Jeremy Lin and America’s ‘New Exports’

The article below is one of the more interesting, entertaining and eye-opening pieces on exports of services that I have seen in a long time.  It pinpoints ways for our economy to power its way out of the recession by focusing on export-generating activities we do not usually associate with traditional exports of goods and services.

U.S. based activities such as tourism, education and sales of licensed sports apparel to foreign visitors, not only account for a substantial portion of our nation’s export totals, but also help build the Americana brand globally. This type of brand development is circular and very beneficial to the long-term competitiveness of the U.S. in the global markets.

As services such as U.S. sports, education, pop culture, are delivered to tourists, students and TV viewers/Internet users across the world, more demand is created within foreign markets for all things American. This in turn benefits the U.S. exporters of physical goods and professional services. It also benefits the U.S. franchisors in sectors such as education, food and beverage and childcare, who, as part of their franchising efforts, not only export the know-how, training and physical merchandise, but also the slices of the American way of life.  Such exposure, in turn, fuels additional interest and demand for the American life-style in the foreign countries and generates more tourists, buyers of licensed merchandise and students who vie for placement in American colleges and universities.  And on and on it goes.

Thus it is important that our nation understands the importance of the seemingly unconnected activities such as tourists waiting in lines to visit Disney World, or buy NBA licensing apparel, Apple computers and Juicy clothes, or students coming to the U.S. to study.  Both government officials and private business people need to realize how these “non-traditional exports” fit into the long-term economic health of our country and do everything they can to contribute to their growth and promotion.

As always, I hope you enjoy the article and welcome your comments.

The U.S. runs a huge trade surplus in tourism, tuition paid by foreign students, even NBA jerseys sold abroad.

By AUSTAN GOOLSBEE , as published in the Opinion Section of the Wall Street Journal, February 22, 2012

Linsanity swept the nation last week. The undrafted Harvard graduate Jeremy Lin seemed to transform himself from benchwarmer to MVP candidate in a matter of days. New York Knicks #17 jerseys became the biggest seller in the NBA and interest in Mr. Lin surged world-wide.

That same week we learned that China’s president-to-be, Xi Jinping, is an NBA fan. After meeting President Obama at the White House, Mr. Xi traveled to Iowa and then attended a Lakers game in Los Angeles. Mr. Obama, for his part, visited a Boeing 787 plant to tout exports as an engine of growth.

Though seemingly unrelated, these three events together highlighted one of the more promising ways out of our economic doldrums: growing exports—with exports broadly defined to include things like entertainment royalties, tourism, travel and services.

While U.S. economic conditions have improved in recent months, anxiety lingers and the slumps in housing and consumer spending remain. Exports, however, have grown impressively and have plenty of room to keep expanding.

During our last economic expansion, we focused on the home market while the other advanced economies’ exports grew three times faster than ours did. Big emerging markets grew even more.

Today, growing exports are a natural opportunity for us and one of the last areas of bipartisan agreement in Washington. And exports are not confined to traditional manufactured goods.

When a foreign visitor comes to America on vacation and, like Mr. Xi, buys an NBA ticket in Los Angeles or a lunch in Muscatine, Iowa, those count in official statistics as exports. If a fan in Indonesia watches an NBA game or buys a Jeremy Lin jersey, the royalties count as an export. Many services increase our exports: tuition paid by foreign students, fares paid on U.S. airlines by foreign fliers, ad sales on Google from foreign companies.

These things add up. Last year, according to the Bureau of Economic Analysis (BEA), the U.S. exported $2.1 trillion of goods and services (the most ever) and more than $600 billion of that came from services.

Getty Images

Jeremy Lin, right, of the New York Knicks playing against Sundiata Gaines of the New Jersey Nets at Madison Square Garden on Monday.

Think of them as the New Exports. We already export far more of them than any other country. We export more educations than computers and more tourism than aerospace products or machinery. Unlike our massive trade deficit in goods, we run major trade surpluses in the New Exports—$179 billion of surplus in 2011 and probably more in 2012, according to the BEA. This supports millions of jobs across America.

Promoting the New Exports requires more than just the conventional prying open of foreign markets and reducing tariff and regulatory barriers to our goods. It involves fighting restrictions on Internet commerce and enforcing intellectual-property rules. It also involves some less confrontational (and often easier) strategies such as improving foreigners’ opinions of America so they want to come visit or send their children to school here, and then expanding student and tourist visas to enable them to do so.

Modest investments can facilitate major private-sector economic gains. Take tourists coming from countries like Brazil. In a recent survey, 94% of Brazilians said it was either difficult or nearly impossible to get here. To obtain a visa, they must undergo a multi-stage ordeal that includes traveling to a personal interview in a city with a U.S. consulate—of which there are only four in all of Brazil. Start to finish, the process can take up to five months.

Last month President Obama called for speeding up the visa process to promote tourism here. The U.S. Travel Association estimates that adding a consular official costs, with overhead, around $280,000 per year. Since the average Brazilian traveler to the U.S. spends around $5,000, the association estimates that a single official can generate as much as $50 million of travel exports for U.S. business (not to mention more than $1 million in visa fees to the U.S. government).

Supporting New Exports doesn’t require diplomatic battles with China or shepherding new trade agreements through Congress. These are exports that other countries want us to have and that we have missed by our own short-sightedness. Last week we extended the payroll tax cut to help the economy. We have given tax incentives to encourage companies to invest. Why not also use short-run government incentives to encourage New Exports, such as limited-time discounts on airline taxes, visa-application costs and airport-landing fees?

As a Chicago Bulls fan, I find the resurgent Knicks irritating. Still, I will root for more Linsanity because with every game watched in Asia, jersey sold in Europe or visit to an NBA game by a foreign tourist, this young man is doing more than just helping his team. He’s demonstrating a way for our economy to grow. Playing for a .500 team, Mr. Lin probably won’t be up there cutting down the nets in celebration at the end of the year. He was an economics major, though, so if it’s any consolation to him, he’s already helped cut down the trade deficit.

Mr. Goolsbee, a professor of economics at the University of Chicago’s Booth School of Business, was chairman of President Obama’s Council of Economic Advisers from 2010 to 2011.


About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton,, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

The Ship Modeler

Ship Modeling News from Clare Hess

Site Title

“Love recognizes no barriers. It jumps hurdles, leaps fences, penetrates walls to arrive at its destination full of hope.” — Maya Angelou

Museum of International Trade & Merchant Banking (MoMBIT)

chronicling the importance of international trade and merchant banking in the global development

Fluent In Foreign Business

Helping To Grow Your Business Abroad

Emerging Market Insights

How to make a killing in Emerging Markets without losing your shirt?

Ideas That Work @ GIDASPOV.COM

Strategy | Creativity | Innovation | Fundraising | Marketing

Nu Leadership Revolution Blog

“Helping Emerging Leaders Gain the Competitive Advantage in the Future"

Mike Z's Blog

Exploring the causes of cancer throughout the world

Bucket List Publications

Indulge- Travel, Adventure, & New Experiences

FranchisEssentials by Franchise Foundry

Sharing Information, Insight and Perspective about Franchising, Small Business and Entrepreneurship

We Help Insurance Agencies Stand Out

The Blog

The latest news on and the WordPress community.

%d bloggers like this: