Export Promotion Strategy Report Summary
Table of Contents
The economic success of any region depends upon the demand for its exports to purchasers outside the metropolitan area, and upon its ability to supply goods and services to its customers and to itself. This report, prepared by RCF Economic and Financial Consulting, identifies the most important export industries in metropolitan Chicago, and reports on simulation studies that indicate which of these industries have exports that have the greatest impact on the local Gross Regional Product.
The six industries identified as having the greatest local "multiplier" effect are chemicals and allied products (including Pharmaceuticals); industrial machinery and equipment; computer and other electric equipment; wholesale trade; air transportation; and finance and insurance.
The report also examines the possibilities for export promotion and import substitution for the metropolitan economy. Major export industries are identified, and suggestions for export promotion are provided. Targets of opportunity for the replacement of imports used by local export firms in their production processes are also identified.
A sample of findings:
Professional and Management Services from Local Sources:
- Four of the major export industries in the region purchase very little of the needed Professional and Management Services from local sources. A sizable increase in those purchases would have a large impact on the local Gross Regional Product.
- Metropolitan Chicago has seven manufacturing industries with a value of exports that exceeds $5 billion per year. Among these, Food and Kindred Products exports a lower percentage of its total output than do the other industries – much of that output is consumed locally. Exports are at least 70% of the output of the Printing and Publishing, Fabricated Metals, and Transportation Equipment industries. Together these seven industries exported $65.2 billion in output produced by local resources in 2007.
A $1 Billion Increase in Export Sales Could Yield…
- Gross Regional Product (GRP) is the value of output produced by the local primary inputs – labor, capital and land. It is considered the best overall measure of the value of output. On average an increase in GRP of $1 billion would mean that 16,430 more people are employed. This report identified three industries in which a $1 billion increase in export sales would generate more than a $1 billion increase in GRP: Industrial Machinery and Equipment, Air Transportation, and Finance and Insurance.
If you're interested in learning more about export promotion, please download the following CMAP strategy report. Comments and criticisms are encouraged.