Conference Presentation, Panel
2016 CA Summit - Enhancing California's Role as a Global Crossroads for Trade and Investment
Milken InstituteMichael Klowden, Kevin Klowden, Caroline Brown, Maria Contreras-Sweet, Fred Hochberg, James Villeneuve
- The Milken Institute anticipates a very positive impact on California and its residents over the coming year.
- Global economic forecasts predict growth in the global middle class driven by small and mid-sized businesses exporting, while U.S. domestic growth is expected to level off.
- U.S. economic expansion is projected to be driven significantly by California's trade relationships with Pacific Rim and Western Hemisphere countries, outperforming other states.
- Canada is identified as a low-barrier market for California businesses expanding to other U.S. states, with produce shipments expected to remain strong in the next six months.
- Small business loan approval rates are expected to improve using SBA guarantees up to 90 percent, supporting marginal businesses in competitive transactions.
- The SBA aims to direct 23 percent of federal spending to small businesses, having previously reached 25.75 percent, with new rules potentially opening export opportunities through federal department spend abroad.
- Mergers and acquisitions are expected to increase as corporations seek nimbleness and technology from small businesses rather than rapidly expanding internal staff.
- SBIR grant recipients are expected to move toward commercialization to fulfill the program's job creation objectives.
- E-commerce presents persistent risks, including chargebacks occurring up to 18 months later and continued use of outdated credit card magnetic strip technology by small businesses compared to Europe.
- Financial technology is expected to remain a key driver in democratizing access to capital.
- Improved battery technology is forecast to fundamentally alter renewable energy dynamics within the next 10 years.
- Renewable agriculture techniques such as aeroponics and hydroponics offer opportunities to increase California's crop efficiency amid water scarcity.
- Veterans are expected to be a primary source of company founders due to their existing understanding of overseas markets.
- Export-Import Bank performance is measured by the number of jobs supported, with veterans and e-commerce enabling small businesses to access contracts in regions like sub-Saharan Africa.
- Trade transaction complexities are increasing due to banking regulations, with specific shipping company bankruptcies cited as emerging risks.
- U.S. government efforts are underway to better explain trade-related employment to workers, alongside extensive consultations on the Trans-Pacific Partnership (TTP).
- Universities are adding global trade degrees, expected to make exports more promising for small exporters as the marketplace evolves.
- "Made in America" products are projected to remain highly sought after globally.
- The U.S. is considered well-positioned due to the faster growth of the global middle class compared to the domestic pace, necessitating risk mitigation strategies.