AFTERWORD Georgia’s deepwater ports and inland barge terminals support more than 439,000 jobs throughout the state annually and contribute $25 billion in income, $106 billion in revenue and $2.9 billion in state and local taxes to Georgia’s economy. The Port of Savannah handled 8.5 percent of U.S. containerized cargo volume and 10 percent of all U.S. containerized exports in FY2017. (Georgia Ports Authority/Stephen B. Morton) Georgia’s ports help establish state as economic powerhouse, logistics hub Since colonial times, importing and exporting has been a pillar of Georgia’s economy. Today, trade-based economic development is vital to Georgia’s current prosperity as well as future growth. In 2017, Georgia’s total trade exceeded $128 billion, including $91 billion in imports and $37 billion in exports, which supports hundreds of thousands of jobs — especially in manufacturing, logistics, distribution, warehousing, and agriculture. Georgia’s role as a major transportation, distribution Commentary by Dr. Jeffrey M. Humphreys, Director of the Selig Center and Director of Economic Forecasting, Terry College of Business, University of Georgia and logistics center reflects high levels of both importing and exporting. Georgia’s deepwater ports support more than 439,000 jobs, which equals 9 percent of Georgia’s total employment, or one job out of every 11. China, Germany, Mexico, Korea, Japan, Canada, United Kingdom, France, India and Thailand are Georgia’s top 10 imports markets. Canada, Mexico, China, Germany, Singapore, Japan, United Kingdom, India, Netherlands and South Korea are Georgia’s top 10 export markets. Germany, India, and the Netherlands are the sweet spots — top export markets with fast- paced growth. Georgia’s main exports range from advanced manufacturing (e.g., aerospace products and medical devices), to agricultural products (e.g., poultry), to mineral products (e.g., kaolin), and to basic consumer and industrial products (e.g., paper). Although the trade volumes and the large numbers of jobs they support are compelling, they greatly understate the benefits of trade-based economic development to Georgia. For example, exporting helps to stabilize Georgia’s economic base, which lowers the economic risks of living and doing business in Georgia. Exporting allows businesses to balance sales and growth across many markets, which often are at different stages of the business cycle and typically have very different prospects for long-term growth. The diversification achieved via exporting makes Georgia less dependent on the U.S. market and increases opportunities to tap into economic growth that occurs outside the U.S. Exporting also helps businesses put excess capacity to work, which boosts production, creates jobs, lowers unit costs, raises revenues and enlarges profits. In addition, tapping into export markets can provide the critical mass necessary to support businesses that otherwise would not exist in Georgia. Indeed, the broadening of the economic base achieved by exporting makes Georgia more attractive to a wider range of domestic businesses and industries, creating a virtuous cycle of economic growth and development. There are seasons to business, and trade allows households and businesses to benefit from predictable shifts in supply and demand. For example, as fresh fruit and vegetable production ebbs in the Northern Hemisphere, it is on the increase in the Southern Hemisphere. Similarly, as sales of beachwear slow in the Northern Hemisphere, they are on the increase in the Southern Hemisphere. Importing allows households to even out consumption over the course of the year. Similarly, exporting allows businesses to even out production over the course of the year. Exporting also can extend the life cycle of products that are tiring or becoming obsolete in the U.S. market. Lastly, trade improves Georgia’s innovation ecosystem by exposing Georgia’s businesses to new ideas, new trends, new technologies and new competitors. International markets are intensely competitive, which pushes Georgia’s importers and exporters to become more innovative, more efficient, and more focused on product quality. These improvements not only lead to greater success in international markets, but also lead to more success in the U.S. market. Trade enhances the prospects for innovation-based manufacturing job growth in many areas of the state. For example, exporters often focus intently on research and development, which augers well for future growth. Trade should increase the productivity of Georgia’s workforce, which, in turn will lead to higher incomes and living standards. 75
