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United States International Trade CommissionSmall and MediumSized Enterprises:Overview ofParticipation in U.S.ExportsInvestigation No. 332-508USITC Publication 4125January 2010
U.S. International Trade CommissionCOMMISSIONERSShara L. Aranoff, ChairmanDaniel R. Pearson, Vice ChairmanDeanna Tanner OkunCharlotte R. LaneIrving A. WilliamsonDean A. PinkertRobert A. RogowskyDirector of OperationsRobert B. KoopmanDirector of EconomicsKaren Laney-CummingsDirector, Office of IndustriesAddress all communications toSecretary to the CommissionUnited States International Trade CommissionWashington, DC 20436
U.S. International Trade CommissionWashington, DC 20436www.usitc.govSmall and Medium-Sized Enterprises:Overview of Participation in U.S. ExportsInvestigation No. 332-508Publication 4125January 2010
Project LeadershipAlexander Hammer, Project Leaderalexander.hammer@usitc.govCathy Jabara, Deputy Project Leadercathy.jabara@usitc.govLaura Bloodgood, Coordinating Project Leaderlaura.bloodgood@usitc.govNicholas Grossman, Statistical Coordinatornicholas.grossman@usitc.govPrincipal AuthorsChapter 1Chapter 2Chapter 3Chapter 4Alexander HammerCathy JabaraEric CardenasJeremy WiseNicholas GrossmanJoann PetersonAllison llison.gosney@usitc.govOther Analytic ContributorsLaura Bloodgood, Richard Brown, Nannette Christ, Daniel Cook,Judith Dean, Katherine Linton, David Lundy, and James StampsSpecial Assistance FromDiane Bennett, Peg Hausman, Andrew Martinez,Aaron Miller, Cynthia Payne, Vince Procacci, and Patricia M. ThomasUnder the Direction OfArona Butcher, ChiefCountry, Regional, and Analysis Divisionarona.butcher@usitc.gov
AbstractThis report describes characteristics of domestic small and medium-sized enterprises(SMEs) and the role they play in U.S. exports. Within the U.S. economy, SMEs accountfor the vast majority of firms and approximately half the gross domestic product (GDP)generated by nonagricultural sectors. However, SMEs accounted for only about 30percent of merchandise exports between 1997 and 2007. As was the case for larger firms,SME merchandise goods were primarily exported to Canada and Mexico in 2007, andSME principal exports were computer and electronic products, machinery, and chemicals.Unlike larger firms, SMEs tended to concentrate their merchandise exports in highincome destination markets such as Hong Kong, Israel, and Switzerland, and in laborintensive product categories such as wood products and apparel and accessories.Moreover, relative to larger firms, growth in the value of SME exports was moredependent upon net new market entrants, particularly among the smallest SMEs. Whileservices export data for SMEs are largely unavailable, data on the location of affiliatesfor two services industries––(1) finance and insurance and (2) professional, scientific,and technical services––suggest that the United Kingdom and Canada are likely to havebeen important export destinations for SME firms in these industries in recent years.i
ContentsPageAbstract .List of Frequently Used Terms and Acronyms.Executive Summary .Chapter 1: Introduction .Purpose.Scope .What is an enterprise?.What is an SME? .Time frame .Analytic framework .Organization of report .Information sources.Data limitations .Chapter 2: SME Characteristics .Characteristics of nonfarm SMEs .Number of businesses and employment .Employment growth .Economic activity .Other characteristics .Characteristics of small farm businesses.Characteristics of SMEs as exporters.Characteristics of firms that export.Constraints on SME exporters .Entrepreneurial orientation and SME exports .Chapter 3: The Role of SMEs in U.S. MerchandiseExports .Export markets .Manufacturer exports by market.Nonmanufacturer exports by market .Principal products .Manufacturer exports by product .Nonmanufacturer exports by product .Chapter 4: The Role of SMEs in U.S. ServicesExports .Overview of trade data on U.S. services SMEs .Profile of U.S. services SMEs.Connection between affiliate sales and cross-border exports -114-14-24-44-8
Contents—ContinuedPageBibliography .Biblio-1AppendicesA.B.C.D.Request letter.Federal Register notice .Additional information on SME merchandise exports .Additional information on SME services exports .A-1B-1C-1D-1BoxesBox 1.1 How Census derives its exporter profile database .Box 3.1 Data limitations on indirect exports constrain analysis .Box 4.1 BEA data on international service transactions, and the differences between .tradable and nontradable services.Box 4.2 Collection methods for BEA data on cross-border trade and affiliatetransactions C.2U.S. merchandise exports.Nonfarm private employer firms by firm size, 2006.Nonfarm private employment by firm size, 2006 .Sectoral employment by firm size, 2006.Services sector employment by firm size, 2006.Growth of nonfarm private employment by firm size, 1998–2006.Average quarterly share of nonfarm private net new jobs by firm size, 1992–2009 .Average quarterly share of job gains and losses by firm size, 1992–2009 .Growth of nonfarm private nonemployer and employer firms .SME nonagricultural GDP by sector, 2004.Large firms’ nonagricultural GDP by sector, 2004.Value of commercial farm production and number of farms by farm size, 2007 .Value of commercial farm production by crop and farm size, 2007.Avenues for firm exports .U.S. merchandise exports by firm size and share of exports by SMEs, 1997–2007.U.S. merchandise exports by firm type, 1997–2007 .U.S. merchandise exports by firm type and firm size, 1997–2007 .U.S. merchandise exports, by value of exports, number of exporting firms, andaverage export value per firm by firm size, 1997 and 2007.U.S. merchandise exports to 20 major markets.U.S. manufacturer merchandise exports by major destination market, 2007.U.S. merchandise exports by product category.U.S. cross-border exports of services, by industry, 2006.Sales by foreign affiliates of U.S. services firms, by industry, 2006 .Geographic location of foreign affiliates of U.S. services SMEs by region, latestavailable year .U.S. total merchandise exports by major destination market, 2007.U.S. nonmanufacturer merchandise exports by major destination market, 2007 -13-43-53-63-83-93-114-34-44-7C-3C-4
Contents—ContinuedPageTables1.11.22.14.1USITC Report 1 definitions of small and medium–sized enterprises .SME data limitations.U.S. businesses by employment size (thousands), 2006–07 .Number of firms, average employees, and revenues per firm for SMEs in selectedservices industries, latest available year.4.2 Number of firms by employment size for SMEs in selected services industries, latestavailable years.4.3 Revenues per firm by employment size for SMEs in selected services industries(thousand ), latest available year .4.4 Top 10 countries for foreign affiliates of U.S. services SMEs, by industry, latestavailable year .4.5 Top 10 countries for foreign affiliates of U.S. services SMEs and cross-border exportsin selected services industries .C.1 U.S. merchandise exports, 1997–2007 (billion ).C.2 Number of U.S. merchandise exporting firms, 1997–2007 .C.3 Average U.S. merchandise exports, per firm, 1997–2007 .C.4 Total U.S. merchandise exports, by country and firm size, 2002 and 2007.C.5 Manufacturer merchandise exports, by country and firm size, 2002 and 2007 .C.6 Nonmanufacturer merchandise exports, by country and firm size, 2002 and 2007 .C.7 Merchandise exports, by product and firm size, 2002 and 2007.C.8 Manufacturer merchandise exports, by product and firm size, 2002 and 2007 .C.9 Nonmanufacturer merchandise exports, by product and firm size, 2002 and 2007 .D.1 Percentage share of total number of services firms in Census data captured in ORBISdatabase, by sector a
ORBIS A commercial database that consolidates firm-level statistical information. Other companies A census category denoting manufacturers of prepackaged software and . books, freight forwarders and other transportation service firms, gas and oil . extraction companies, coal mining companies, communications service firms, etc.
