Export-U.com

Chapter 9: Exporting Services

IN THIS CHAPTER

- Role of the service sector in the United States and in world economies
- Differences between service and product exporting
- Places where service exporters can find assistance

SUMMARY

The service sector is the largest component of the U.S. economy and will loom even larger in the future. The United States is the world’s premier producer and exporter of services. While small companies make up most of the U.S. service sector, some of the most prominent service exporters are large companies. Service exports are growing rapidly, with the major markets including the European Union, Japan, and Canada. Most free trade agreements include provisions that make it easier for participants to sell services on a non-discriminatory basis.

Service exports have several characteristics that distinguish them from other exports. For one, they often play a crucial role in stimulating and maintaining goods exports because activities such as banking, insurance, and transportation are critical to the export of goods. Because service exports are intangible, however, it can be more difficult to communicate an offer. In addition, services are often tailored to the specific needs of the client, and thus require the client’s direct participation and cooperation. This calls for flawless interpersonal skills and cultural sensitivity on the part of the provider.

Service exports often support product exports so you might find it sensible to follow the path of complementary product exports. Large accounting and banking companies have exported by following their large international clients abroad and assisting them in their international activities. Smaller service exporters who cooperate closely with manufacturing companies are also operating internationally and aim to provide service support for those manufacturers abroad. You may also want to seek an agent, representative, or joint venture relationship with a foreign partner. An indigenous service company already has knowledge of the applicable regulations and restrictions, as well as knowledge of the identities of primary participants, potential clients, and competitors, along with other aspects of marketing in a particular country. It will also have market research, exposure, and contacts that you can use to your advantage.

Several types of government help are available to service exporters. The U.S. Commercial Service, through its network of domestic offices, provides counseling and assistance to services exporters. U.S. Commercial Service offices in foreign countries can help you sell your services in specific markets. Many of the offices have local buyer-focused websites and social media networks that can promote your company. In addition, the Industry and Analysis unit of the Department of Commerce’s International Trade Administration supports U.S. service exporters by conducting policy research and industry analysis, coordinating advisory committees, and advocating for U.S. interests in trade negotiations.

Success Story

This chapter’s Success Story is Home Instead Senior Care, a franchise service company based in Omaha, Nebraska, that provides nonmedical care for senior citizens who choose to remain at home but require personal care. After finding considerable success domestically, the company started moving overseas with the help of the U.S. Commercial Service office in Omaha. It targeted Japan in particular because of that country’s aging population and high living standard. Today, it has more than 100 Japanese franchise offices.