browsed through colorful displays of their products and services.
Perhaps the most engaging speaker of the evening was Dr. Philip Phan, vice-dean of Johns Hopkins University’s Carey Business School.
Phan said the “pressure of ever-increasing global food and energy prices, coupled with the inevitable slowdown of the Chinese giant” will produce economic upheaval in the next 30 years — not to mention growing tension over water and mineral rights and the on-again, off-again debates over free trade.
“These socioeconomic pressures have triggered broad-based protest movements such as the Tea Party here in the United States and the red shirts in Thailand. Such movements are turbocharged by global communications infrastructure and the Internet,” he said.
The problem, said Phan, is that “the ability for corporations to anticipate the local impact” of these technologies is continually eroding. He noted that Twitter alone boasts more than 50 million tweets a day, and already has half a billion users, as does Facebook.
“There has now emerged a new class of political organizers that are just beginning to understand the power of social media. The key to success for corporations and governments is to figure out ways to align themselves with these technologies and the social movements they spawn. Terms like ‘exploiting technology’ will backfire very badly,” he said, suggesting that companies which try to use social media as a public-relations tool will fail miserably.
Phan’s suggestion to his corporate audience?
“Get rid of your customer service department and create a citizens’ relations department,” he advised. “Get rid of the language of control and adopt the language of partnership.”