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Decoding German Exports

with Nick Marchio

In a New York Times article in June, David Leonhardt wrote about the German Example for the U.S., and what we can learn from reforms in its labor market, education, and tax systems. However, one of the biggest lessons Germans can teach Americans nowadays is how to help companies to sell abroad.  While it’s difficult to believe that American businesses need a lesson in selling, the export sector in the U.S. is not as well developed as in other countries like Germany.

In spite of being an economy with high labor costs and strong currency, Germany continues to prosper in the exports sector, which constitutes about 45 percent of its economy.  This is fueled by an export strategy that not only focuses on trade services to companies, but links with workforce and regional cluster policies supporting German businesses to sell abroad.  The Federal Ministry of Economics and Technology (BMWi) enables this synergy, given that it unifies German economic policy under one roof instead of silo-ing it across a dizzying array of departments and agencies. The BMWi integrates export promotion with vocational training programs and initiatives that encourage innovation and the growth of small and medium sized enterprises.  And BMWi is a part of a federalist system, connecting the federal strategy with the states’ and city-regions’ efforts on exports.

This is perhaps the defining trait of German export success; it has found a way to develop a national export strategy that is coherent and works with all of the interrelated aspects of the economy. The U.S. National Export Initiative, launched last year, still has a way to go to catch up to Germany’s success. While a good start, it needs to better connect with the reality on the ground in our metropolitan areas.