A Formula for Success: Tapping the Export Potential of Minority Businesses
Created on March 3, 2016
For more than 45 years, the Minority Business Development Agency (MBDA) supported the economic growth of Minority Business Enterprises (MBE) initially only through domestic operations. It was in 2003 that MBDA published its first export report titled Globalization and Minority-Owned Businesses in the United States: Assessment and Prospects.
The report led to the creation of our Global Business Strategies, subsequent research on MBE exporters, and the 2012 release of an export fact sheet that took a closer look at the exceptional export capabilities of MBEs, which revealed that minority-owned firms are:
Twice as likely to export as their nonminority counterparts (14.4 percent minority-owned exporters compared to 5.4 percent nonminority exporters).
Three times as likely to have international operations.
Six times as likely to transact business in a language other than English.
Fast forward to today’s global economy, where 96 percent of all customers live outside of the United States. As the nation continues its journey from economic recovery to economic resurgence with an increased focus on promoting American goods abroad—MBDA is expanding its Global Business Strategy to support the growing number of MBEs that support and sustain American jobs by exporting goods and services around the world.
In focusing on the growth and expansion of MBEs into global markets, MBDA is proud of its success in promoting the global competitiveness of minority-owned firms. In fiscal year 2014, MBDA client exports neared $710 million in contracts and $74 million in export financing accounting for 37 percent of the agency’s overall increase in contracts and capital.
So what is the formula for success? In 2013, MBDA established expanded expertise at several MBDA Business Center locations. In doing so, a strong emphasis was placed on global market engagement activities with a strategic focus on international trade and export financing. In addition to providing wide-ranging export assistance, these centers collaborated with the entire network of 44 MBDA Business Centers to leverage three White House Initiatives—Doing Business in Africa, Doing Business in Asia, and Look South.
These initiatives, which involved coordinating business-to-business matchmaking events, cross-promotion of contract opportunities, and sharing of many resources, are helping numerous businesses navigate the avenues of exporting while easing their entry into emerging markets.
A second core component of providing MBEs greater access to new markets was addressing their capital needs by utilizing the MBDA Business Center network to identify export financing. In fiscal year 2014, nine centers became loan originators under Export-Import Bank’s Global Credit Express program; an additional two centers focused on alternative financing for both global and domestic business opportunities.
Lastly, MBDA strategically partners with key stakeholders with essential expertise and global relationships. A great example is the ongoing collaboration with our sister agency, the International Trade Administration (ITA) and its worldwide network of export and industry experts in the U.S. Commercial Service; as well as our participation on the Trade Promotion Coordinating Committee. The partnership with ITA has allowed MBDA to create resource hubs that provide current market data, business development support, and business-to-business exposure for clients interested in exploring export opportunities.