Exports by small and medium-sized enterprises (SMEs) support an estimated four million jobs in the United States, and SMEs in both manufacturing and services sectors that export are more productive than SMEs that do not export, according to the U.S. International Trade Commission (USITC) in its report Small and Medium-Sized Enterprises: Characteristics and Performance.
The USITC today released the report, which is the last of three studies examining the extent and composition of U.S. exports by SMEs and factors that may disproportionately impede U.S. SME exports. The reports were requested by the U.S. Trade Representative.
As requested, the USITC report examines the characteristics of SMEs that export services, the growth in exports of services, and differences between large firms and SMEs that export services. The report also identifies linkages between exporting and performance of SMEs, the degree to which SMEs operate as multinational firms, SMEs' indirect contribution to exports, and impediments which disproportionately affect SMEs' exports. The report identifies gaps in SME trade data, but takes advantage of data generated by a USITC survey of thousands of U.S. SMEs and data assembled for the USITC by the Bureau of Economic Analysis and the U.S. Census Bureau relating to services SME exporters and sales of SMEs' foreign affiliates.
Highlights of the report follow:
* SME exports support an estimated four million jobs in the United States.
* Exporting SMEs generate more revenue per firm and have higher labor productivity than nonexporting SMEs.
* Services SME exporters earn a larger share of their revenue from exports than large services exporters. Revenue and employment of services SME exporters grew faster than revenue and employment of large services exporters from 2002 to 2007.
* SMEs tend to sell to foreign customers primarily through direct exports, compared to large multinational firms, which rely more on sales through their foreign affiliates.
* SME direct exports accounted for about 28 percent of total U.S. exports in 2007. When SME sales of intermediate products to large exporters are taken into account, this share increases to approximately 41 percent.
* According to responses to a USITC survey, trade barriers and other constraints impede the ability of SMEs' to export more severely than they do the ability of large firms. SME services exporters were more concerned than large services exporters about insufficient intellectual property protection abroad, foreign taxation, and obtaining financing. SME exporters of manufactured goods were more concerned than large firms about problems in finding foreign partners, difficulty in receiving and processing payments from abroad, and high tariffs.
USITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.
View the full report.
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