Tanita Alexandridis, CITP has something in common with many of the people who choose a career in international business – she has had a passion for world cultures and languages from a young age. This passion inspired her to pursue an education in International Management at McGill University in Montreal, which included a semester abroad at the University of Lausanne in Switzerland.

After completing her studies in 2012, it was clear to her where she wanted to take the first steps in her international career.

“With a Bachelor of Commerce degree in hand, I moved back to Ottawa and I knew Export Development Canada (EDC) was the place I wanted to be! I have been at EDC for four years now, and am really enjoying working for Canadian exporters.”

She began her career with EDC in December 2012 on the Light Manufacturing Sector Team, helping to develop EDC’s business in the life sciences, plastics, and packaging industries, and connecting Canadian exporters in those industries to international opportunities. In 2015 Tanita began taking FITTskills training, starting with the International Trade Finance course and in February 2016 she was promoted to Sr. Associate, Advisory Services.

Export knowledge is power

On EDC’s Advisory Services team, Tanita directs Canadian companies to the wealth of resources and services that exist to help them gather market intelligence, enter their target markets, and mitigate some of the risks of exporting.

There’s a big world out there, and my role is to connect companies to credible sources and reliable partners who can help them make sense of it all.

“My typical day involves receiving inquiries from our customer-facing staff with questions from clients that are not related to EDC’s insurance or financing solutions, but rather to their export strategies or certain challenges they may be facing abroad.”

This involves conducting research to find the right contacts and resources for them – whether from the Trade Commissioner Service, other federal and provincial government partners, or private sector service providers. Tanita then gathers the relevant information into an email package for her colleagues to share with their clients.

“The idea is to arm exporters with knowledge and help them tap into resources that they may not have been aware of previously.”

Learning how to tackle exporters’ every day challenges

Advising clients on their export plans is a big responsibility, requiring comprehensive knowledge of the global trade environment and the opportunities and challenges exporters face. Getting the industry-backed training to build that high level of expertise and establish trust and credibility with her clients is an important part of that responsibility. Tanita completed the FITTskills program over the course of 2016.

The FITTskills program was a great way to supplement my university education with practical content that is relevant to exporters’ everyday challenges. I’ve referred back to my FITTskills textbooks multiple times to answer questions on international logistics or legal and contract issues.

“The courses provide a great framework for understanding how, for example, marine insurance or licensing agreements would typically work in international markets. Once you know those general principles it’s much easier to find information specific to a certain country.”

Tanita faces new challenges every day in her work that serve as both an opportunity for her to make use of her knowledge and experience, and a way for her to grow as a global trade professional.

“Every day I get a bit more insight into how complex exporting can be. Even beyond the challenges of gathering market intelligence and finding customers, there are seemingly countless steps to take before entering a market, such as writing contracts, finding customs and regulatory information, and lining up a freight forwarder.”

Establishing client relationships through trust

Beyond helping exporters get started in new markets, Tanita’s team helps them keep their companies and investments safe so that they can get the most out of their global business ventures.

“A couple of times we’ve had exporters come to us saying they have a great opportunity to work with a partner abroad, but they aren’t sure how to manage their risks. In addition to EDC’s insurance and financing solutions, we helped them gain an understanding of what is typical to include in an international contract, how to protect their intellectual property, and how to conduct due diligence on potential business partners. We also put them in touch with Trade Commissioners who have the industry and market expertise that the exporters were looking for.”

Serving in a role that requires her clients to fully trust in her knowledge and abilities makes it crucial to Tanita to demonstrate her credibility. Earning her CITP®|FIBP® designation gave her the specialized knowledge base she needs to serve present and future clients as she looks forward in her career at EDC.

“Becoming a CITP®|FIBP® was an important step for me to be able to truly live up to my role as an export advisor.”

I’ve built the knowledge to provide meaningful assistance to exporters, and the designation serves as the seal of approval that I know my stuff. I know the designation will continue to be an asset for me no matter what role I take on next.

Tanita has also shared her export expertise by contributing articles to My StartUp Canada, a resource for new entrepreneurs in Canada. We look forward to publishing her original articles in TradeReady.ca soon so stay tuned!

The post Tanita Alexandridis, CITP – Sr. Associate, Advisory Services appeared first on Trade Ready.

Many executives know of the sales & marketing adage known as the Pareto Principle, which claims that about 20 percent of customers produce 80 percent of a company’s sales.

In fact, the 80/20 principle is also applied to disparate activities such as relationships, diets, exercise, distribution of wealth, quality control, software, economics and other interesting sectors of our day-to-day life.

However, in Canada’s case the reverse is true.  In addition, services-producing industries account for more than 70 percent of Canada’s GDP.

Making a case for services                   

In spite of the growing importance of the service sector, the government’s economic reports still concentrate their statistics on manufactured goods.

Statistics Canada describes Canada’s economy as one “divided into two sectors: the goods-producing sector which makes tangible products, and the services-producing sector which is essentially everything else”.

One of the reasons for the catch-all phrase “everything else” is that services are intangible and cannot be easily identified or tracked, therefore making them more difficult for statisticians to trace.

Manufactured goods such as medical and sporting equipment, metal products, petroleum/electronic/computer products, machinery, chemicals, transportation equipment, food, clothing and many other tangible products provide researchers with actual proof of manufacturing and export activity.

These very specific figures are then compared to the competition and become part of Canada’s official statistics.

On the other hand, the “everything else” of the services sector represents intangible activities such as R&D, engineering, telecommunications, financial services, management consulting, insurance, tourism and many others, all of which are almost invisible, untouchable and often very personal.

The impact of services

Apart from the fact that 4 out of 5 Canadians are employed by the services sector, 60 percent of Canada’s fastest growing exports over the last decade were services.

Interestingly enough, un-sexy sectors like finance and insurance services represent Canada’s largest and fastest growing exports today, with management services close behind. Their commonality is that they are all hard to track.

Canada is excelling at selling services

Selling any kind of service is much more difficult than selling a manufactured product. Goods can be touched, tested and physically compared to the competition, while a service often cannot even be seen.

It is based almost totally on the perception or the promise created at first contact, and only later on the service delivered.

In addition, while selling services in one’s own home market can be difficult, the challenge of selling Canadian services in foreign markets is even greater.

In an international situation, the service is being sold by a Canadian to a potential foreign client who speaks another language and follows different business standards and traditions.

Convincing that potential client that a Canadian concept, idea or service would work better than what is readily available in the client’s home turf is often a major undertaking.

In spite of these hurdles however, Canada seems to excel at selling services internationally, since service exports now account for 44 percent of the nation’s international trade.

Furthermore, over the last decade, 3 of Canada’s 5 fastest growing exports were services exports.

Not the end of manufacturing

Manufactured goods represent only 30 percent of Canada’s economy, but this is not the end of Canadian manufacturing because services and products are deeply integrated with each other.

Activities like R&D, engineering, telecommunications and management consulting all help to make Canadian products more competitive abroad.

Economists worry about the competition that natural resources and manufactured products exports face internationally, but it is worth noting that with services comprising so many of the country’s fastest growing exports, Canada’s international economic future remains as bright as ever.

Give Canada’s service sector experts their due recognition

The success of the Canadian services sector has gone largely unnoticed, yet it represents Canada’s strongest recent trade growth, while simultaneously protecting businesses against negative economic cycles.

The 4 out of 5 Canadians working in the service sector are helping to keep Canada in the forefront of international trade, and are vital participants in Canada’s expanding global commerce.

They should be recognized for their importance in our economy.

The post Canada’s service sector expertise is drastically undervalued appeared first on Trade Ready.

What if everything you tried didn’t get you past go?

A chance meeting with a group of potential exporters led to a spirited discussion on how to best enter export markets.

It quickly became apparent that management teams were flying blind, planning for markets that no longer existed, and seemed to forget that if you want to catch the fruit, you must first get under the tree.

Further discussion determined the fundamental problem: managers were not willing or able to apply the same strategies and operating methods that had made them successful at home to export markets.

This problem begs the questions:

• What has changed and why are so few of Canada’s SMEs exporting?
• Why do they try to manage offshore markets differently than home markets?
• Where are the best opportunities for growth – i.e. where is the aforementioned tree?

Canada’s export evolution

Canada’s exporters underwent two powerful shocks, plus a pronounced transition from goods to services, that combined to radically change how Canadian SMEs need to think and operate in global markets.

The “Haves” and “Have Nots”:

Enabled by globalization, Canadian exporters had separated into two distinct camps by 1995: those with global value chains (GVCs) that saw massive offshoring to foreign affiliates and focused on services and knowledge-intensive manufacturing, and those without GVCs that were limited to exporting goods from Canada.

Export sales by foreign affiliates now account for over 50% of Canada’s exports.

They are also growing more than twice as fast as export sales directly from Canada.

Money talks – Trade walks:

The second shock occurred from 2000-2009, when the high Canadian dollar forced an estimated 20,000 manufacturing firms to shut down, with a loss of about 500,000 jobs.

Local actors stepped in, in what had been Canadian export markets, quickly dominating their sectors, and becoming sophisticated competitors.

Manufacturing clusters employing millions of workers in automotive and aerospace manufacturing, ICT, agriculture and chemical industries sprung up, forming tightly integrated supply chains, insisting on local supply and service, and effectively excluding foreign-based exporters from Canada and elsewhere.

Leaving on a jet plane? Not without a work visa:

In 1995, Canada’s (and the world’s) trade was dominated by goods, but by 2008, services accounted for about 50% of Canada’s exports.

Unfortunately, exporting services means either moving people or establishing autonomous foreign affiliates and transferring IP.

Since 2004, companies wanting to export technical and professional services from Canada have faced increasing difficulty in obtaining the necessary visas (often impossible).

They also face competition from rapidly advancing local competitors who are invariably cheaper, and are frequently offshore divisions of other Canadian firms.

The transition from widgets to services:

Manufacturing has moved away from transactional finished goods towards value added (knowledge-intensive) products.

In addition, they are offering related services and maintaining a relationship with the customer for maintenance, upgrades, etc.

Those firms that established GVCs have prospered as they developed solid customer relationships, whereas Canada-based exporters have seen a general decline.\

Exactly where is the new frontier?

Current status:

Canada holds no compelling advantage in any value-added sector. However, many Canadian products and specialized technical and professional services are competitive and in demand.

Exporters have been successful, but most had to leave Canada and set up foreign affiliates to do so.

Canada is a world leader in integrative trade, with well over $800 billion in Canadian direct investment abroad (CDIA), and we would argue that Canada’s most successful exports are corporate divisions or even entire companies, not the products they produce.

This offshoring strategy has paid off, and since 2004 foreign affiliate sales in services have grown by approximately 86%, adding over 200,000 new jobs offshore.

Future expectations:

Over 2,500 examples of Canadian foreign affiliates in Mexico alone, clearly demonstrate that exporting goods from Canada is not a path to growth.

In fact, exporting goods from Canada declined by 7% over the same period as manufacturing growth from Canadian foreign affiliates grew by 20%, and these trends are projected to accelerate.

Market intelligence is critical, but also dangerous on its own without the cross cultural context that drives each market.

Realistically, the only way to obtain unfiltered market intelligence in context is to have a credible local presence in each export market, capable of establishing and maintaining relationships, and responding to change in real time.

The post Facing the new realities we can’t ignore in SME exports appeared first on Trade Ready.

However, according to several recent studies in Canada, the U.S. and the UK, statistics prove that there are significant benefits for companies who export.

While going global will never be completely risk-free, these numbers prove that the potential benefits can outweigh any negatives, and help your company excel like never before.

1. Increased sales and profits

Want your company to be more productive, profitable and grow more quickly? Start exporting or importing.

A 2013 UK survey of exporting companies revealed that companies who begin to export see a 34% increase in productivity in their first year alone, and that exporting companies are 59% more productive, on average, than non-exporting companies.

In the U.S., exporting SMEs estimate that their own revenue will rise by an average of 26.3% in three years, and 42.2% within five years.

A 2015 study by Industry Canada also found that exporting companies, on average, have over double the annual revenue of non-exporting companies ($3.4M compared to $1.6M).

Deloitte also added that exporters earn triple the average three year cumulative return of non-exporters.

To give more specific examples, from 2009-2012, American SME manufacturers who exported grew by 37%, while those who didn’t shrunk by 7%.

American service exporters also grew by 32%, while U.S. companies who only offered services domestically grew by only 24%.

In Canada, in 2012, manufacturers who exported outperformed those who did not by over 30%.

Not only can exporting increase profits, it can also increase growth.

Eighty-five percent of UK companies felt exporting helped them grow faster than they thought possible, while 2/3 of American SMEs, according to Euler Hermes, felt that exporting had contributed to their business growth.

While exporting can help with gradual growth, it can also be the catalyst for rapid growth. From 2009-2011, 10% of exporting SMEs in Canada grew by over 20%, while only 8% of non-exporting SMEs did the same.

Established Canadian companies who export are also twice as likely to plan to grow, and 62% of U.S. SMEs who are already exporting have increased their export activity over the past five years.

Furthermore, 56% of the most ambitious companies in the UK also reported their growth would be mainly through exports, while just 40% of companies anticipating moderate growth said the same.

One of the main reasons for this is that, with a greater customer base in new markets, companies can produce more of their goods and take greater advantage of economies of scale and bulk pricing.

In the U.S., 67% of SMEs said that exporting increases their production run and therefore decreases per-unit costs.

This trend is especially helpful for companies looking to establish niche products in the market, and will benefit domestic consumers as well as a result of lower prices.

2. Better and larger workforce

Worried that you don’t have enough manpower to go global, or that your staff aren’t equipped to handle importing and exporting?

Statistics show that if you want to have more employees, increase your revenues per employee, and pay and train your employees better, entering into international trade is a smart decision.

UK exporters reported that they were 80% more likely to report employment growth in past year than non-exporters.

Forty percent of SMEs who have begun exporting within the past two years reported employment growth, as did 20% of those who have already been exporting for ten years or more.

American manufacturers who export their products reported 70% higher revenue per employee than those who did not, and for service exporters the difference was over 100%!

Finally, Statistics Canada concluded that, after eliminating all other determining factors, exporters paid their employees 6% more on average than companies who only operated domestically.

In another study, exporters reported that they spent more on training per employee per year as well.

With employees who are more productive, better paid and better trained, exporters are able to pick the best and brightest in the business world to help them succeed in international markets.

3. More innovation

Some professionals may worry that they don’t have the right ideas or products to succeed around the world. In the competitive international markets, however, companies find themselves being more innovative than ever before, continually improving their products and processes.

On average, Canadian exporters had triple the R&D budgets of non-exporters, and were 37% more likely to adopt new and innovative technologies or techniques from around the world.

In the UK, 78% of exporters said that operating internationally exposed them to new ideas, while 70% said that it led them to adopt new ideas and innovations that helped them improve their products and services.

Fifty-nine percent also said they had either created a new product or refined an existing product for international markets as a result of their new ideas.

These innovations are then also implemented in domestic markets, improving products or services for domestic consumers as well.

Once the R&D and product improvement processes were complete, companies also saw vast increases in their product lifespans.

Seventy-three percent of UK companies reported that expanding internationally increased the lifespan of their products more generally, while 48% said they were able to extend the lifespan of an existing product, without changing it, after selling it in international markets.

4. Less risk

While going international is often perceived as a risky decision, statistics prove that exporting or importing is, in fact, a great way to decrease your company’s risk levels.

With suppliers and customers situated across several countries, companies are far less susceptible to economic decline, decrease in product interest, and other major issues in any one market.

Sixty-five percent of UK companies diversified and grew their customer base by expanding internationally, and 74% said that exporting offered increase stability during domestic turbulence.

In 2010, 67% of Canadian domestic-only manufacturers said were at risk because of international competition.

The Deloitte study also said that Canadian manufacturers could reduce risk by up to 20% by exporting, because of the different business cycles and conditions in different countries.

In the UK, from 1997-2003, companies were 11% less likely to shut down if they were exporting, while in France, from 1998-2005, a company’s probability of failure dropped 57% after they started exporting.

If you’re considering taking your company public, going global is also a wise long-term decision.

Companies that exported pre-IPO were 20-40% less likely to delist or exit the market, and the longer they’d been exporting before their IPO, the greater their odds of long-term success.

What’s holding you back from starting your own import-export business or expanding into international markets for the first time? Do these benefits outweigh any potential risks?

The post Statistics prove these 4 benefits to importing and exporting in global markets appeared first on Trade Ready.

The idea of supporting local businesses is inherently appealing.  It resonates with our sense of nationalism and supports a notion of “doing good” for our economy and our country – preserving jobs, supporting national development and keeping money in our country. But is it that simple?

No, it’s not.

In fact, I’m going to argue that “buy local” campaigns may even hurt the very same businesses these campaigns are designed to support.

Full Disclosure: While this piece has been written from the perspective of a Canadian-Barbadian about Barbados and considers the unique peculiarities of a small island economy, many of the supporting arguments used are relevant to other markets as well.

Here are three reasons not to buy local.

1. It impedes competitiveness

Whereas once there were many products protected by high import duty rates, the force of globalization has caused this to change.

High duty rates now exist only on a handful of protected products, such as jewelry, furniture, t-shirts, printed products and clothing – vibrant industries that the government hoped to preserve and develop.

The premise was that high duty rates would push Barbadians to buy locally manufactured products and give companies in these areas a chance to grow unperturbed by competition.

This didn’t happen.

Instead, these sectors, in the absence of the helpful push of competition, became less and less internationally competitive, while the tastes and needs of consumers kept up with global trends.

Eventually, the disparity between what was being offered locally and what was wanted by consumers, in tandem with increased online access to products from around the world, pushed Barbadians to buy these products from overseas, despite the high rates of duties.

For example, the number of wood furniture manufacturing enterprises has fallen in the past 10 years from 46 to approximately 20. Exports of wood furniture and wood products in 2013 and 2014 totalled USD $135,198 and USD $302,141 respectively, down from over USD $2 million in 2009.

Furthermore, protection offered to businesses in one area invariably impedes the development of businesses in other areas. For example, in the U.S., original t-shirt design is a US $262 million industry and the annual growth rate of this industry is over 20%.

There are also several small, young businesses seeking to enter this area in Barbados. However, these businesses are faced with the challenge of low quality, locally made t-shirts and duties of 115%, in addition to the requirement of an import license on imported t-shirts.

A top Barbadian designer voiced his frustrations in a newspaper article in August 2014.

“These guys [local garment manufacturers], I swear they are committed to mediocrity. I am not seeing the evidence of them trying to upgrade their product.”

Are they just trying to stop other people from getting their thing in, so that they could maintain a monopoly? So that they can maintain a hold in the local market? I don’t think that is acceptable.

In a December 2013 newspaper article, the Executive Director of the Barbados Manufacturing Association expressed concern with the influx and preferential treatment of imports by supermarkets.

In the same article, however, the ED also observed that there had been a “noticeable increase in the production of unique products ranging from footwear, food and toys.” There is certainly a correlation between globalization and the development of new ideas.

2. It’s hypocritical

We speak out of both corners of our mouth when we discourage imports and encourage exports.

Given the small size of our national market, we depend on exporting for business growth.

We would not be OK with strong buy local campaigns in key export markets, or with these markets imposing high import duties on the products which we manufacture. In fact, there are international trade rules discouraging these practices.

Let us also consider just who is doing the buying. In 2014, Barbados had nearly 520,000 stayover visitors (note: the population of Barbados is 285,000). Is it not disingenuous to push buying local, when many of those actually doing the buying are not in fact local?

Lastly, on the point of hypocrisy, we in the region are members of the CARICOM Single Market and Economy, a union that seeks to establish a single economic space along with 11 other Caribbean countries. Buy local campaigns fly in the face of our region’s efforts to encourage economic integration.

In 2008, the WTO raised an eyebrow at Barbados’ buy local campaign (100% Bajan), claiming that it was anti-competitive and in contravention of the General Agreement on Tariffs and Trade (GATT), which speaks to national treatment.

In response, the buy local campaign was revamped – funded by manufacturers, rather than the government.

3. What Does ‘Local’ Even Mean?

The fact is, not much produced in Barbados is really “100% Bajan”. Even a product as inherently Bajan as Bajan pepper sauce (a mustard-based hot sauce) is made up of imported products.

Would you have guessed that the pepper mash used in this product is imported (as is the mustard, vinegar and, of course, the packaging)?

This holds true for almost every locally made good produced or service offered; they would not exist without imported inputs.

Let’s expand on this point – what qualifies as ‘local’?

If a foreigner moves to Barbados and opens a restaurant, is it local? What about buying a meal from a big franchise (i.e. Chefette with 15 locations on this 430 square kilometer rock) versus your neighbourhood rum shop; do both qualify as ‘local’?

How about buying a meal at a Burger King, a locally owned franchise (owned by the well-known Barbadian, Ralph “Bizzy” Williams)? Or supporting a restaurant owned by a Barbadian who lives abroad?

The definitions for ‘local’ are inconsistent and unclear.

Lastly, let us be cognizant that importing products actually supports local services such as shipping, transportation and distribution.

But, what about jobs?

In closing, let’s consider the most used argument in support of the buy local campaign – that buying locally made products preserves jobs.

In 1996 (the first year in which this data is readily available), the GDP composition by sector in Barbados looked like this:

• Agriculture – 7%;
• Industry – 17%;
• Services – 76%.

The unemployment rate stood at 16.2% that year.

In 2015, almost 20 years later, the GDP composition by sector looks like this:

• Agriculture – 3.1%;
• Industry – 11.8%;
• Services – 85.1%.

Despite the decline in the manufacturing sector, the unemployment rate is in fact lower (11.5%) than it was when manufacturing played a larger role.

In addition, the GDP per capita is higher now, even when inflation over this period is accounted for. Any jobs lost in the manufacturing and agricultural sector transformed into new, typically higher paying jobs in the services sector.

Conversely, over the last 30 years, with the rise of manufacturing in China, the number of Chinese families living in extreme poverty has dropped from 84% to under 10% – that’s 680 million Chinese people no longer facing possible imminent death (i.e. the entire population of Barbados almost 2400 times over).

There is nothing I enjoy more than to see a local business thrive in the face of competition. For many commodities, buying local is almost always a good choice, particularly when it comes to agricultural products like bananas, coconuts, mangoes, etc.

But businesses in this global marketplace don’t need protection in order to grow – not in the long term; they need to innovate, diversify and improve their international competitiveness.

Instead of focusing on whether a product is produced locally or not, consider the factors that are important to you, such as: Is it best priced? Is it well-made and well-designed? Is it conveniently available? Is it made/produced in an environmentally sustainable manner?

And then make the most sensible purchasing decision – whether that be local or imported.

This is a perspective from a 440 sq. km² island country of 280,000. I am interested in the perspectives from larger economies. Share your comments below!

The post 3 reasons why you shouldn’t buy local appeared first on Trade Ready.