Studying for Economic Development

How can study abroad experiences boost economic development?

December 8, 2003

How can study abroad experiences boost economic development?

Exports are a major source of future growth in jobs and wealth in the United States, as well as in other regions of the world. Exporting is a natural step in the evolution of growth-oriented companies.

Why then haven't more businesses taken advantage of export opportunities?

While there are many barriers to exporting, one of the biggest is fear and inexperience. Exporting is indeed more risky, and firms need a better framework for assessing that risk.

Mid-size and smaller firms often face a steep learning curve, and fear of the big unknown.

One of the most effective ways to reduce that fear — and increase knowledge — is to look at the future employees of companies: today's students.

If students get an immersion experience overseas, they will be able to put their concerns in perspective and create a framework for future learning about the world.

But even in this regard, there are big question marks. If teachers themselves are ignorant of the ways of the world, how can they possibly prepare their students for the future?

In order to take this challenge seriously, teacher colleges would need to make study abroad a required component of teacher education and certification.

Why does this matter in a broader context? The future of U.S. exporting clearly is in services and high technology products.

These areas represent America's comparative advantage. But these are not commodities. Buyers can't kick the tires on these exports. Instead, exporting services and high-tech products is a trust-based, high-contact sport.

Firms competing in this area are, in essence, selling a concept or a half-finished product. Deals can only be completed through close cooperation with the customer.

This requires the ability to build up deep relationships, which in turn requires informal socializing that often takes place in the home of the customer — and in the language of the customer.

But the importance of learning from other countries extends even further.

Everybody is now realizing that innovation is really the only way to raise productivity — and, hence, the standard of living of any nation. Innovation arises when one looks at products or concepts with new information or a fresh perspective.

In that sense, if the future company employees benefit from studying abroad, it thus contributes to innovation by increasing diversity — and the ability to absorb meaning from a new situation.

This may sound abstract, but examples abound. Consider a small, family-owned manufacturer from rural Georgia who was losing U.S. customers — and was forced to look to export markets to stay in business.

In the process, while developing a presence in Australia, the company toyed around with Eucalyptus trees — and discovered that its fibers could solve an industry-wide problem with clogging in wood chipping equipment.

New experience, new product line. In any knowledge-driven economy, workforce development is economic development.

And immigrants matter a lot in this regard. The interior regions of the American South had very little experience with immigrants until about 1995.

Although the raw numbers remain small compared to big-draw states like California, the rate of growth in immigrant communities is fastest in many parts of the South.

This potentially puts the South at high risk of culture clashes that can thwart workforce and economic development, not to mention civic peace.

A personal experience overseas can go far in creating cultural understanding and civic harmony. In one particularly interesting case, in Chatham County, North Carolina, an overseas visit prevented ethnic violence.

It also nipped in the bud an anti-immigrant movement based on pitting rural communities against the new arrivals. In this case, Mexican workers had come to the rural county en masse to take jobs in the poultry processing industry.

These used to be jobs that no one else wanted during the worker shortage days of the mid- to late-1990s.

Yet, many native-born residents had the impression that the Mexicans were stealing their jobs, perhaps reinforced by the pressure on the schools to educate their children.

In one elementary school, some 50% of the students were foreign-born.

The chairman of the Board of County Commissioners wrote a letter to the INS, asking it to "take the illegals away."

Tensions were high, especially when David Duke, the former leader of the Ku Klux Klan, announced he was choosing the community for a rally to launch his anti-immigrant campaign.

Fortunately, at this point the University of North Carolina stepped in with a special program it has that takes delegations of local leaders to foreign countries to better understand their immigrant constituency.

The local leaders from Chatham County spent a week in Mexico learning about its history and culture — and even visited the "sending villages" where the young men were born.

The effect was dramatic. The Chatham County leaders, led by the very person who wrote the letter to the INS, returned home in time to dissuade most people from attending David Duke's rally.

It worked. Today, the native-born and Hispanic community are working on a much more congenial basis to resolve issues.

Ultimately, we must resolve this paradox: Our economic well-being depends on increased global engagement — yet increased contact and openness would appear to make us more vulnerable.

Study abroad is a way to address both sides. For the future of the United States, it is an essential tool for increasing both economic and homeland security.

Adapted from remarks Ms. Conway gave at the release of the report of NAFSA’s Strategic Task Force on Education Abroad on November 18, 2003. For the full report, please click here.