Yesterday, Gov. Robert Bentley recognized eight Alabama companies for their excellence in exporting to foreign nations. These companies contributed to the more than $19.3 billion Alabamian exports that left our ports, runways, and railroads in 2013. Last year’s exports figure, released by the Alabama Department of Commerce, marks a fifty-seven percent increase in export revenue from 2009 levels.
Despite this positive news, there is much to be done in Alabama before we can become the globally significant contributor that Gov. Bentley purports us to be. When it comes to analyzing the United States’ international exports, it is quite important to compare progress among peer states to gauge progress and identify potential for improvement.
To do this for the state of Alabama, one should look at the figures of fellow states in the region. For example, in 2009, North Carolina’s international export figures reached $22 billion – $2.7 billion more than Alabama’s figures four years later. In 2012, the Tar Heel state reached $28.7 billion in exports. Those amounts are undoubtedly less than the official figures soon to be released from Raleigh concerning the state’s 2013 commerce statistics. Even if North Carolinian exports remained at 2012 levels, that would still amount to roughly $9.4 billion dollars more than Alabama’s 2013 figures.
To be fair, comparing any state to another involves a certain degree of incongruity; none of them contain exactly the same resources, population, educational heterogeneity, or administrative imperatives in regard to public policy and commerce. Nevertheless, Alabama must assess and alter its openness to the international market if it is to continue its current growth in the global sector and become a bankable, truly viable option for international trade. To do so, it should address the following issues:
1. Investment in Infrastructure
If I could choose any of these four issues to be immediately implemented, it would be this one. It is essential for the growth of our state and our economy. As of today, none of Alabama’s four major cities have viable public transportation options aside from bus systems. Alabamian cities that do offer bus transit still do not provide timetables that allow for frequent travel without significant waiting times.
Other states in the region, by contrast, have inter-city bus routes running dozens of routes every hour (see Triangle Transit in the Research Triangle region), rapid monorail or raised-track trains (MARTA in Atlanta or Metrorail in Miami), or public streetcars linking various parts of city centers (Chattanooga, New Orleans, etc.). If Alabama is to attract new businesses, it needs to be able to handle their workers.
Our already crowded highways (particularly in the Greater Birmingham region) are not a welcome sight for corporations looking to move 500 or more workers into an area or invest in an existing company that might be unable to meet the investor’s delivery needs due to choked-up roads. To be absolutely clear, the lack of mobility in Alabama is not only inconvenient – it is a hazard to our health and detrimental to our productivity and quality of life.
International companies know this – Singapore, Toronto, Beijing, Berlin, Mexico City, and London (cities within our top export locations) all offer rapid transit to their residents. If the opportunity ever arose to start a branch of a foreign company or organization in Alabama, why would its employees want to move to a place whose mere infrastructure would decrease their standards of living, time spent with family, and personal incomes due to transportation expenses? Simple answer – they wouldn’t.
Until this changes, foreign direct investment within Alabama will play second fiddle to exports, and we will see our products leave our borders without gaining any additional in-state revenue from their production and consumption.
2. Retention of Minds
Many of Alabama’s colleges and universities are nationally ranked and recognized as being among the best in the region. Birmingham-Southern College and Spring Hill College, for example, are consistently ranked as being two of the best private liberal arts colleges in the United States. The University of Alabama at Birmingham is a world leader in medicine, and the universities of Alabama and Auburn have between them nationally renowned programs in law, business, pharmacy, engineering, and veterinary medicine.
The state must do more to retain the educated minds that are graduating from these institutions and leaving the state to begin higher-paying jobs elsewhere. As it stands, most out-of-state students leave Alabama upon completing their degrees – and many native Alabamians (disclosure: author included) leave with them.
With a vibrant, youthful population comes innovation and revitalization – just ask Durham, Nashville, Charleston, and Atlanta. If Alabama is to continue progressing internationally, it must retain its bright minds domestically. Successful corporations are far more likely to invest in areas where the concentration of educated minds is high. If Alabama loses its scholars, scientists, and innovators, our loss is someone else’s gain.
We cannot afford to be foolhardy when it comes to retention. Alabama must fight to keep its students by providing an economic environment that values their skills and is mindful of their needs as first-time employees in an anemic job market. If it doesn’t, it will soon become an intellectually stagnant outpost within the fast- developing southern region.
3. Increased Incentives for Doing Business
Alabama and its leaders must continue seeking out companies willing to invest in the state and bring their business practices, skilled workers, and spending power to our cities. To do so, it must offer incentives that are more alluring than those offered by the competition. To do this effectively, it should make a concerted effort to deregulate the process of acquiring new trade and business deals as much as possible.
There are many situations in which bureaucratic red tape serves as a useful form of filibustering – this is not one of them. It does not help discussions about trade partnerships or aid the process of courting companies to relocate to a location – it merely frustrates potential investors by testing their patience, and can even drive them into the arms of an alternate deal they favored less than the one being negotiated in the first place.
If Alabama is serious about drastically increasing exports and opening up the state for foreign investment, it should broker low or no-tax agreements for a contracted period of time to drive investment. Once a company is here, its employees invest in the local economy by purchasing or renting properties and contributing yet again every time they go to the grocery store, out to restaurants, or to the gas pump. At this point, Alabama can begin recouping the funds “lost” by such a low or no tax agreement.
However, when you think about it, they aren’t lost funds at all; if the company hadn’t decided to take the offer, the state would not have made any money from an agreement and it would be operating without the added tax funds and revenue gained from all those skilled, insured workers who are not reliant on the state’s welfare or benefit systems (and are therefore contributing more to the state economy than they are taking out). Offering temporary incentives for investment involves a brief deficit for a potentially long-lasting surplus. In the end, it’s a win-win. Companies are pleased and the state thrives.
4. Resist Montgomery Groupthink
This final issue is perhaps the most dangerous to the continuation of economic growth, international trade, and foreign investment in Alabama. Unfortunately, it is also the issue that will prove the hardest to overcome. Alabama’s capitol is far too homogenous in its political distribution.
This is no surprise – just ask any Democratic politician in their Montgomery office (if you can find any). The acrimonious tone directed toward any opinion differing from Montgomery talking points stifles intellectual engagement within the legislature and makes the state a laughingstock – even within the largely single-party southern political climate.
The administrative and legislative branches in Montgomery must become more interactive – they desperately need the fresh ideas that policy institutes, universities, researchers, and non-profit organizations have to offer. They deride the ideals coming from the “ivory towers” of our universities, accusing them of teaching everyone to think the same way – yet they have isolated themselves to the point of forming a legislative theocracy. It is time for the legislature to govern in a manner that is representative of the republican (not Republican) ideals it once championed.
Instead of focusing on limiting reproductive rights, finding and deporting undocumented immigrants, and defending policies that limit an individual’s ability to access federally-funded healthcare, Alabama’s government should be devoting its time and resources to legislation that edifies the state through infrastructural improvements, economic incentives, educational support, and respect for ideological diversity. Until this happens, no progressive company will fully embrace it through investment – foreign or otherwise.
Don’t misunderstand me – I’m not trying to make the perfect ideal the enemy of the good practice. It is fantastic that Alabama is strengthening its relationships with other nations through international exports and investment – that’s the exact sort of thing that must continue in the future. But because we need the economic investment to continue thriving in an ever-globalizing world market, we should be increasingly mindful about what we can do to ensure our survival within it. Now is not the time for digging our heels and clinging to antiquated practices; if we resort to doing so, the heels we dig in the ground today will mire us in it tomorrow.