Exports: Enriching our Communities
In our last blog we referenced the correlation between declining export sales and increased unemployment in New Brunswick during our recent history. This phenomenon isn’t unique to New Brunswick, however.
In 2014-15 international trade represented more than 60% of Canada’s Gross Domestic Product (GDP), and federal studies show that approximately 1 in 5 Canadian jobs are linked to exports. In fact, it is estimated that without international trade there would be 3.3 million fewer jobs in Canada and that our unemployment rate would jump to approximately 25%. It’s safe to say that exporting is not only vitally important for employment in New Brunswick but across our nation.
Companies that export don’t just support local employment, they enrich our communities in many ways:
Stimulating Innovation- when selling in the fiercely competitive global marketplace it’s crucial to differentiate yourself by constantly improving your product through innovation. Exporters invest in research & development, stimulate the knowledge sector and establish new partnerships that increase the budgets of and work opportunities at universities and research institutions. Often the new R&D can be replicated and applied across various industries.
Enhancing the Workforce- whether they’re selling goods or services most exporters require highly skilled and educated labour to develop products, serve customers, establish a global brand, and manage international regulations. They help attract and retain skilled workers and pay them well, generating increased economic spinoffs in the local community.
Increasing our Global Brand- through their worldwide dealings exporters increase the international brand visibility of their communities. Their buyers and suppliers know that successful company X is located in community Y. Some may wonder, “if they can be successful there, why couldn’t we”? This increased brand visibility can lead to increased investment, immigration and tourism to the community.
Increasing Stability- serving multiple markets enables a business to better weather a downturn or shock in one market. For example, a business only servicing the Greek market would be harder hit over the contraction in that economy over the past several years than a business also servicing China, the U.S., etc. The more exporters in a community, the less likely that community will face sudden layoffs, bankruptcies, or outmigration.
In short, businesses that export, add value to their local communities. They stimulate R&D, manage the risks of a global economy, offer higher wages, and attract skilled workers, investment, and tourism.
As a community, we would be wise to support those businesses looking to grow through exports and ensure existing exporters have the help they need. In our next blog series, we’ll look at how communities and economic development organizations like Ignite Fredericton can play a role.
Adam Peabody, Investment Attraction & Growth Specialist