The first time I traveled outside the US was to Ireland in 2000. At the time, Ireland was still on their own currency and overall it was reasonably affordable for an American to buy a pint or two of Guinness. Over the years, I noticed the cost of my trips to Ireland and then to other places on the map continued to increase, but it wasn't anything overwhelming. This year, as I've seen my international travel grow I have also seen the cost of that travel increase significantly. Unfortunately, it isn't because I'm staying in nicer hotels or drinking better wine (maybe a little bit better) - rather its been a change in the US & world attitude towards the dollar - its value is weakening.
There has been much hand wringing over this precipitous drop of the dollar against most major currencies. As a write this morning from Belgium the Euro has hit its all time high ($1.42) against the dollar. I don't have the ability or interest in preaching about the pros/cons of currency policy as I only understand currency impacts on their most basic level. When I'm home, imported goods are cheaper and when I'm overseas everything is more expensive - including Guinness!
However, what does intrigue me and what I am beginning to devote some time to is understanding what opportunities can be derived from a weak dollar.I know it sounds contrarian to find an opportunity in weakness, but I am of the opinion that the weak dollar has the potential to be a positive change that can lead to a favorable outcome. Like most others I claim that I have read most of Thomas Friedman's modern day challenge to War & Peace, i.e. "The World is Flat " regarding the globalization of commerce and virtually everything else. As anyone who has attempted to complete the book will tell you - its long. However, six months after reading it, I still think about it often and quote its concepts to my customers - there must be something to it. The basic message I derived from Friedman and where I see the business opportunity for the American entrepreneur is the basic tenet that competition is no longer the guy down the street or in the next state. It's just as likely coming from the individual or company from the other side of the world. If you believe Friedman you'll concur that those companies and individuals who grasp this concept and embrace it will thrive - everyone else will be left behind.
For many people this is a very disheartening realization. After all, we've all been inundated by the Cassandra's in the press overreacting to outsourcing (another topic to be covered later) of good American jobs (especially white collar jobs) to all these third world nations where the hourly wage doesn't buy a Jr. Whopper. But, what if the game changed and we as Americans had an opportunity to gain a pricing advantage because of the weakness of our currency? What if the goods that we still make here or our individual knowledge/skills suddenly were cheaper and more abundant than those available in Europe? Would we begin to look at outsourcing differently than we do today?
Consider the case of Magic Dave. Not too long ago, Dave was voted England's Children Entertainer of the Year - a very talented magician. Dave is a good friend of a very good friend so I've been blessed to have someone in the UK to call when I'm there. The last time I was in London I spoke to Dave and was complaining about the price of everything- after all a 2:1 ratio is not a good exchange rate; I couldn't afford the Jr. Whopper! It was during that conversation when Dave told me he was buying a lot of his magic props from the United States because the currency differences made it more economical to do so. Imagine - it was cheaper to buy and ship equipment from the US than to walk down the street to the local vendor in the UK!
At the time of my conversation the impact of this didn't register, but it did today when I spent $7 for a bottle of water. Then it occurred to me - what happens when you have the goods/services/talent to sell, the technology to do so efficiently/effectively and seamlessly regardless of location and a currency rate that is favorable enough to overcome the logistic costs of providing those goods & services in other parts of the world? It appears that we have this situation today and to me that means an opportunity to take advantage of potentially exists. After all, if Dave is a typical small business owner in England (sans the magic duck & wand) who has found it more economical and practical to buy the materials he needs for his business over the internet from a US company rather than the magic shop down the street, I've got to assume that the opportunity exists for others to do the same. Dave could be your customer if you went looking for him.
This post has been a bit long, but what I want to get across to everyone - especially those who think their opportunity in their local markets is limited is that there is significant potential to grow your business if you are willing to expand your world view. Even if you live in a one stop-light town, understanding that your market is global will allow you to conduct business anywhere. Clearly the opportunity will vary for every company, but whether you are a graphic artist or a manufacturer, there is a good chance that somewhere in Europe there is a Magic Dave wanting to buy what you sell!
Its scary, but if we open our eyes, we may find that a flat world is a very exciting place for those of us who are prepared to embrace it. Its a brave new world - are you ready to up for it?
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As an FYI - those of you in Massachusetts may want to check out the Massachusetts Export Center at Holyoke Community College. Its a great resource for getting started in exporting.
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