- Associated Press - Sunday, March 23, 2014

PORTLAND, Ore. (AP) - Oregon exports, which soared to a record $19.4 billion in 2008, plunged the next year and have been flat ever since.

Across the border in Washington, exports dipped only slightly during the recession and then took off, growing more than 50 percent since 2010 to a record $81.9 billion last year.

Ivo Trummer, global strategies manager for Business Oregon, the state economic development agency, sums up the reason in one word. “I think it’s almost entirely Boeing,” said Trummer, noting the billions of dollars in airplanes and parts sold abroad as the 787 Dreamliner entered production.

The focus on Boeing, the nation’s biggest exporter, brings up a more fundamental difference between the two states that has national implications. With only two Fortune 500 companies, Oregon’s economy is based on small and medium-sized enterprises. Washington boasts corporate giants with international range.

Small and medium-sized companies lack the critical mass to ignite an export boom, says Caroline Freund, an economist at the Peterson Institute for International Economics, a Washington, D.C., think tank. That’s the main reason President Barack Obama’s high-profile goal to double U.S. exports in five years is coming up short, she says.

“The emphasis on small and medium enterprises was misguided,” Freund wrote in a recent paper critiquing Obama’s National Export Initiative. “What was needed was a broad package to expand incentives for exporting by the most efficient and innovative firms that drive export growth and net job creation.”

Exports matter in part because they support jobs here at home that pay more than average. Every $1 billion in additional sales abroad supports approximately 5,000 American jobs, according to the U.S. Commerce Department. When Commerce Secretary Gary Locke announced the national export initiative in February 2010, the former Washington governor said doubling exports would support 2 million jobs.

But the initiative appears far short of its goal, even when backers stack the deck by beginning the count in 2009 to capture the bounce-back from the recession. U.S. exports of $1.58 trillion had grown by $720 billion as of 2013; they’d have to grow another $860 billion this year to reach Obama’s goal.

Freund says big companies dominate exports. The top 1 percent of U.S. exporters, fewer than 3,000 companies, is responsible for about 80 percent of merchandise exports. The other 99 percent of exporters, or 275,000 businesses, account for the remaining 20 percent.

“Thus, if small and medium enterprises are to drive export growth, it would take annual growth rates of roughly 50 percent to double exports in five years,” Freund wrote.

Big companies with more than 500 employees generated almost three quarters of Washington’s merchandise exports in 2011. Large businesses produced less than two-thirds of Oregon’s exports that year.

So what’s a state such as Oregon to do, short of cloning Intel, the company that drives the state’s exports?

One approach is to question the statistics. Oregon’s $18.6 billion in 2013 exports doesn’t include the value of parts made in the state for products exported by other states.

For example, Boeing’s factory in Gresham makes hundreds of millions of dollars of components for the Dreamliner and other planes that are sold abroad from Washington. Precision Castparts Corp., Oregon’s only Fortune 500 company other than Nike, manufactures millions of dollars in parts for each Boeing 787 and many other components for jet engines and other products sold abroad.

Conventional trade statistics also don’t include exports of services, which are growing well as Oregon lawyers, consultants and architects take on foreign projects.

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