Exports, competitiveness and regional clusters

Yesterday Brookings released a new report on exports and metro areas. While the report contains good analysis and recommendations, I fear its scope is too limiting. The report highlights which metro areas are competitive in which industries - as measured by exports. And it does a good job of including services "exports" such as foreign student studying in the metro area. But the report should really about competitiveness and regional clusters.

International exports are only one part of the equation. Every metro area has "exports" regardless of whether those goods and services leave the boundaries of the US. Every car build in Michigan that is sold in Texas is -- for the local economy -- an export. The study specifically focuses only on the international exports. For a complete view, it needs to include the sales of the metro area to other U.S. regional economies.

Under that view, I wonder how much of the conclusions change. For example, the standard analysis shows that exporters pay higher wages. But is that true only for international exporters or domestic exporters as well? In other words, are international exporters really different -- or is the major difference between those who produce for the local economy and those who produce for "export" outside of the metro/regional economy?

I suspect it is the latter. And that conclusion has a very different implication for public policy. It speaks more toward improving the competitiveness of the domestic export firms (including strengthening clusters) and upgrading the for-the-local market firms as well as promoting foreign trade and opening foreign markets.

Promoting international exports is a positive policy But promoting competitiveness is a much broader policy.