Only 1 percent of American small businesses are currently exporting overseas, according to U.S. Small Business Administration (SBA) head Linda McMahon. She encouraged small business owners and entrepreneurs to enter the global market during a speech at a United Nations event Thursday.
The inaugural Micro, Small and Medium Enterprises Knowledge Summit gathered together world government and business leaders to discuss ways to promote small business growth through the UN Sustainable Development Goals.
During the event, the UN designated June 27 as Micro, Small and Medium Enterprise Day, a way to honor job creation by small businesses globally, and UN officials called on small businesses worldwide to create 600 million jobs over the next 15 years.
Exporting will be a key component if U.S. small businesses want to grow, according to McMahon.
“Businesses that export are less likely to go out of business and more likely to grow faster,” McMahon said. “That’s because 96 percent of all of the world’s consumers and over three-quarters of the world’s purchasing power are outside of the United States.”
She noted the Trump administration’s commitment to ensuring equal access for small businesses to international markets, as well as reducing or eliminating trade and investment barriers and compliance challenges that hit small businesses the hardest. Globally, over half of all declined trade finance requests to banks were submitted by small business owners, McMahon said, and in the U.S. over one-third of small businesses find trade finance hard to obtain for foreign sales. The SBA plans to work with banks to address the challenge and find tailored trade finance products for small business owners.
In a report released last week by Global Innovation Forum, small business owners cited the exchange rate and the strong U.S. dollar as factors that weaken their potential to export. The strong dollar makes U.S. products more expensive and less competitive in overseas markets. Larger manufacturers have expressed similar complaints; both larger and smaller businesses say they favor open trade and consistent rules, and that trade negotiations are key to keeping overseas markets open to American exports, according to the report.