Going beyond local, national borders to expand businesses
Speaker emphasizes America’s shrinking middle class,
consumer population

By Katherine Michalets - Freeman Staff

March 12, 2015

 Roxanne Baumann, director of global engagement for the Wisconsin Manufacturing Extension Partnership (in sweater and skirt), and Pewaukee Chamber of Commerce Executive Director Nancy Waters (in two-piece suit) meet before Wednesday's chamber luncheon, which focused on China and exporting.
Photo courtesy of Roy Schneider

PEWAUKEE - As a small business owner, it’s easy to think in local terms, but during Wednesday’s Pewaukee Chamber of Commerce luncheon, Executive Director Nancy Waters encouraged business owners to look beyond the borders of the city and village of Pewaukee.

Roxanne Baumann, director of global engagement for the Wisconsin Manufacturing Extension Partnership, also drove that message home with a PowerPoint presentation illustrating America’s shrinking middle class and that 95 percent of consumers and the middle class live outside the United States.

“If we don’t tap outside customers, we are betting our businesses on the 5 percent of consumers who are here,” she said.

According to the Brookings Institute, by 2030 only 7 percent of the world’s middle class population will live in North America. Fourteen percent will be in Europe, while the majority at 66 percent will be in the Asia Pacific region.

The projected consumption by that group is also changing. In 2030, Americans are expected to consume about $4 trillion in goods, or 7 percent, while India’s population will consume $12.8 trillion or 23 percent and China will consume $10 trillion or 18 percent, according to Baumann’s presentation.

As baby boomers age, they are also no longer in the acquisition cycle, Baumann said. With many countries appreciating goods made in the Midwest, it’s time to think of exporting, she said.

 Roxanne Baumann, director of global engagement for the Wisconsin Manufacturing Extension Partnership, speaks about exporting during Wednesday's Pewaukee Chamber of Commerce Luncheon.
Photo courtesy of Roy Schneider

Baumann and the WMEP are working with the Milwaukee 7, a cooperative organization of the seven metro Milwaukee counties, to increase exportation for the region.
 

A roadmap to exporting

Statistics indicate the only growth in the past decade in southeastern Wisconsin has come from exports and there has been a 6 percent decline in domestic sales from 2003 to 2012, she said.

The WMEP is able to help companies create a roadmap to exporting. Important aspects to identify include: is there an export market for a company’s production; is selling outside the U.S. a realistic action; and how can a company offset the cost of exporting to get to the profit point.

Some companies after completing the WMEP ExporTech were able to increase their revenue by $900,000 in nine months, Baumann said. She said companies that export also grow 2.6 percent faster.

Other import support WMEP and other Wisconsin organizations can offer is educational.

“You want the culture in the company to be open to new markets,” Baumann said.

When it comes to exploring the idea of exporting, Baumann said it can be daunting, but 80 percent of the knowledge needed is similar to what the executive knows for domestic operations and 20 percent is new knowledge.

Having an international experience can help an executive in ways they may not expect, she said. For instance, an executive may return from a trip to China and look at things with a different perspective that will help them to improve the product.

During Wednesday’s luncheon, Waters also promoted the chamber’s 2015 trip to China, which serves as a partial fundraiser for the organization. For $2,500, participants can travel to China from Oct. 26 to Nov. 4 and go on tours of the Great Wall, Temple of Heaven and Shanghai.

For more information, call 262-691-8851 or go to www.pewaukeechamber.org.