Comput. & Indus. Engng Vol. 9, No. I, pp. I-7, 1985 0360-8352/85 $3.00+ .00 Printed in the USA. Pergamon Press Ltd.

ALABAMA'S INTERNATIONAL TRADE INFORMATION SYSTEM

B R U C E E . H E R R I N G Depar tment of Industrial Engineering, Auburn Univers i ty , Auburn , AL 36849, U.S.A.

and

BECI,:V P. BLAKE Alabama Office o f State Planning and Federal Programs.

A b s t r a c t - - T h i s article reviews the economic benefi ts available f rom international trade and notes how current information can serve as a s t imulant . The main purpose of the article is to present the data base content and use r friendly operat ion o f A l a b a m a ' s Internat ional Trade Informat ion System.

I N T R O D U C T I O N

World events have made international trade more important to the United States here in the early 1980s than during any previous time since World War II. A strong trade position has become a matter of great significance to the economic strength and welfare of this nation. Recently, exports have accounted for more than one in every eight jobs in America's factories, and one in every four on the farms and ranches.

The President's Export Council neatly summarized the national objectives of export expansion:

1. To pay for the increasingly expensive oil imports and other essential raw mate- rials.

2. To reduce existing unsustainable trade deficits. 3. To strengthen the dollar as the world reserve currency. 4. To provide additional jobs, not only during recessions, but as an offset to the

chronically high unemployment levels. 5. To increase the level of real income to American workers. 6. To bring in foreign-source income to bolster the rate of capital investment. 7. To provide industry with greater economies of scale, broader markets and pow-

erful incentives for innovation and productivity improvements. 8. To provide additional funds for national defense. 9. To keep markets open to trading partners and allies. 10. To prevent inflationary and self-defeating protectionist measures. 11. To encourage the expansion of world trade and world economic development. 12. To help restore U.S. economic, military and diplomatic credibility, and with it

hope for a more peaceful and prosperous world [8].

U.S. EXPORT POSITION

As the recessionary trend continues to take its toll on the U.S. economy, the im- portance of penetrating foreign markets becomes even more critical to its overall eco- nomic well being. Small and medium sized firms are particularly hard hit as U.S. goods are no longer strongly sought after in the face of aggressive competition from other developing and industrialized nations. These developments in international trade are closely interrelated with domestic economic uncertainties. Inflation, lower productiv- ity, lagging investment in research and development are simultaneously the result and cause of many of the United States' economic problems. Expanding exports is not a complete panacea, but is without a doubt one of the more positive directions needed if the economic situation is to be improved. Exports create jobs, improve the value of

~RU(' t [~. HERRING

Table 1. Share of world exports [51

1970 1975 1978 1979 1980

(Percent)

United States 15.4 13.6 12.1 12.1 12.0

France 6.4 6.7 6.7 6.7 6.3

Germany, Fed. Rep. 12.1 11.4 12.0 11.5 10.5

United Kingdom 7.0 5.6 6.0 6.1 6.3

Japan 6.9 7.1 8.3 6.8 7.1

the dollar, act as constraints to inflation and have positive income and output effects on the economy.

Recent trends in U.S. productivity and investment have weakened the ability to compete abroad and eroded the industrial base at home. While the U.S. has one of the highest levels of capital per worker and productivity in the world, the U.S. advantage in these areas is rapidly diminishing. A recent survey of 19 industrial countries indicated that the United States now ranks 17th in the rate of productivity growth and 19th in the rate of investment (2). Other surveys have indicated the United States has had a decline in research and development expenditures, while other developed countries are increasing theirs. If the U.S. loses its technological lead, it will have serious con- sequences for the international competitiveness of U.S. products. While the United States has in fact steadily increased its export dollar volume, it has ironically experi- enced a simultaneous decrease in its share of world exports from 15.4% in 1970 to 12% in 1980 (see Table I). U.S. exports have not kept pace with those of other free-world countries who accept exporting as an activity that deserves a high position in their national priorities. There are roughly 300,000 manufacturing firms in the U.S., but only ten percent do any exporting. In fact, U.S. Department of Commerce statistics reveal that I00 large companies account for one-half of all U.S. exports. By contrast, selling overseas is a way of life for most countries of the world. France, e.g., exports 12% of its GNP, West Germany exports 22%, the United Kingdom exports 23%, and Japan 12.5%, compared to the l T q. 9.7% (4).

AN INFORMATION AID

An information system dealing with aspects of international trade has recently been developed for Alabama industry, The primary purpose of this system is to stimulate the State's economic base by alerting Alabama business to specific opportunities, par- ticularly export related, in international trade.

The data base for this computer oriented system is structured on the data form shown in Fig. 1. As shown, several general information items are stored for each firm. Included is general profile and identification material and certain trading data related to inter- national operations. This latter area includes a general product listing, yes or no answers to questions related to the depth of interest expressed by each firm and the extent of past trading effort. The data base experiences at least one annual update and presently includes more than one thousand listings.

The retrieval system was written using FORTRAN 77 as the source language, is extremely user friendly, and functions on a Hewlett-Packard System 3000 Model 44 computer. Since users of the system are definitely not computer oriented, extra effort was made to develop a retrieval system which would both guide the user in each operational step and provide the user with needed output which arrives in a useful form. In order to assure the latter, the development team consisted of both users and folks who "spoke computer". The system operates on a completely time shared, remote access basis.

Alabama's international trade information system 3

Information system access begins with a simple log on step followed by entry of the name of the compiled version of the program. From that point, use is completely guided by "computer generated" questions along with suggested answers and alternatives. The sequence of steps begins with the following being displayed on the terminal screen:

This program will perform any of the following searches:

0 Find and list all firms having a trading experience with certain countries or areas. 1 Same as choice 0 above 'Find and list all firms having a trading experience with

Governor 's Off ice of International Trade Development

Company Name:

Mail ing Address:

City e, Zip:

Contact Person & Title

COMPANY PROFILE INFORMATION

Telephone: Telex: Year Established: Number of Employee~

What are your gross yearly sales?

1. $ 1 0 - 25,000 4. $250. 500,000 7. $5. $50 million 2. $26 - 50~00 5. $501,000 - $1 million 8. $50 - S10G million 3. $51 - 250,000 6. $1 - $5 million 9. Over $100 million

Approximately what percentage of your firm's gross sales are generated through exports?

1. Oek 2. 1-15~ 3. 16-25~o 4. 26-50% 5. Over 50°k

INTERNATIONAL TRADING INFORMATION

I. List the product {s) you manufacture or deal with and their standard industrial code number (s) {if knownL

2. What product Is] do you now or are you interested in exporting?

3. What product {sl do you now or are interested in importing?

4. Indicate which of the following are of interest to your firm: {a) Exporting your product (s) to a foreign country. {bJ Having your product manufactured by a foreign company. (c) Manufacturing a foreign company's product in your plant. (d) Importing products to Alabama.

5. Indicate which of h following your firm wouM be irJterested in receiving information about: la) Trade missions to foreign countries. (b) Trade fairs and catalog shows in foreign countries. {c) Joint venture and licensing contacts and seminars.

6. Indicate which of the following your firm would do in order to reach foreign markets: {a) Sell directly to foreign firms. (b) Use an agent or distributor in the foreign country. {c) Use a U.S. based export macmgomant company. Id) Contract with U.S. firms already doing business abroad.

Fig. I.

BRU(:;E E. H E R R V ~

7. Indicate the areas your firm is interested in receiving trade leads from:

1 South America 2 Central America 3 Caribbean 4 Mexico 5 Canada 6 Europe 7 Africa 8 Middle East 9 Japan 10 Other Asian 11 Australia/New Zealand 12 Other

8. Indicate the countries you have exported to in the last ten [10} years:

I Afghanistan 3 Africa 6 Albama 9 Algeria 12 Angola 15 Aqlegtiua 18 Australia 21 Austria 24 Azores 27 Bahamas 30 Bahrain 33 BanEjadesh 36 Barbados 39 Ba!gium 42 Bermuda 45 Boliva 48 Brazil 51 8utgaria 54 Cambodia 57 Cameroon 60 Canada 63 Chile 66 China 69 China (Taiwan) 72 Colombia 75 Costa RICa 78 Cyprus 81 Denmark 84 Dominican Republic 87 Dutch West Indies 90 Ecuador 93 Egypt 96 El Savador 99 [thopda 102 Fiji 105 Finland

106 France I l l French Guiana 114 Germany. East 117 Germany, West 120 Ghana 123 Gibraltar 126 G4"eece 129 Guadeloupe 132 Guam 135 Guatemala 138 G~Jyana 141 Haiti 14.4 Hawaii 147 HOndLwas 150 Hone KonE 153 Hungary 156 Iceland 159 India 162 IndonesJa 165 Iran 168 Iraq 171 hejand 174 Israel 177 Italy 180 Ivory Coast 183 Jamaica 186 Japan 189 Jordan 192 Kenya 195 Korea 198 Kuwait 201 Lebanon 204 Liberia 297 Libya 210 Luxembour~ 213 Malawi 216 Malaysia 219 Merbniqoe 222 Mexico 225 Morocco 231 Netherlands Antilles ,234 Netherlands, The 23? New Zealand 240 Nicaragua 243 Nigeria 250 Norway 253 Oman 256 Pakistan 259 Panama 262 Paraguay 265 Peru 268 Phillipmes 271 Poland 274 Portugal 277 Puerto Rice 280 Rhodesia 283 Romama 286 Saudi Arabia 289 Scodand 292 Singapore 295 Spain 298 Sri Lanka 301 Suriname 304 Sweden 307 Switzerland 310 Syria 313 Tahiti 316 Taiwan 319 Trinidad/Tobago 322 Turkey 325 Uganda 328 [U.S,S R ] 331 United Arab Emirates 3,34 United Kingdom 337 Uruguay 340 Venezuela 343 Virgin Islands ~ Y~o~lavia 353 Zaire 356 Zambia 359 Zimbabwe 500 Other

Fig. 1. Contd

certain countries or areas' except searching is also by a specific SIC code in combination with the geographic interest.

2 Find and list all firms seeking business in certain countries or areas. 3 Same as choice 2 above 'Find and list all firms seeking business in certain coun-

tries or areas' except search is also by a specific SIC code in combination with the geographic interest.

W H E N YOU ARE READY TO C O N T I N U E , D EP RES S T H E CARRIAGE RE- TUR N KEY.

The above display is retained for user review until the indicated key is depressed. When that occurs, the following new display is presented:

4 Find and list all firms interested in trade fairs and catalog shows dealing with specific SIC codes and geographical areas.

5 Find and list all firms interested in trade missions dealing with specific SIC codes and geographical areas.

6 Find and list all firms EXPORTING products covered within specific SIC codes. 7 Find and list all firms IMPORTING products covered within specific SIC codes. 8 Find and list all firms having any of certain ZIP codes. W H E N YOU ARE READY TO C O N T I N U E , D E P R E S S T H E CA RRIA G E RE- T U R N KEY.

The display is again retained for user review until the noted key is pressed. When that happens, the following is shown:

To select a particular search, type the search number; e.g. type a 0 to initiate ~t search for firms having trade experience with certain countries or areas. Additional

Alabama's international trade information system 5

instructions are provided with each search selected. You may exit this program at this time by typing a 9. Please type a 0, I, 2, 3, 4, 5, 6, 7, 8 or a 9.

User responses related to trading experience with certain countries, with trade fairs and catalog shows, or with trading missions (options 0, 1, 4 or 5) cause the user to be asked:

Do you wish to utilize the extended list of countries (type YES or NO)?

If the answer is yes, searching is keyed to the 118 countries listed in item eight in Fig. I, otherwise the search is confined to the Department of Commerce list of trading areas contained in itbm seven in the same figure. In either case, the user is asked to specify the identification number of the country or area and to use the ID number which is shown in Fig. 1. Certain search choices are related to a specific Standard Industrial Classification (SIC) code (options 1, 3, 4, 5, 6 and 7) and if chosen cause the user to be asked:

Please type SIC code of interest

If search option 8 (finding firms having any of certain ZIP codes) was selected, the user is asked:

How many different ZIP codes exist in your search area?

The number, when entered, will cause the following question to be asked until that number of ZIP codes have been entered:

Please type ZIP code number i

Data base searching begins after the search option and the related search parameters have been entered. Depending on the quantity and type of other jobs active in the host computer, one to three minutes may be required to complete the search. Completion of the search effort is signaled by either of the messages:

No firms have matched. or

--firms have matched. You may have these displayed on your terminal or printed on the line printer or both. Do you wish to have the material displayed on your terminal? (type YES or NO)

If no firms are found that match, the user is queried concerning interest in continuing interaction with the search procedure (see below). If one or more firms were found to match the search parameters, the second message is displayed along with a number representing how many matches occurred. If terminal display is requested, the following information elements appear on the screen:

1. Name of firm 2. Street address 3. City zip code 4. Telephone number 5. Telex code 6. Name of export sales contact 7. List of SIC codes of exported products 8. List of SIC codes of imported products

Each matching firm is listed separately on the display screen. In addition, the following message is displayed.

TO CONTINUE, DEPRESS CARRIAGE RETURN If you wish to stop printing on your terminal, type END and then depress the CARRIAGE RETURN.

6 BRUCE E. HERRING

Thus, the user has control over how many are actually listed and the ability to check the accuracy of the search effort. Once the screen listing sequence is either completed or aborted, the system displays the following message:

TO RECEIVE A HARD COPY OF THE SEARCH RESULTS TYPE YES, ELSE TYPE NO

If the response is yes, a complete copy of the information which was available for screen display is transmitted to the line printer. After this step has been executed (approximately three seconds) or bypassed, the following message is displayed:

ADDRESS LABELS may be obtained for the firms just found. If you wish to receive ADDRESS LABELS type YES, else type NO.

ff the user wishes labels, the results of the search step are reformatted and reduced to the following four lines for each firm:

1. Export sales contact 2. Name of firm 3. Street address 4. City, State, Zip Code

and transmitted to a holding file for later printing on continuous form label material. After each of the preceding output possibilities have been offered and then accepted or rejected, the final question is asked. It is:

You may continue your interaction with the International Trade Search procedures or end them. To continue, type YES else to discontinue, type END.

If YES is the response, the entire procedure is restarted with a listing of the search options.

At this writing the search procedure has been operational for a little over six months and is in the middle of the second data base update. User reaction has been very enthusiastic. Foreign visitors exposed to its operation have been highly impressed with its ease of use, wealth of information, and with the trade development desire dem- onstrated by the creation of such a system.

C O N C L U S I O N S

While information flow will not create sales, it will most certainly stimulate and create the opportunity for trade by letting potential partners know of the existence of the other. Governmentally received inquiry for certain goods or services can be readily transmitted to potential suppliers.

Exports offer a company a way to make money and create jobs, allowing growth beyond its current domestic constraints. By developing an international sales territory, a company can lengthen its production runs and realize important economies of scale. When production can be increased, a bigger profit can be gained in the output and this additional business can be handled by the same equipment, personnel or capital in- vestment without affecting the domestic business. Then, too, unused machinery, jigs, molds, patterns, etc., can be more economically utilized. An exporting company has another advantage: during recessions in this country, export markets often will take up some of the slack, cushioning the shock of lower U.S. sales.

The economic as well as political implications of international trade are more relevant today than ever to the average U.S. citizen. Note the recent debate of the AWAC sale to Saudi Arabia. Because the decision was in favor of the sale, Boeing created or retained 1500 jobs for the manufacture of the airplanes for that one transaction alone. When the indirect factors are added in, the impact of this one sale becomes quite significant. Secondary factors include the provision of investment goods to the directly- impacted business, the participation in financing these businesses, the purchase of input materials, the provision of goods and services to employees of these businesses. Thus,

Alabama's international trade information system

the effect of one export sale is multiplied by the impact it has both on those directly as well as indirectly associated with the transaction.

Faster export growth is important to reducing the U.S. trade deficit and to improved productivity and price stability. Exports are important to all the 50 states, and each state plays a significant role in meeting the need to export more. In 1980, Alabama exported manufactured goods amounting to $3.9 million, or 11% of the estimated Gross State Product. More importantly, exports accounted for 40,000 jobs in the state. By becoming more competitive members of the international business community, Ala- bama firms will enjoy the benefits of growth and revitalization that come with increased trade as well as results that show in the bottom line. All is enhanced by the lubrication provided by information flow.