Why exporting is important

A fall in exports is treated as an early indicator of impending economic recession. Exports are a very important tool to spur economic growth in a country. This means that exports can also be used to recover from recessions. The logic behind this is simple. During the recession, there is a negative sentiment in the entire economy. Factories and offices stop giving wage increments. As a result, consumers start deferring their purchases. The result is that a vicious cycle ensues and production comes to a halt.

During the same time, other countries around the world are not suffering from a recession. Hence the consumers in these countries are willing to spend. It is here that exports come into play.

Exporters from recession prone countries can send their goods to nations with favorable economic climate. This will increase the local GDP and reduce unemployment. This puts the economy. The dollar is the most important currency in the world today. It is a reserve currency.

This means that international trades happen either in dollar or gold. Essential commodities like oil and gold are priced only in terms of dollar or gold. Hence all countries need dollars for their survival. Competitive Advantage.

The United States is known worldwide for high quality, innovative goods and services, customer service, and sound business practices. Risk Mitigation. Most companies that export have an easier time riding out fluctuations in the U. Export Resources.

For example, the U. Department of Commerce has a global network of U. The export base in these city centres includes a relatively high concentration of manufacturing exporters which suggests that agglomeration economies do not play out in the same way in these city centres as they do elsewhere.

Overall, the relationship between the size of export base and the skill profile of exporting jobs is negative in the suburbs see Figure 4 — this is in contrast to the relationship found across the city centres. The suburbs of Burnley had one of the highest concentrations of export jobs — 39 per cent of jobs were in the exporting firms, 12 percentage points higher than the city average.

But less than a third of these jobs were high skilled, compared to 40 per cent across city suburbs as a whole. The export base in the suburbs of Aldershot, Cambridge and Reading were large and highly skilled. This type of activity tends to be high skilled and concentrated in suburbs see the Cambridge case study. You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our privacy policy.

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While exporters account for a smaller share of businesses and jobs compared to the local services sector 25 per cent of employment compared to 75 per cent in local services , exporters play an important role in the UK economy for several reasons: Firstly, they tend to be more productive than local services businesses — and also drive productivity growth, which drives long-run economic growth.

Secondly, because exporters generate their revenues from selling into wider domestic and international markets, they generate income independent of the performance of the local economy. Cities that have more exporting jobs also have more jobs in local services, relative to the size of the working-age population but the relationship between high skill exporting jobs and local services jobs is stronger and suggests that high-skill exporters create even higher demand for local services.

The skills profile of exporters is more important than the sectoral profile for boosting productivity in cities Having a large number of exporters does not necessarily mean a city is more productive, however — it is the nature of the export base that matters. In particular, cities that tend to have a larger proportion of their export-base jobs in the service-exporting sector are on average more productive than cities that tend to have a larger proportion of goods-exporting jobs see Figure 1 Figure 1: Relationship between productivity and the sectoral profile of exporting sector in cities.

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I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Economy Economics. What Is an Export? Key Takeaways Export refers to a product or service produced in one country but sold to a buyer abroad. Exports are one of the oldest forms of economic transfer and occur on a large scale between nations.