With 95% of market potential located outside the United States, how can any company ignore global business opportunities today? “Born global” firms, from their inception, seek to maximize competitive advantage by buying and selling goods or services, and utilizing resources in multiple countries. These firms tend to be more entrepreneurial, smaller and more nimble, well-positioned to meet increased demand, and have the ability and management commitment to customize a product for a particular niche market.
Most “born global” firms tend to be technical in nature, due to the rapid changing speed of technological advancements, but more consumer products, niche foods, and luxury goods are following suit. This is good news for Colorado, as our top three exports commodities from the state are high-tech (medical equipment, computers and electronics). The most important question to ask yourself, if you are not already exporting and your company is over a year old, is “Why not?”
The World Trade Center Denver assists many “born global” start-ups. One member company in northern Colorado, BellaAg, with just six employees, designed a temperature bolus for dairy cattle allowing ranchers to monitor temperatures throughout the day via a hand-held device. This technology transformed the way dairy farms are running in many complicated markets, such as Saudi Arabia. The company claims the education received through the World Trade Center Denver contributed to their rapid international growth, with 70 percent of their revenues now coming from foreign markets.
What factors lead “born global” companies to look outside of our borders from the get go? We hear everything from a saturated domestic market to smoothing out business cycles to climate changes and cultural preferences. Whatever the reason, “born global” companies are becoming the new normal. Companies waiting until they are “mature” enough to start thinking globally are falling behind.
Recently, I was shocked to hear the Secretary of Commerce claim that only one percent of U.S. businesses are exporting today. Out of those companies, 60 percent export to only one market – most likely to Canada - our number one export market double that of our second largest, Mexico. Compare this to Germany, where over 25 percent of companies export.
A fear of the unknown may be why most companies don’t pursue global markets today. That is exactly why the World Trade Center Denver has focused on educating companies in the Rocky Mountain Region for the past 25 years on subjects such as “Developing Your Export Strategy,” “Incoterms and Documentation for International Shipping,” “Export and Import Compliance,” “Trade Finance,” and more. Colorado’s exports grew 11 percent over the last year, compared to the U.S. overall growth of only 4.5 percent. Even with this record-breaking growth, Colorado still ranks 35th among states exporting manufactured goods. There is certainly more work to do.
We want to foster an environment with more “born global” firms and help those late to the game to change their mindsets. Let us know what keeps you from going global by contacting me at Karen@wtcdenver.org.
Karen Gerwitz is the president of the World Trade Center Denver, a non-profit trade association facilitating international business to and from the Rocky Mountain Region and its global network of 340 World Trade Centers in over 100 countries.