Legislature(1995 - 1996)
01/18/1996 04:04 PM Senate TRD
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT INTERIM TASK FORCE ON INTERNATIONAL TRADE POLICY
January 18, 1996
4:04 p.m.
MEMBERS PRESENT
Senator Steve Rieger, Co-chair
Representative Beverly Masek, Co-chair
Representative Alan Austerman
Representative Brian Porter
Representative Jeannette James
Representative Irene Nicholia
Representative Caren Robinson
MEMBERS ABSENT
Representative Pete Kott
ALSO IN ATTENDANCE
Representative Gail Phillips, Speaker of the House
Representative Jerry Sanders
Senator Georgianna Lincoln
TASK FORCE AGENDA
-- ALASKA'S INTERNATIONAL TRADE SUPPORT NETWORK
WITNESS REGISTER
Ms. 'Pete' Nelson, Chairman
World Trade Center Alaska Advisory Board
421 W. 1st Ave.
Anchorage, AK 99501
Ms. Robin Zerbel, Director
World Trade Center Alaska
421 W. 1st Ave.
Anchorage, AK 99501
Tom Jensen, Chairman
Oversight Committee on Private Industry Needs
Assessment Survey
421 W. 1st Ave.
Anchorage, AK 99501
Tim Lane, International Trade Advisor
Kevin Krauklis
3253 Riverview Drive
Fairbanks, AK 99709
Ms. Sherry Biggs
Kenai Economic Development District
P.O. Box 3029
Kenai, AK 99611
James Kenworthy, Director
Alaska Science Technology Foundation
4500 Diplomacy, Suite 515
Anchorage, AK 99508
Mark Wilson
1400 W. Benson, #150
Anchorage, AK 99503
Jim Stevens
3605 Arctic, #2156
Anchorage, AK 99503
Patrick Burden
421 W. 1st Ave., #310
Anchorage, AK 99501
Ms. Deborah Sedwick, Assistant Commissioner
Division of Trade & Development
Department of Commerce & Economic Development
3601 C St., Suite 798
Anchorage, AK 99503
ACTION NARRATIVE
TAPE 96-1, SIDE A
Number 001
SENATOR RIEGER , Co-chair of the Joint Interim Task Force on
International Trade Policy, called the meeting to order at 4:04
p.m., and stated the purpose of the meeting was to hear
presentations and testimony regarding international trade and the
results of a private industry needs assessment commissioned by the
legislature and conducted by the World Trade Center Alaska during
the past interim.
Number 036
'PETE' NELSON , Chairman, World Trade Center Alaska Advisory Board,
said it is her responsibility to represent their membership in
programs that advance international trade that most directly
benefits their Alaskan businesses. During her nine-year tenure on
the board they've worked with a myriad of programs and on a host of
projects to expand Alaska's opportunity in international trade.
However, it has become increasingly evident in discussions with
their members and with others in the private sector that it was not
clear if these programs or initiatives were responsive or
consistent with the current international business efforts of
Alaskans. What was clear, was that no one had asked a sampling of
Alaska's private sector what their needs were regarding
international trade, education assistance, policy or promotion
efforts.
Simultaneously, the state of Alaska was initiating a review of
fiscal plans to address the declining operating budget. This year
the Alaska Legislature authorized a survey of Alaska's private
sector, and the purpose of this project was to identify a state
policy that would do more responsibly with less to enhance
international business in Alaska. This project was supervised by
an oversight committee selected by the legislature.
Ms. Nelson said the needs assessment survey should not be
considered an end result, rather, it is a unified voice of Alaskans
requesting an action, requesting a response from those who make
policy.
[BECAUSE THERE WAS INTEREST EXPRESSED IN THE PRESENTATIONS BY ROBIN
ZERBEL, TOM JENSEN AND TIM LANE, THEIR COMPLETE PRESENTATIONS WERE
TRANSCRIBED]
Number 110
ROBIN ZERBEL , Director, World Trade Center Alaska:
"On July 10, the Alaska State Legislature contracted with the World
Trade Center Alaska to conduct a needs assessment of the Alaska
international business community. To achieve the results of a
survey process that would be equitable and the results that would
garner substantive data, the legislature requested the appointment
of a broad-based oversight committee. This committee was composed
of heads of trade associations throughout the state of Alaska that
represented much of Alaska's industry. Tom Jensen, President of
the Alaska State Chamber, represents one of those individuals
serving on the oversight committee at the request of the House and
Senate leadership. Mr. Jensen will be presenting the results of
this survey on behalf of the oversight committee. "
"Members of this oversight committee met to review proposed needs
assessment questionnaires and the survey process in August. At
that time, the committee reviewed sample assessment questionnaires
provided through our consultations with ISER (Institute of Social
and Economic Research) and other professional assessment
organizations. The committee resolved, at that time, the
questionnaire should be open-ended. The document was revised and
again reviewed by the oversight committee. Committee members
approved the questionnaire you see before you today."
"Although the contract with the legislature stipulated distribution
to 600 businesses, it was determined in the oversight committee
meetings a larger distribution would be more favorable in assessing
the needs. We therefore increased the distribution to 2,000
Alaskan businesses."
"Prior to the study, no academic trade organization or government
agency had compiled a comprehensive list of current or potential
exporters in Alaska. Although the export of products can be traced
to Alaska origin, it was the growing service sector that was the
most difficult to locate. The oversight committee indicated that
only a small percentage of Alaskan companies, then estimated around
1,000, had likely ever exported or considered exporting.
Identifying the sample was an arduous task. The actual mailing
list was developed as follows:
1. A database of all Alaskan business license holders was
purchased.
2. Businesses without any Alaskan zip code were deleted from the
list, so these were strictly addresses within the state of Alaska.
3. The major industry groups were classified, as dictated by the
oversight committee, to the kinds of industry that they wanted to
survey.
4. The final step is the mailing list from the U.S. Commercial
Service (1995 version), the World Trade Center Alaska (1994 - 1995
version), and the Alaska Office of International Trade (1994
version) were put together. The oversight committee suggested
companies which had previously responded to trade agency mass
mailings would be more likely to respond to an international trade
questionnaire than companies randomly selected from the state's
business license. Therefore, these two lists were cross-referenced
and, therefore, that's how we came to the results of those who were
actually surveyed."
Number 175
TOM JENSEN , Chair, Oversight Committee on the Private Industry
Needs Assessment Survey:
"This group, the oversight committee, was formed at the request of
Senate President Drue Pearce and Speaker of the House Gail
Phillips. The committee consisted of 11 individuals and theY were:
Joe Beedle, Juneau Small Business Development Center; Sherry Biggs,
Kenai Economic Development District; Steve Borrell, Alaska Miners
Association; Chris Gates, the Alaska Forestry Association; David
Haugen, The Alliance; Carol Heyman, Anchorage Chamber of Commerce;
Chris Mitchell, Alaska Fisheries Development Foundation; Kevin
Krauklis, Fairbanks Economic Corporation and Fairbanks Chamber of
Commerce; and Dale Wade, Alaska Air Cargo Association -- a good
cross section of organizations on the oversight committee. We were
selected as individuals representing the broadest based
constituency of the Alaskan private sector involved in
international business."
"We were requested to provide oversight in three major function
areas. First, we provided advice and comments on the assessment
process, in general. Secondly, we provided advice and comments on
the private sector survey tool itself. And lastly, we reviewed the
process of this needs assessment from the beginning to the end. I
must say that Alaska has taken its first and most critical step in
enhancing the private sector's ability to successfully do business
internationally. How? What we did is we asked the private sector,
a big thing."
"Now, this needs assessment was unprecedented here in Alaska. A
handful of other states have conducted international business needs
surveys and those, and other states that have not, were contacted
for survey samples. They were very interested in Alaska's survey
process and the resulting changes in policy toward international
trade. Respondents to the survey within Alaska were overwhelmingly
appreciative of being solicited to provide their input in this
process, and, in fact, that request prompted some individuals to
get so enthused that they composed individual letters and went on
and on and on. Of the 2,000 surveys that were mailed out, we had
a 13.5 percent response rate and that's not bad. We received 271
completed surveys, many who favorably commented about this
precedent-setting project. "
"Now, the important question: What is it that the survey tells us?
Before you today are the complete results of that survey inclusive
of the independent comments and each and every question responded
to by those respondents in the survey. Additionally, it includes
a copy of the survey, a list of who responded by the project
completion date, and a breakdown of the industry sectors that were
surveyed. Certainly, you and your staff will have a chance to
review it at your own leisure and to see if there are other
questions that we may not answer today that you may want answers
for in the future."
"However, the reason that I'm really here today is to provide you
with the major conclusions of this international business needs
survey and to demonstrate, hopefully, how Alaska can do more
responsibly with less. Now, after studying this document in great
detail, some general observations were: information gathered show
that 62 percent of the respondents are motivated to export or
consider the export business because this is part of their long-
term business development plan and they have some special knowledge
of a foreign market opportunity. We also learned that 66 percent
of the respondents gave an international trade lead the same
priority as a domestic lead; it's important to them, they are
really interested. "
"Potential exporters, those who aren't exporting yet but have the
idea in their mind, provided these statistics: 55 percent of those
potential exporters responded that finding foreign customers and
then finding the information on the market for their company's
particular product or their company's service is the biggest
obstacle they have. That's the biggest obstacle and that's what
keeps their companies from exporting. 90 percent of potential
exporters responded that they never ever use government assistance
for international trade. Now, 25 percent of those potential
exporters would seek a private source for more information in the
international trade arena; 22 percent of those potential exporters
would use the U.S. Commercial Service; 15 percent would use the
state Division of Trade & Development; 13 percent would use the
World Trade Center Alaska; 9 percent would use the University of
Alaska, including the Alaska Center for International Business; 4
percent would use University of Alaska Fairbanks; 4 percent the
Alaska State Legislature; and 1 percent would use the University of
Alaska Southeast. "
"Now, of the exporters, those folks doing the business
internationally, we gleaned from this document that 86 percent of
them use bank lines of credit as their export finance source; 41
percent said that they are actively involved in foreign joint
ventures, that's how they get in and that's how they stay in; and
56 percent said they have not used governmental assistance for any
international trade -- those are the folks that are doing the job;
29 percent of those exporters say that they would use private
sources for trade assistance -- they are willing to pay for
private; 43 percent said that they would use private sources to
find more information in the international trade world; 23 percent
said they would use the World Trade Center; 16 percent would use
U.S. Commercial Services; 10 percent would use the Alaska Division
of Trade and Development; 6 percent would use University of Alaska
Anchorage; and about 1 percent would use SBA."
"Respondents, again, on the exporting side of the house, their
sales activity for the last fiscal year says that Japan was first,
followed by Russia, Canada, Germany, the Peoples Republic of China,
and South Korea. And those exporting project that by the year 2000
the international market activity will be: Number 1, Russia;
Number 2, Japan; Number 3, Korea; then the Peoples Republic of
China, Canada and Germany. So those are some of the statistics,
the numbers, the percentages. So what does it all mean, what do we
consider the key findings, the resulting conclusions?"
"From a global perspective, this is what we consider the key
finding. The respondents stated clearly that international
business is part of their long-term plan and they are doing or
seeking to do business throughout the entire world -- identified
countries and regions were surprisingly varied. For example, they
were looking at potential business in Ireland, Israel, the Ukraine,
Indonesia, Indiana, Vietnam, Chile, Austria, the Middle East,
Peoples Republic of China, and, of course, Russia. And the
respondents projected to do business in an even greater extent in
a broader variety of countries during the next five years -- they
see it expanding and improving. The conclusion drawn from this
information is that financial resources should be redirected to
regions or areas where Alaskan businesses are considering doing
international trade, as opposed to just the shotgun approach of
shooting it everywhere. "
"What are some of the obstacles to trade international? Well, the
survey showed that potential as well as experienced exporters
identify that locating market information and foreign customers are
their major obstacles to trade -- getting that information. The
survey respondents familiar with the U.S. Commercial Service rate
them very highly for their ad hoc services in locating market
information."
"We therefore conclude that foreign market information is available
free through the U.S. Commercial Service. Governmental agencies
and organizations, as well as trade organizations and economic
development organizations, should all refer individuals inquiring
or soliciting information to this service as it was highly rated by
the respondents as being the most effective. "
"We also conclude that the state of Alaska could better support
those referrals to the availability of information to the U.S.
Commercial Services."
"We conclude that Alaska could be better supported to overcome
these obstacles by providing a centralized contact point, as
opposed to the many points we have now."
"Another key finding was that respondents recognize the importance
of trade missions and trade shows in finding foreign customers --
one of their major problems, it is important to do those things.
And the conclusion would be that the state might establish a policy
that trade missions and trade show destinations are driven by the
private sector needs, as opposed to, possibly, speculation. This
policy could include that funds allocated for any overseas travels
by state officials would be considered as a trade mission with
private sector participation. Lastly, the trade missions and/or
trade shows should be contracted to an organization or an entity
that can provide a consistent, a professional and an apolitical
service."
"In the financial arena, the findings indicated the use of regular
bank lines of credit to conduct business was documented as the
standard -- that's how they do it. The conclusion might be that we
redirect funds from an existing trade promotion, provide assistance
or financing through other entities to establish export finance
assistance to those people. We also found that the federal program
usage was negligible and state program usage was nonexistent -- it
wasn't there. That leads us to conclude that a review and correct
legislation and administration to respond with a newer, more
effective program that meets their needs would be appropriate."
"Respondents, especially those who were experienced exporters,
documented their high priority need for an access to money. That
leads us to conclude that maybe this export finance unit to the
private and the private/public entity working regularly with
international business in the Alaska private sector would be
helpful."
"Now, where do Alaskans go for assistance? The private sector is
using the private sector for international business assistance, not
government. They are using friends, family associates, customers,
suppliers, or private consultants. So we conclude that Alaska's
private sector is creating its own private sector for international
expertise, as opposed to relying upon government entities."
"A large percentage of the respondents were unaware that the
agencies indicated in the survey had services available. The
conclusion there might be that the general fund dollars have been
used ineffectively in communicating or in providing services to
Alaskan businesses."
"Respondents also consistently rated the U.S. Commercial Service
the highest for its effectiveness in ad hoc services. The World
Trade Center rated the highest from exporters and the Division of
Trade & Development, formerly the Office of International Trade,
was rated the highest by potential exporters. Other programs and
services received negligible responses. From that we conclude that
the general fund dollars supporting trade policy, finance
assistance and education could be streamlined. Maybe a more user
friendly program that's flexible and responsive to the changing
private sector is the service most wanted by our Alaskan firms
looking at international trade."
"The respondents were very frustrated with the number of programs
and services, the conclusion there being a centralized contact
point that has credibility with the private sector has possibly the
best chance of serving effectively the private sector."
"We believe that this survey and its results are good news, believe
it or not, for government and for business. The reason for that is
because in this time of fiscal planning, to provide data for
targeting international trade with a rifle, as opposed to a
shotgun, therefore allows us to be more responsible with less."
"That concludes my presentation."
Number 387
SENATOR RIEGER said in the presentation three things were outlined
generally: information, diplomacy function, and financing. He
said he has always had a preordained conclusion that only the first
two were things that the state might have a legitimate role in, and
he asked if there really is a unique need for financing that can't
be met by the private sector in the financing side, or if there are
other things beyond those basic three categories that he missed in
the remarks. ROBIN ZERBEL responded that the survey didn't address
what those particular needs are that are specific in finance.
However, she added that from the World Trade Center's perspective
and her personal experience, they don't really know what these
companies want and the companies don't really know what they want -
- everybody wants money, but they don't know how to get it. If
there was a person identified to be working in this arena, then
they could call that person and ask what the exporters, importers
and investment people want for finance, and until that is done,
they are never going to be able to answer that question. She also
said that access to capital doesn't necessarily mean the state
would have to finance anything.
Number 425
REPRESENTATIVE JAMES asked if anyone was using the Alaska
Industrial Development and Export Authority (AIDEA) for export.
ROBIN ZERBEL answered that AIDEA has funded a number of projects
that are involved in export, but they are here and they have not
had any takers on their export financing program. She added that
if no one is using it, it seems to her that it is not working and
that it needs to be fixed. Also, she is not sure that Alaska
warrants a financing program, because there are a lot of other
answers out there for that.
Number 443
REPRESENTATIVE GAIL PHILLIPS asked if on the centralized entity
concept there was any feedback on how that centralized entity
should look, where it should be located, etc. ROBIN ZERBEL said
the respondents to the questionnaire offered all kinds of
suggestions, but they all called for a central location. They
don't really care where it is physically, but she believes there is
a call here for them to ask for consistency, an entity that has
credibility, and a unit that is working together. She commented
that she would like to see it at the World Trade Center.
REPRESENTATIVE GAIL PHILLIPS asked if the conclusions in the report
will tell the reader very specifically and very clearly that the
services that we provide as a state today are not providing the
service that the client needs. ROBIN ZERBEL answered that some of
the programs that were reviewed are not official state agencies or
organizations, but the money that's gone into programs and
initiative has not been effectively used to respond to the private
sector.
Number 530
REPRESENTATIVE MASEK , Co-chair of the task force, asked how many of
the 271 people that responded to the survey knew of the state
agencies and the services available to help them in getting their
business and trade started. TOM JENSEN responded that a number of
the people responding to the survey didn't know of the services
provided, or they were not comfortable with the services that were
provided, or they didn't feel the services that were provided is
what they needed so they went to the private sector. He added that
over 70 percent aren't interested in government assistance at all,
which tells you that the government program isn't doing the job.
He reiterated that the theme that came through in the survey was
centralization, to listen to the private sector as to where they
are going and what markets they are after, and then target the
assistance in those regions and in those markets as opposed to
trying to be everything to everybody.
Number 561
SENATOR LINCOLN expressed her great interest in international
trade, but she wonders how many Alaskans really know that Alaska
has an offices in Taiwan, Korea, Japan and how many use those
offices to promote their particular business or to have the
particular business from those three countries to join forces with
perhaps somebody in Alaska. She asked if when we have a presence
in a country, is that a more positive versus closing down those
three offices and not having any presence. ROBIN ZERBEL replied
that only one respondent commented to keep those offices open,
although that question was not asked. She noted a great portion of
the survey represented the service sector, and the survey
demonstrates the service sector is going all over the world.
Number 623
REPRESENTATIVE JAMES asked if as a member organization and in
serving its membership, the World Trade Center receives a lot of
contributions by the members who bring to this organization their
knowledge and share it with other members. She also asked if that
possibly is the kind of an organization that might have a better
ability to do those kinds of things because of this growing
information this is gleaned from the people who are actually doing
the exporting or importing. ROBIN ZERBEL responded that she
believes there is a real benefit because companies are paying a
matching fee for their services, and that means that the state
doesn't have to subsidize the whole portion for assistance. It
provides a lot of opportunity for people to use each other as the
experts and use the private sector. Another benefit is that an
organization like theirs has to respond to its membership,
therefore, when markets change, there has to be a system in place
to be able to respond rapidly to those changes.
REPRESENTATIVE JAMES asked Mr. Jensen if could expand on what he
would visualize to be the state's role in any kind of trade show.
TOM JENSEN suggested that private enterprise could represent itself
at these trade shows, but he believes the state has a
responsibility as a state to represent that industry in a whole, so
therefore, the state would be a participant in assisting in funding
that.
SENATOR RIEGER thanked Ms. Zerbel and Mr. Jensen for their
presentations and then stated the task force would next hear from
participants waiting to testify over the Legislative Teleconference
Network. The first to testify was Tim Lane, who was contracted by
the legislature to do an analysis of state agencies and federal
agencies involved in international trade.
Number 684
TIM LANE , International Trade Advisor, testifying from North
Carolina:
"In October, at the request of the legislature and in conjunction
with the legislature's review of the state international policy, I
conducted a comprehensive analysis of Alaska's trade assistance
network. The analysis incorporated a number of elements, which
I'll cover briefly as an introduction and leave as a basis for any
future questions that you might have regarding the integration of
the private sector survey or anything that I would hope to tell
you."
"The primary three areas that we brought up were: (1) policy: the
appropriate role of state government in international trade and
affairs; (2) the structure - what is the most effective way to
structure an international trade assistance network; and (3) to
develop a fiscally sound trade budget to compliment a structurally
sound international trade support system. In the budget element,
in particular, it wasn't so much an attempt to set a certain number
to cut, but, rather, to identify areas where the budget could be
reduced, where organizational activities could be replaced by
private or federal level, or where activities were no longer
consistent with the changing realities of a global marketplace. "
"To intensify the scope of these issues among the organizations
that we chose, each organization was evaluated according to its
activity in three specific areas: (1) export assistance -- that is
the services that the state currently provides to companies seeking
to export their products and services to foreign markets; (2)
foreign investment promotion and protocol activity which was
bunched together -- while both export assistance and foreign
investment promotion are highly international in nature, the
approach to effectively promote both of them is highly distinct,
and naturally we felt they were separated; and (3) international
education -- the focus of this was primary trade organizations and
the international education services they provide to companies and
the public at large. "
"Organizations were specifically examined, among other points, to
identify areas of activity duplication, obsolete activities,
service specialization -- that is the extent to which the
organization specializes and perhaps excels in a certain capacity.
The inner organizational cooperation -- that is the extent to which
they cooperate with other trade groups in the state to promote
Alaskan trade; and finally and most importantly for purposes of
this analysis was the overall extent, which were relevant within
the context of achieving a global marketplace. A number of these
programs were set up 10 years ago or even longer and some of the
activities are no longer necessarily consistent with the changing
global marketplace. As a result, the primary analysis focused on
that in great detail."
"That's the primary background on the methodology and the points
which we reviewed. If you have specific questions, I'm open to
answer any of those."
TAPE 96-1, SIDE B
Number 740
SENATOR RIEGER thanked Mr. Lane and stated that his international
support network restructuring recommendations were just being
presented to the task force and it was not his intention to ask the
task force to take any action or position on them until they have
had the opportunity to fully review the document.
Number 755
KEVIN KRAUKLIS , a Fairbanks businessman and member of the Project
Oversight Committee, said until this past summer he was president
of Flowline Alaska, a Fairbanks company specializing in pipe
insulation. In 1993, Flowline Alaska and the City of Moscow, as
50/50 partners, formed a new Russian company to operate a pipe
insulation plant in Moscow, which is still operating and doing
well. Valuable Alaska resources used for setting up this business
in Russia were the Alaska State Chamber of Commerce, U.S. Foreign
Commercial Service, State Office of International Trade and the
World Trade Center Alaska. He also said that if it were not for
organized trade missions, Flowline Alaska would not be doing
business in Russia.
While he strongly prefers private sector initiative over public
sector, Mr. Krauklis believes there is a very valuable role that
the state government can play in helping Alaskans find the right
opportunities in Russia. State government participants or
organizing a trade mission to Russia can open a lot of doors that
a private Alaskan cannot. One of the main keys to success of these
trade missions, though, is a high level of private sector financial
contribution and commitment to the organizing group's expenses.
Number 892
SENATOR RIEGER asked if the state's role in trade missions is that
of being along to add credibility to the people who are on the
trade mission, or is it in organizing it in the first place, or
both. MR. KRAUKLIS replied he thinks it is in the sanctioning, of
being part of the group. A government representative from the
state of Alaska can open up a lot of doors over there.
Number 929
REPRESENTATIVE MASEK asked what can be done to strengthen and
enhance the private sector's business and trade policies. MR.
KRAUKLIS suggested consolidating some of the organizations that are
involved in international trade because one-stop shopping would be
very helpful. He also suggested there is a need to have the World
Trade Center and the Division of Trade Development work on
developing the trade missions and trade shows for Alaskan
businesses to participate in. He added that he thinks the results
of the survey and the recommendations that came out of the survey
are pretty much on target.
Number 969
REPRESENTATIVE PORTER asked Mr. Krauklis where he went to determine
the "do's and don'ts" when trying to establish a business
relationship with Russia. MR. KRAUKLIS said that was another
benefit of a trade mission. Just by going on a trade mission and
watching the experienced people who are part of the trade missions,
he was able to pick up many of the do's and don'ts.
Number 019
REPRESENTATIVE AUSTERMAN commented that he agrees with Mr. Krauklis
that the state has to be the "door opener" and the lead in carrying
the message of Alaska's trade to these other countries.
Number 040
SHERRY BIGGS , Kenai Economic Development District, ARDOR for the
Kenai Peninsula Borough, related that since 1990 they have been
working with Russia and Japan in establishing sister city
relationships. They have learned that foreign governments look to
work with a regional or local agency. The assistance they have
received from the Division of Trade Development, in both the Tokyo
office and the Anchorage office, has been instrumental in the
success of their establishing a sister city relationship with a
city in Japan. There are now commercial wholesale representatives
in Japan who are ready to purchase fish directly from Kenai
businesses. She said they believe it is their role to open the
doors and establish the rapport and set that level of credibility
so that private business can then step in.
Number 078
JAMES KENWORTHY , Director, Alaska Science Technology Foundation,
Anchorage, said satistics show that about one in seven jobs in
Alaska is in the traded goods sector versus one in three
nationally. He said the state can change its economic base over
time. The state has to organize and justify its activities in
terms of what expands the trade goods sector of its base -- that is
what goods or services Alaska has to sell to the world. To do
that, he suggested it is necessary to improve the competitiveness
of existing firms and increase the start-up firms and the rate by
which they can succeed. He noted all states and regions have done
much better by trying to grow their own economy rather than
creating incentives to attract outside investors to the state. The
ingredients of growing businesses are nothing more than technology,
capital and labor.
Number 165
MARK WILSON, an Anchorage businessman, said, in general, his
experience has been that beginning with the state functions,
activities and services, which he has used extensively, he has
found that his experience with the international trade offices in
Japan and Korea has been very keen. He has found the staff to be
very helpful and, in many cases, have provided the services which
he specifically needed, largely the facilitation of his efforts to
make contact. They have been able to facilitate his ability to
network with other exporters throughout the export/import market of
Alaska. They have helped him participate in trade shows, many of
which he could not have participated in individually, but he was
able to participate by being an associate member with other
businesses in Alaska. These trade shows were completely and
exclusively supported by the Office of International Trade. He
noted that he has not availed himself of the other agencies in the
private sector, primarily because of cost, or he has found that he
was probably more experienced at doing what they offered to do for
him. He added that the World Trade Center Alaska and the U.S.
Commercial Service have also been great sources for his company.
Number 252
JIM STEVENS , owner of a consulting firm in Anchorage that
specializes in rural tourism development and marketing, stated his
has used both the services of the Office of International Trade and
the World Trade Center. In 1991, the Office of International Trade
introduced him to the Korean market for tourism, and without their
assistance, he would not have been able to generate the volume of
business that he accumulated over the years. They were
instrumental not only in introducing him to the markets, but
supporting his efforts in developing those markets as well. No
other agency, state or federal, has stood beside him like the
Office of International Trade did.
Mr. Stevens also spoke to the need to reestablish an international
trade office in Taiwan where other states with even less trade
relationships than Alaska have a presence. An office in the
Pacific Rim countries is necessary to understand the culture and in
that culture the importance of face is fundamental. He said he
sees no real benefit to cutting any of other state's efforts in the
Pacific Rim countries, in fact, if anything, the funding should be
increased.
Number 317
REPRESENTATIVE GAIL PHILLIPS asked Mr. Stevens his thoughts on
centralizing the function for all of the world trade and
international trade agencies. MR. STEVENS replied that it would
probably work good in Alaska, but he didn't think it would work
overseas because of the variations in cultures.
Number 330
PATRICK BURDEN of Northern Economics in Anchorage, spoke to the
need for some sort of financing center in the state for
international business. He is often contacted by companies and
organizations in Anchorage about financing, but often he can't help
them because they are small companies or they are new companies and
they can't afford what his company charges. Most of his work is
for the government entities, for the large corporations. He would
like to help the smaller companies, but what they need is an
inexpensive source or resource of information and guidance on
getting financing for exports. He pointed out that the program the
state of Washington has, perhaps with some modification, could be
used as an model for establishing a program in Alaska. He
suggested that such a center should be placed within an existing
agency.
Number 375
REPRESENTATIVE PORTER asked what function or capability the
financing agency he described would have that AIDEA now doesn't do
or have. MR. BURDEN answered that he thinks AIDEA has the
authority, but he is not sure that they are really acting in that
role, and, if they are, maybe the public isn't aware of their role
in international finance. He also acknowledged that he wasn't
specifically recommending that it would be government financing
versus private financing.
Number 405
DEBORAH SEDWICK , Assistant Commissioner, Division of Trade &
Development, Department of Commerce & Economic Development,
testifying from Anchorage, stated their office has been eagerly
awaiting the results of the survey, and that they look forward to
seeing the results, as well as the recommendations. She expressed
their willingness to work with the legislature, the administration
and the private sector to do a better job with less.
Number 425
REPRESENTATIVE MASEK , in her closing comments, expressed her
appreciation for all of the work that's been done so far and the
task force's willingness to work with all of the people involved
in trade in looking for better ways to ensure that Alaska is going
to have a stronger and easier process for people wanting to get
involved in trade.
SENATOR RIEGER , in his closing remarks, said the task force would
welcome written testimony to accompany what had been testified to
during the meeting, as well as written comments from anyone in the
private sector who did not testify. He added that it is not clear
yet what the format will be for the next meeting and how the task
force is going to proceed, but that it is the intention of the co-
chairs to schedule another meeting no later than the end of
February.
REPRESENTATIVE PORTER commented that it is interesting that many of
the comments in the survey are indicative of the perception that
there is need for a coordination, continuity and combining other
efforts, and the fact that this was a combined Senate and House
meeting meets that need so that people don't have to come in and
give identical presentations to separate committees.
REPRESENTATIVE SANDERS commented on the importance of having face
to face contact with people of other cultures several times before
being able to do business with them., as well as the important part
that government plays in these negotiations.
CO-CHAIR RIEGER adjourned the meeting at 5:45 p.m.
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