Japanese trade delegation meet and talk about the future in Japan.
Exclusive interview with Governor John E. Baldacci by Ramona du Houx
Economists, heads of state, financial institutions, large corporations, Wall Street, and others, all know that every day that passes is another day of transactions made by companies networking around the globe. It’s been that way for decades. What’s new is that their international domain has opened up to small businesses dramatically since the advent of the Internet. The world has now become the marketplace for any businesses that is willing to venture through the global-economy doors.
And it’s exciting.
Small- and medium-sized companies who were constricted by lack of exposure to markets can now find international customers. Of course venturing into the unknown can be risky, and that’s why, in Maine, if a company needs help they can go to the Maine International Trade Center. That assistance has proven invaluable. Throughout the year, they help companies understand what steps they need to take in order to connect into the global marketplace. Once a year they take a delegation on an international trade mission. Last November Governor Baldacci led the delegation of Maine businesses, education and community leaders to Japan and South Korea.
“I felt that this trade mission was one of the best I have been a part of. It felt good being there. Everyone was very warm and welcoming. There was a lot more talking turkey with each other, and really getting down to the contracts. Businesses were making plans then and there,” said Governor John Baldacci. “Usually, on a trade mission, you make a contact and nurture that over time. It takes time to develop customers and a customer base. These things usually don’t happen overnight. This was further along than other trade missions that I’ve been a part of. These countries clearly wanted to do business with us.”
South Korea is known for having the fastest economic development in the world since the 1960s and is now the third largest economy in Asia and the twelfth largest economy in the world. South Korea, with 49 million people, is one of the world’s most technologically and scientifically advanced countries. It is currently the most wired nation in the world, with 90 per cent of homes connected to broadband Internet. Clearly a strong believer in the global economy, South Korea is looking to expand trading partners.
“There is a trade agreement before the South Korean congress that would lift tariffs and help facilitate trade between our countries,” said the governor.
Japan has the world’s tenth largest population, with about 128 million people. The greater Tokyo area, which includes the capital city of Tokyo and several surrounding prefectures, is the largest metropolitan area in the world, with over 30 million residents.
Japan has the world’s second largest economy by nominal GDP. It is the world’s fourth largest exporter and sixth largest importer and a world leader in technology and machinery.
Maine’s wide-open spaces and dramatic views are commodities the Japanese value. “These counties have few natural resources. They import most of them. Our pulp, other forest products, and seafood are in demand,” said Governor Baldacci.
Governor John Baldacci in his office at the Maine Capitol. Photo by Ramona du Houx
Companies in Maine who have developed niche markets are also finding Asia welcoming. Last year, Japan alone imported over $128 million worth of Maine commodities.
Just a little over a month since the trip, a debriefing for trade mission participants was held at the Blaine House, revealing how that increase in business has happened. “I am pleased to report that as a direct result of the trade mission, participants have already secured $3 million in export sales for the next 12-month period,” announced the governor.
The previous three trade missions resulted in increased sales from Maine companies by at least $12.8 million. This figure only tracks new sales in the first year after the mission and weighs in on the conservative side.
The governor attributes the initial success of the mission to the groundwork of MITC and the U.S. Department of Commerce.
“A lot of that work was done by Maine’s International Trade Center with the matchmaking business meetings and the Commerce Department’s Jeff Porter,” said Baldacci. A total of 104 matchmaking business meetings that put together potential customers with the 13 businesses from Maine were set up by MITC.
It’s important for the governor to be a part of these trade missions, because his presence not only adds prestige and respect, it ensures that the embassies and other U.S. Government organizations are actively involved, which helps to open doors wider for business, tourism, and exchanges in education and culture.
“There is a great supportive mentoring group set up for business people,” said the governor.
Mark Eichenbaum, president of the company that makes The Baggler, a plastic device to help carry grocery bags, made connections with distributors and direct retail operations with MITC, along with his own consultant.
“Mark has is a salesman par excellence,” said the governor. “A lot of businesses that are doing well, hiring people and growing their incomes, are businesses that are involved in exporting their products. Mathew Brothers Co. from Belfast are selling windows and other wood building products. The Japanese love Maine’s wood and wood finishes, in yachts, furniture, and housing. Matthew Brothers had a lot of MITC meetings set up. Their traditional market would have been in New England. Now they realize they can compete in the global economy and joined this trade mission. Take Nick, my hover-lawnmower guy. Since the last trip, he bought another business and is growing. The popularity of golf in South Korea and Japan has created a strong market for Nick’s HoverMowers and commercial mowers.”
Nick Nikazmerad, owns Eastman Industries in Portland. His company sold 200 all-terrain lawnmowers overseas just last year to 30 countries. He found Asian distributors for his products and said MITC’s help has been invaluable.
A new innovator in IT technology joined the mission to make the right connections for the growth of his business.
“After the reception for the state, someone called me over saying, ‘Governor you’ve got to come over and see this.’ There was Chris Frank surrounded by people, explaining his product as if he was conducting a class. Everywhere we went people wanted to know about his IT ideas and business. We’re going to work with Chris. He’s chosen Maine, over other states, to set up his business,” said the governor. “Here’s an exciting young businessperson who was a great representative for the state as part of this trade mission.”
Chris Frank, (photo below) CEO of Intelligent Spatial Technologies in Orono, has a new software device for cell phones which allows users to identify buildings and landmarks by aiming their cell phone. Frank’s iPointer application is unique and he met with internationally renowned cell phone companies including SK Telecom, Korea Telecom, Samsung, LG in South Korea, and NTT DoCoMo in Japan. Frank’s business plan involves requiring a store or restaurant to pay each time the cell phone user accesses the identity of the building with their cell.
Ben Metivier, sales manager for Atwood Lobster Co., said that because of the high demand for frozen seafood in Japan and South Korea, he may expand Atwood’s live shipping business into the frozen food arena.
“Atwood Lobster Co. were amazed at the size of the Asian market and are looking at possibilities. Cold River Vodka, who make high-end vodka from Aroostook potatoes, found new markets. All the businesses were there to create more opportunities, and it appeared that they were doing well,” said Baldacci.
Asia has a growing market for specialty quality products.
“The Japanese love L.L.Bean. There are eighteen L.L.Bean locations in Tokyo alone that are doing very well,” said Baldacci. In Japan the company offers clothes designed for an Asian market, offering the “Japan Fit” line and supplying catalogs in Japanese.
Maine’s big businesses like US Semiconductor, L.L.Bean, and others are already established in Asia, and officials hope to use this Maine brand to promote the state as a tourist destination. An estimated 6.8 million Japanese will be retiring over the next 18 months, looking for a place of natural beauty to visit and spend thousands of dollars, individually, on quality specialty gifts.
“The US Department of Commerce indicated that Japan, in particular, would be fertile ground for recruiting of tourists. They will have $450 billion in disposable retirement income expected to be in play for travel purposes in the next few years. With Maine’s established connections there, like L.L.Bean, we’re on their radar screen. With a laser-like approach in the tourism market, the state will benefit,” said the governor. “The Japanese would love the serenity and security of Maine, the natural beauty of Maine, and they would appreciate the way business is done in Maine. We have a good reputation. So when they visit Boston, we need to let them know they can take the train to Maine, see a national state park, visit the Old Port and go to L.L.Bean.”
During the trade mission, meetings were held with Korean Air to encourage the airline to reinstate its direct flight from Seoul to Boston, which was offered before Sept. 11, 2001. As a result, a market study will be conducted for Korean Air, so they can make an informed decision.
“Someone at the embassy told me, ‘Governor, focus on tourism and education institutions to help your businesses overall.’ Everything does work together,” said Baldacci.
In South Korea and Japan, the mechanics of English is taught throughout school, but students don’t have opportunities to use these language skills. Because of the global economy, more and more parents desire their children to become fluent English speakers and are looking for safe reasonably priced places to send their children to in the U.S.A. In order to obtain good internships in America, college and graduate students need English proficiency, making Maine’s community colleges and universities desirable.
“Community colleges, USM, UMO, and Dover Foxcroft Academy were all there because they were trying to recruit students or trying to place their students. It’s a big business,” said the governor. “The number of students that we met who studied at Husson College was amazing. Paul Husson has been recruiting students from Japan and Korea for years. There was a large contingent of Husson alumni for the State of Maine reception.”
With every alumnus, the state has a connection, and they often promote Maine’s quality of life and business potential. With the global economy, business between the two countries is destined to increase as the state, businesses, and individuals promote what Maine has to offer. New business courses are a part of that future.
“They held a business school forum at the Tokyo Civic Center. All the big business schools from America were there. I wanted UMO to scope out the possibilities for Maine,” said the governor. “UMO’s business school needs to incorporate some sort of international experience into their curriculum. They know that the import and export business has to be a part of businesses in the future. They need to begin to prepare students now.”
Developing relations with foreign countries takes continual work on the part of MITC and state government.
“You have to make a sustained pitch. So it’s not just this one trip. The economies in that part of the world are all running trade surpluses. The won and yen are stronger than the dollar. They are looking to spend money on our boats, value-added products, marina development, higher education for their kids, and tourism,” said the governor. “Having a sister state in Aomori helps Maine become attractive. We took a cultural education trip to Aomori as part of the trade mission.”
Aomori is located on the northern tip of Japan’s main island. The next G8 energy summit will take place in Aomori, bringing the world’s attention to the area.
Though geographically worlds apart, there are strong similarities between Maine, the land where the sun first rises in America, and Japan, known as the land of the rising sun.
“The Japanese people are sticklers for culture, tradition, and courteousness. They want to be known as treating people better than anyone else does. They want people to leave with a good feeling. I thought: if you were in Maine, that’s what Mainers would say about themselves. That’s what makes a Mainer a Mainer,” said the governor. “We share traditions of honor and respect for others. I was so pleased to see that there are a lot of similarities between the Japanese culture and the Maine culture. They couldn’t have been any nicer. Both the economic impact and the attitude of the people that we visited made me feel that this is a place I really want to come back to.”
As Maine transitions further into the 21st century global economy, more medium- and small-size businesses are waking up to the potential of international commerce. The Asian market is huge. China has 1.3 billion people, Maine 1.3 million. With a weak dollar, companies who export see strong profits with increased sales abroad. Business in the global economy has increased the importance of Maine’s International Trade Center and their missions abroad.
“The more a trade mission opens a door, making a connection with a matchmaking meeting for a Maine company, the more those companies will grow in the global economy,” said the governor. “Trade missions show people that the future is the global economy. You can’t build walls and be isolationist. There’s a world out there, and we need to be a growing part of it.”