When it comes to major cities with an international business presence, New York, London and Paris always come to mind. But a new report shows that there are many smaller cities around the world and in the United States that can carry that label.
Baltimore is among those candidates.
“Any city can become a global city,” said Marek Gootman of the Brookings Institution, which conducted the report with JPMorgan Chase. Gootman presented the report’s findings at the Greater Baltimore Committee’s economic outlook conference at the Hyatt Regency in Baltimore on Monday.
The Brookings Institution and JPMorgan Chase created the Global Cities Initiative to study ways to improve the economies of metro regions in the United States and abroad. The initiative has also studied other cities, including Portland, San Diego and Minneapolis-St. Paul. The Greater Baltimore Committee in December applied to be included in the study.
While the Baltimore metro area ranks 28th out of the 100 largest metro regions in terms of export value, the report says that the area’s small and mid-sized businesses could play a bigger role in the local economy if they can export more goods.
“Going global pays off for small and medium-sized enterprises,” said Gootman.
Around 6.9 percent of Baltimore’s economy comes from exports. The region ranks 90th out of 100 metro areas in the United States in terms of exports as a share of GDP, the report found.
“This region has not really grown from an export perspective since the recession,” said Donald Fry, president and CEO of the Greater Baltimore Committee, adding that “any business that provides that provides a good or service and receives compensation for that good or service outside the U.S.” can export.
“[Export] trade activity represents a lot of untapped potential in small and midsize companies that could be leveraged for future economic growth in the Baltimore region. Expanding our export activity could also help adjust our region’s dependence on federal and other government spending,” said Fry.
But the report found that business owners don’t share that sentiment.
One of the report’s key findings was that there’s a lack of awareness among small and midsize business owners about their export potential and many are reluctant to enter that market altogether. More than 75 percent of the 18,000 businesses surveyed by the Global Cities Institute said they did not know about export assistance programs run by the government or private sector.
Many business owners pointed to regulations, finances and logistics as barriers to becoming exporters. Transportation was the voted as the largest obstacle, the report said.
In some industries, such as cybersecurity, regulatory restrictions hinder export potential. Overall, the report says the region’s dependence on federal spending has made the region lethargic toward entering international markets.
The Baltimore region’s top international markets for exports are in Europe, Asia and Canada. The top export business sectors include health care, education and information technology. International business tourism and medical tourism is the third-largest exporter for the region in 2014, bringing in $1.25 billion, according to the Brookings Export Monitor 2015.
Over the next several months the GBC and its partners will be working with a steering committee to develop strategies and recommendations that address the report’s findings.
The GBC will be working with the Maryland Department of Commerce, Towson University’s Regional Economic Studies Institute, Baltimore Metropolitan Council and the Baltimore Development Corporation.
The team plans to release a plan for Baltimore’s trade strategy early next year.