Florida’s Outward Focus
SUNSHINE STATE SHIPPERS ENJOY A FANTASTIC BUSINESS CLIMATE AND INTERNATIONAL EMPHASIS
The experience of Airon Corporation is emblematic of many smaller manufacturers in Florida. The company was incorporated in 1997 after acquiring the rights to technology developed at the University of Florida, technology which it then used in a line of life-support respirators that the United States Food and Drug Administration approved in 2003.
In 2007, the company began exporting. These days, Airon exports to 28 countries and half of its revenues derive from overseas sales. “Our biggest export markets are in the Middle East and Southeast Asia,” says Eric Gjerde, the company’s CEO, “but we have sold units on every continent.”
The company’s success is testimony to several conditions present in the Florida business environment: an emphasis on technology, a skilled workforce required for advanced manufacturing, and the infrastructure required for successful exporting.
“Florida is a large export-oriented economy,” says Rick Weddle, CEO of the Metro Orlando Economic Development Commission. “The manufacturing sector is robust and is positioned for growth, especially in the area of advanced manufacturing.”
“We understand the value of international business for our economy,” says Alvin Brown, the mayor of Jacksonville. “Increasing exports is essential to economic growth and creating new jobs. International business accounts for 18 percent of Florida’s economy and Florida companies account for 20 percent of all U.S. exports. We seek to grow exports significantly for the next five years.”
The exporting logistics infrastructure available in Florida is world class. The ports of Jacksonville and Miami on the Atlantic coast and Port Tampa Bay on the Gulf coast are among the largest ports in the country. Numerous other ports dot both coasts, including Port Canaveral and Port Everglades. The ports enjoy good road connectivity and rail lines such as Florida East Coast Railway.
Florida’s best international airports also hosting international business, perhaps in unexpected ways, by facilitating visits from customers as well as travel by Florida-based employees. The fact that Florida is a major tourism destination doesn’t hurt.
Germfree Laboratories, a manufacturer of hospital pharmacy and industrial safety equipment located in Ormond Beach in the greater Daytona area, has customers visit their facility at least twice to sign off on manufacturing plans before they build and ship their products. “We are building complex lab facilities so we need to sit down with them to review architectural and engineering plans,” says Keith Landy, the company’s CEO. “There is a willingness for customers to come and visit us because we are in Florida where they can take in NASCAR races in Daytona or the attractions in nearby Orlando in the same trip. This has proven to be beneficial to us. In fact, it is unique.”
The tourist traffic through Orlando—and the numerous airlines that it attracts—has its benefits for business travel as well. “One of the things that drew us to Florida was the ease of travel,” says Bob Provitola, general manager at Mitsubishi Hitachi Power Systems Americas, which has a factory in Orlando and a headquarters in Lake Mary. “We travel a lot and we can get to many locations with just one flight. That has saved us a lot of time and money.”
The government of Florida has introduced a broad portfolio of tax and other incentives designed to draw manufacturers to the Sunshine State. (See sidebar.) “The state has a well-rounded pool of incentives to attract business to Florida,” says Provitola. “The governor himself is involved in some of the bigger deals.”
When Hudson Technologies, a maker of metal enclosures, relocated from New Jersey to Ormond Beach in the 1990s, the state government provided incentives for the acquisition of land as well as aid for moving personnel and equipment south. “The incentives came in the form of tax rebates,” says Mark Andrews, the company’s former CEO and now chairman of the Volusia Manufacturers Association. “This dramatically reduced our costs of relocation.” Around half of Hudson’s sales are shipped to export markets in Ireland, China, the Middle East, Mexico and Canada.
The government earns praise for organizing and promoting export trade missions which have proven indispensable, especially for smaller manufacturers. “Trade missions are a tremendous asset for smaller manufacturers,” says Provitola. “The governor often travels with these groups and this has allowed these companies to benefit from high-level meetings in other countries.”
“We always bring businesses with us and we try to make matchmaking appointments when we travel overseas,” says Stuart Rogel, CEO of Tampa Bay Partnership, an eight-county economic development organization. “We also work with American chambers of commerce in each country as a source of networking and business leads for our companies.”
Correct Craft, the Orlando-based manufacturer of Nautique boats, has attended several international trade shows with the support of the state. “We have international boat show support from the state which is very helpful as we promote our products around the world,” says Bill Yeargin, the company’s CEO. “We have attended several times and we are getting ready to again soon in Spain. We have a government that feels supportive and agencies that are helping us promote our product around the world.” About one-third of Correct Craft’s products are shipped to export markets.
“The state has been great at putting together trade delegations and we have used them since early on to get into trade shows,” says Landy of Germfree.
His company has also made good use of economic development assistance in Volusia County since moving there from Miami in 2001. “It’s easier to take advantage of these types of resources in a smaller community,” says Landy. “The local economic development people were instrumental in introducing us to Export-Import Bank programs, in helping us attend international trade shows, and introducing us to commercial attachés in U.S. embassies overseas who have helped us in international markets.” Since 2001, the proportion of Germfree’s sales attributable to exporting has skyrocketed from 5 percent to 60 percent.
Advanced manufacturers that have located in Florida have found an ample pool of skilled labor to man their facilities. Central Florida has benefited from the national space center located there and the engineers and other high-tech types that it has attracted. “We think of ourselves as an engineering company that does advanced manufacturing,” says Provitola. “Incentives got us interested. We came here because of the workforce.”
“The labor market here is great,” says Airon’s Gjerde. “We don’t have a problem finding good people and they stick around here for a while.”
Florida’s sunny climate and good quality of life also attract good people, notes Landy. “But for the future, the public education system required more attention,” he says. “When the economy went bad, education budgets were slashed. Our region would attract even more business if public education was in better shape.”
“Advanced manufacturing requires working with very high-cost and highly technical machines,” adds Provitola. “Developing a strong labor pool requires a better commitment from state and local governments to middle schools and high schools. Students and, more importantly, parents need to be informed that there are great careers to be had in manufacturing.”
Some Florida businesses could also use a lesson in exporting, according to Jacksonville’s Mayor Brown. The city was recently selected to participate in the Brookings/JPMorgan Chase Global Cities Initiative.
“This will allow us to strengthen our competitive position globally by developing a regional export plan and a foreign investment strategy,” says Brown. “Our Global Cities team conducted a comprehensive market assessment and found that many companies were unaware of the services and programs available to help them enter export markets. These companies have the potential to export, but they need to know it’s within their reach.”
State of Emergence