S M L Reset to Default

Leaders in export growth

Taking calculated risks could lead to big business payoffs

by Pernille Fischer Boulter

At the end of May I was in Kingston, Jamaica, when the country declared a state of emergency after gang members attacked police stations and blockaded a large swath of the city. I was there working on a project with EduNova, hosting a series of workshops on corporate governance for family-owned businesses.

From my hotel room I heard gunfire, and I had to drive through roadblocks to get to my destination. To put it mildly, it was an unnerving experience. But when I think back on the experience, it’s a good analogy for exporting.

The more risk you’re willing to take, the greater the potential reward. By risk I mean calculated, not just risk for the sake of it. Think about it: Why would a company from Atlantic Canada go on a 32-hour journey to meet with decision-makers in the Greenlandic offshore industry, where they would face cultural differences, language barriers, double taxation, and legislative changes, when they could simply sell their services to Atlantic Canadian offshore projects?
 
Or how about the risk a small company takes when it’s filling the belly of a 747 full of lobsters headed to Switzerland—think volcanic ash from Iceland, currency fluctuations, trade barriers, potential political uncertainty—when the fishermen could sit in their pick-up truck by the side of the highway and sell them there. The answer: The risk is offset by the reward.
 
Greenland has one of the largest offshore oil and gas potentials in the world with estimated oil reserves of 50 billion barrels. And do you have any idea what fresh lobster sells for in Switzerland? A lot. A lobster meal at a restaurant can set you back more than the price of your nightly hotel room rate, offering huge growth potential for companies exporting lobsters there.
 
Right now the rewards for most Atlantic Canadian companies are bountiful if they know where and how to export. In fact, according to Export Development Canada (EDC), Nova Scotia exports are expected to outperform the rest of the country by next year, with 12% growth this year and 17% growth in 2011. So where should companies look?
Many look south of our border and see a shared language, culture, geographic proximity, and political stability, all of which are good reasons to focus efforts there. But if you review recent trends in the Canadian–U.S. exchange rate and the overall state of the American economy, the smart bet is to look farther afield.
 
Europe, for example. Did you know there are almost 500 million consumers within the European Union? Poland alone has 32 million. In the Netherlands, more than 90% of businesses conduct their dealings in English, Plus, Canada is currently negotiating a comprehensive Economic Trade Agreement with the E to reduce tariffs on a range of Canadian-made goods.
 
Then there’s the Caribbean. Canada is currently negotiating a free trade agreement with the Caribbean Community and Common Market (CARICOM), which promotes economic integration among its members and is composed of 15 Caribbean countries and five associated states, plus seven observing countries. In the last decade, a single two-way merchandise trade between CARICOM and Canada averaged more than $700 million (U.S.).
 
Here at home, governments are refocusing export initiatives on the region and conducting various trade missions. The ultimate lesson learned: To succeed in export growth, you must be willing to take a few calculated risks. As daunting as that can be, if done correctly, the rewards can be huge. 

Pernille Fischer Boulter is the founder and CEO of Kisserup International Trade Roots Inc. She can be reached at pfb@kisserup.com.

 

 

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