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A U.S. Department of Commerce Ypsilanti Export Assistance Center Study
2001 Jackson County
International Economic Impact
Export Markets and Educational Institutions
Also Available as a PDF File
The Jackson County International
Economic Impact Study was complied by Jim Secreto, Intern with the Ypsilanti Export Assistance Center, with assistance from
Paul Litton, Director. This report is sponsored by the Ypsilanti Export
Assistance Center, the Center for International
Business Education at the University of Michigan,
and the Eastern Michigan University College of Business.
For more information please contact:
- U.S. Department of Commerce
- Ypsilanti Export Assistance Center
- College of Business
Eastern Michigan University
312 Owen Building
Ypsilanti MI 48197
Voice (734) 487-0259
- Fax (734) 485-2396
As Jackson County's economy increases in size and scope, so does its impact on
the global economy. While it easy to assume U.S. international business is limited to
highly developed, urban centers like New York and Los Angeles, traditional, "nuts and
bolts" economies like Jackson County's can
still impact the international marketplace. An examination of the county's industrial base illustrates its level
of international business activity.
This study attempts to gage Jackson County's current
international economic impact and predict future trends in
international business that will impact the county. The study focuses
on both exports and education via local institutions. This report
does not account for international service from the county
because of the difficulty in tracking such transactions. The study also
does not attempt to gage the impact of foreign subsidiaries or
franchises abroad.
While Jackson County firms enter into the first domestic
slowdown in the past seven years, this study foresees exports
from Jackson to continue to be closely tied to the global
expansion of the automotive industry. Local firms who are flexible,
versatile, and able to leverage past export experience across a range
of markets are likely to succeed in international marketplace.
Jackson County Overview
Located in South Central Michigan, Jackson County is
the thirteenth largest county in Michigan. As of July 2001, the
U.S. Census Bureau estimates Jackson County has a population
of 158,442, and the county's largest city, Jackson City, has a
population of 36,316. Since 1990, the county grew 5.9 percent in
size.1
As of 2000 Jackson County has an active labor force of
78,700 people with 11,974 employed in manufacturing related
positions.2 For the year 2000, the county had an unemployment
rate average of 3.0 percent _ below the state and national
average. In terms of international trade, Jackson is the ninth largest
exporting area in Michigan and 203 in the U.S. with export
value totaling over 159.7 million
dollars.3 However, these statistics do not include the value of software or services exported from
the county, and if included with the Census figures, the value
would be greater.
Out of a total of 351 manufactures in the 1997 U.S.
Economic Census, 30 percent or 102 firms are known
exporters.4 This number which is higher that the average for both Michigan and
all firm nationally, 20 and 8 percent
respectively. (see figure 1.1) Part of Michigan and Jackson County's high level of
exporting comes from the unique, pull-though effect of the large
automotive presence in the area. According to a study of
Jackson County companies by the Ypsilanti Export
Assistance Center, an average of 12 percent of a firm's revenue was
attributable to exports.
The President's "E" Award was created by executive order
in 1961 as the nation's highest award to honor American
exporters. Companies in Jackson County that have received the
award include Dawn Products, which makes donut
manufacturing equipment, and Aeroquip Engineered Systems Group,
which makes products for the commercial aerospace industry.
Export Markets and Industries
 The top Jackson County markets for export consist of the
traditional industrial manufacturing sectors, including
automotive parts, machine tools and metalworking, and general
industrial equipment. According to the Ypsilanti Export
Assistance database, machine tool and metalworking firms make
up the largest number of exporters with 33 firms, and
automotive parts manufactures come in second with 23 exporters.
General industrial equipment firms also have a fair number of
exporters, with 15 firms exporting in the county. (see figure 1.2)
Figure 1.1 Percent of firms exporting
in Jackson County.
The top export markets for Jackson County tend to
reflect countries in which U.S. automotive manufactures and
suppliers have active operations. As the automotive industry continues
to expand abroad, Jackson county exports consistently
follow automotive manufactories into new international territory.
While exports from the U.S. and Michigan go overwhelmingly
to Canada and Mexico, exports from Jackson County also find
a home in these countries because of the strong U.S.
automotive presence in Canada and Mexico. However, recent
automotive expansion into Argentina, Austria, Brazil, and China has
meant Jackson County exports increasing go to less traditional
destinations.
Argentina
Since Argentina opening and deregulation of the economy
in 1991, the result has been modernization and a concentration
of industrial plants, including significant amounts of foreign
direct investment. Although regulations and tariffs barriers make
it difficult to enter the market, companies like Ford have
been able to enter and establish themselves and a portion of the
total automotive market share. While demand for vehicles is
not expected to increase rapidly, newly considered
environmental and safety regulations may increase demand for higher
technology products and benefit U.S. manufactures due to a lack
of domestic production in Argentina.
Austria
As a member of the European Union and a country with a
high standard of living, Austria is receptive o U.S. exports.
Investment in the Austrian automotive market increased dramatically in
the 1990s, due in part to the opening of a large Chrysler
assembly plant for mini-vans and recently the PT cruiser.
Figure 1.2 Top three exporting industries
in Jackson County by number of firms.
Brazil
Brazil has been a host of U.S. export for some time, especially
in the automotive sector. Most global automotive
companies (including GM, Ford, and Chrysler) have plants in the
country, but strong local content restrictions limit U.S. exports to
the country. Still, the downturn in the Brazilian and South
American economy and an adverse effect on industrial purchasing
and demand for automobiles. However, the established presence
of manufactures suggests continued export interaction with Brazil.
China
The size and scope of China's automotive market has
attracted most global automotive manufactures to the country. While
the Asian financial crisis had an adverse effect on U.S.
exports, demand is expected to grow slowly as economic
liberalization continues.
Expected trends in exports
From 1993 to 1999, the Jackson area saw its value of
exports increase 67 percent, from roughly 95.5 million dollars per year
to 159.7 million dollars per year.5 (see figure 1.3) The
estimated employment attributable to exports is 4,562 jobs, based on
the U.S. Department of Commerce's assessment of $35,000 in
export sales supports 1 U.S. job. This increase in exports is attributed
to the general expansion of the automotive industry into
foreign markets, as well as increased understanding of
international sales. Generally, the U.S. Department of Commerce
predicts international trade will grow at a rate of seven percent by
2002, and in the long term Jackson County's international
economic impact will continue to grow.
Of the firms responding to the Jackson County
International Economic Impact Study most were moderately optimistic
about future of their firm's international sales. Firms were asked
to access how the current economic slow down impacting
their level of exporting on a scale from one to ten, with one
representing a significant decrease and ten representing and
significant increase. The average firm response was 4.7, suggesting
the current domestic economic slowdown will have little if
any expected impact on exporting. Firms were also asked to
rank their own potential for international business in the future,
with one representing a significant decrease and ten representing
a significant increase. The average firm response was 5.7,
suggesting a small trend toward increased international business
from Jackson County.
Finally, a strong U.S. dollar will continue to have a
negative impact on exports. While U.S. consumers benefit from a
strong dollar, a strong dollar means U.S. goods and services are
more expensive for foreign consumers and business that, as a
result, tend to buy fewer U.S. products. Still, an appreciation for
the quality or characteristics of U.S. good can mitigate the
negative effects of a strong dollar, and this is likely for exports from
Jackson County. While there are a limited number of statistics to
track the effect of dollar value on exports, the National Association
of Purchasing Management's New Export Orders Index
showed little to no growth in exports for the beginning of
2001.6 This index, combined with the dollar's 15-year peak in value in
2001, suggests that exporters are feeling the effects of the
strong dollar, at least in non-technology related industries.
Figure 1.3 Jackson area value of exports
from 1993 to 1999 in millions of dollars
While there is no secret to successful exporting, Jackson
County exports will continue to follow the automotive industry abroad.
In addition, as Jackson's manufacturing base continues to
diversify into non-automotive sectors, international markets will
become increasingly important.
Educational Institutions
Education as a reverse export
Although focusing solely on traditional exporters like manufacturing when
accessing Jackson County's international economic impact is the norm,
educational institutions also contribute to the
county's global influence and local economy. The U.S. Department of Commerce's
International Trade Administration ranks international education as the U.S. fifth largest service sector
export. Universities and colleges in Jackson bring in a small amount
of economic revenue through international students, which in
turn benefits business that would not normally profit from
international sales. Industries such as retail trade, real estate,
accommodation and food services, and entertainment and recreation
all profit from this unique form of exporting.
Overview of international students in Jackson County
Jackson County has two educational institutions with
international students, a private Free Methodist school, Spring
Arbor University, and one community college, Jackson
Community College. According to a survey conducted by the Ypsilanti U.S. Export Assistance center, these educational
institutions have a combined enrollment of 51 full-time
international students.7 Spring Arbor has the largest number of
international students with 36, and Jackson community College has a total
of 15 international students.
The total money spent by each international student
(including tuition and living expenses) at all educational institutions
in Jackson accounts for an estimated $903,360.
International students spend the most money to attend Spring Arbor
at $20,260 per student, for a total of $729,360. While the bulk of
that money goes directly to the educational institutions in the form
of tuition, an average of 40 percent, or a total of $361,344,
goes into the local economy.8 International students
attending educational institutions in Jackson County overwhelmingly
come from Canada. The Immigration and Nationalization
service requires each student, spouse, and family member to
have $5,000 in cash upon arrival to meet anticipated annual
costs, further adding to the local economic impact.
Significance of international
students/educational export economic impact
Figure 2.1 International Student Enrollment
in the U.S. from 1960 to 2000
The economic impact of international students is significant
in Jackson County because it connects business that would
not normal have international perspective to the global
economy. International sales can be difficult if not impossible to
small retailers and service provides. Yet, the substantial number
of international students enrolled in Jackson County
educational institutions provides an opportunity for increased
business through existing sales channels. Additionally, most money
coming from international students into the county comes
from offshore, which means the money spent was not
generated inside of Jackson County.
Expected trends in international student
enrollment/educational exporting
International student enrollment in Jackson County is
expected to remain steady and increase slowly over time. While
statistics on Jackson County are not available, international
student enrollment has increased nationwide since World War at
an average rate of 3.7 percent between 1960 and
2000.9 Surprisingly, international student enrollment appears to be immune
to either domestic or international economic crisis. The
perceived value of an education in the U.S. outweighs many
considerations international students might face at
home.10 Logically, situations like the current strong U.S. dollar would make education
in Jackson County more expensive for international students.
And although the U.S. is down to 30 percent from 40 percent of
the total international student market, the actual numbers of
students continue to increase steadily.
1 U.S. Census Bureau, Census 2000 Redistricting Data (P.L. 94-171)
2 Michigan Department of Career Development Monthly Statistics, May 2001
3 2000 Metropolitan Area Exports Study, U.S. Department of Commerce
4 Data complied from 1997 Economic Census and the Ypsilanti Export
Assistance Center
5 2000 Metropolitan Area Exports Study, U.S. Department of Commerce
6 National Association of Purchasing Management New Export Orders Index
7 All educational institutions in Jackson County were sent a survey requesting their number
of international students enrolled for the 2000-2001 academic year, average tuition student
paid, and the number of international students from each country. Admissions departments at
each institutions were then asked to estimate the total amount an international student would pay
to attend the school, including lodging, food, books, and miscellaneous expenses.
Where information was unavailable, $5,000 was estimated for lodging, $2,000 for
miscellaneous expenses, and $500 for books.
8 Estimated total to attend school minus tuition
9 "Open Doors," Institute of International Education, 2000,
http://www.opendoors.org
10 "Students Seeking Foreign Education, India," International Marketing Insight, U.S.
Foreign Commercial Service and U.S. Department of State, 2001
Date
Updated: March 20, 2007
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