Most Important Results
Strategic Goal 1

Provide the information and tools to maximize U.S. competitiveness and enable economic growth for American industries, workers, and consumers

Most Important Results

In FY 2007, the Department met 92 percent of the targets it had set for the year. Some of the significant accomplishments and impacts that the Department had on the U.S. public include the following:

Through programs within the Economic Development Administration (EDA), the Department generated by FY 2006 approximately $2.3 billion in private investment and 50,000 jobs as a result of approximately $300 million in investments made in FY 1997, a 7 to 1 benefit-to-cost ratio, and a cost of $6,000 per job. EDA data indicate that investments made in FY 2004, FY 2001, and FY 1998 (three, six, and nine years prior to FY 2007) generated $4.9 billion in private investment and created or retained 139,641 jobs. EDA anticipates that investments of approximately $200 million made in FY 2007 will recoup the original amount by 2010, generating $258 million, and then continue to increase to $646 million by FY 2013, and $1,293 million by FY 2016. EDA expects that those same investments will create or retain 6,628 jobs by 2010, 16,570 jobs by FY 2013, and 33,141 jobs by FY 2016.

Likewise, an investment of $30 million in the area of minority development generated $1.1 billion in terms of the dollar value of contract awards and $500 million in financial awards as well as created approximately 4,000 new job opportunities.

The Department played a leading role in the expansion of U.S. trade, including efforts to strengthen trade promotion by leveraging strategic partnerships, advancing free trade agreements (FTA) to promote U.S. exports in strategic and emerging markets, and advancing transformational commercial diplomacy. These priorities reinforce the Department’s desire to broaden and deepen the export base.

The Department through the International Trade Administration (ITA) began to engage with strategic partners (e.g., express delivery companies, banks, and Web-based marketplaces) in targeted marketing strategies to assist other U.S. companies wanting to export more or export better. For example, FedEx is helping identify and inform U.S. exporters to Mexico of opportunities about new business opportunities in Central America, which has come about as a result of the recent Central American FTA (CAFTA).

ITA, along with other trade policy agencies, has continued to lower trade barriers through FTAs during FY 2007. Since 2001, the United States has signed over a dozen FTAs and has also sought to improve already existing FTAs, such as the North American FTA (NAFTA). Although countries that the United States has FTAs with only represent 7.1 percent of world GDP, they represent more than 42 percent of U.S. trade. ITA has also maintained a concerted effort to open up large, developing markets like China and India. Exports to both of these markets are significant. During this past year, China has become the third largest export market for the United States and exports to India grew at more than 30 percent last year. These two countries have been designated as high priority markets and ITA led significant trade missions to both countries during this past year.

Often companies encounter difficult hurdles when trying to do business in even far less challenging places than India and China. In the past, the efforts of ITA’s Commercial Service have been measured primarily by “export successes” tied to specific export transactions of client companies. More importantly, overseas posts also devote time and resources to working behind the scenes to resolve problems, reduce trade barriers, and cut red tape, i.e., “commercial diplomacy.” Commercial diplomacy benefits not only current ITA clients, but also all U.S. exporters by opening doors and creating paths to success for other exporters to follow. For example, in Bulgaria, ITA’s Commercial Service succeeded in having a packaging waste penalty removed that was costing U.S. companies like Coca-Cola, Kraft, and Proctor & Gamble millions of dollars per year. Similar efforts helped to get Bulgarian legislation passed to better protect intellectual property rights (IPR).

While the Department seeks to encourage trade, it is balanced by the need to control exports, specifically those “dual-use” exports which have both civilian and military applications. In June 2007, the Department published an export policy rule in the Federal Register that will facilitate U.S. exports to civilian enterprises in China while ensuring that sensitive U.S. technologies do not increase Chinese military capabilities. The rule achieves two important and complementary objectives: supporting U.S. companies in competing in the vast Chinese market for civilian technology while preventing the export of technologies that contribute to China’s military modernization. It creates the Validated End-User program, which lifts the burden of individual export licenses from trusted customers in China with a demonstrated record of appropriate use of licensed U.S. items.

The Department also held a meeting of the U.S.-India High Technology Cooperation Group which identified additional ways to facilitate U.S. high technology exports to India. In addition, the Department prepared to extend the benefits of the Validated End-User program to trusted customers in India.

In an effort to further streamline the dual-use export control system, the Department launched a review of the Commerce Control List of items controlled for export. In addition, the Department announced the results of a study of the sensors and imaging industry which has formed the basis for proposals to update controls of night vision items consistent with technological and market developments in the industry.

The Department has, perhaps, no greater influence over business than in the area of statistics. The Department, through the Census Bureau and the Bureau of Economic Analysis (BEA), provides vital statistical information on the economy and the demographics of the Nation. Statistics affect all aspects of public and private sectors, including the distribution of funds to various geographic districts. The Decennial Census, mandated by the Constitution, affects the political makeup of every state in the union and reflects the shifting political power among the states.

In FY 2007, the Census Bureau released more than 400 economic reports, including 124 principal economic indicators, providing information on retail and wholesale trade and selected service industries, construction activity, quantity and value of industrial output, capital expenditure information, e-commerce sales, foreign trade, and state and local government activities. In addition, during FY 2007, the Census Bureau completed critical preparations for the 2007 Economic Census data collection and processing, which began in October 2007 and will continue throughout FY 2008. Key accomplishments for FY 2007 focused on four areas: Collection Instrument Preparation, Business Outreach, Frame Preparation, and Processing System Preparation.

The Department’s BEA, a partner agency with the Census Bureau within the Economics and Statistics Administration (ESA), continued to help the world to understand the differences among the economic measures produced by the federal statistical system through its publication, The Survey of Current Business. As businesses, governments, and households are provided with better, easier-to-understand economic data, their ability to make key investment decisions that move the U.S. economy forward are significantly improved.

The Department continued to meet the demands of users for more current and timely economic statistics. In the past year, the Department accelerated the release of advance sector-level GDP by state estimates by four months and personal income for metropolitan areas by an additional month, and produced prototype GDP estimates by metropolitan area. In 2007, BEA provided more comprehensive data on foreign direct investment in the United States that show investment transactions by state, and by which industries are making the investments. New data are being collected to show a more complete picture of the services other countries are purchasing from the United States and who is buying these services. BEA now publishes economic data on financial services purchased from foreign banks every year, up from twice a decade.

With the release of the benchmarked industry economics accounts this year, BEA provided estimates that better reflect consumer spending in the economy, providing greater detail on the services that the U.S. public has been purchasing. Particular attention was paid to spending on air travel, food and beverages, and telephone and Internet services. BEA has also expanded and improved its measures of the expenses that businesses incur to generate the goods and services they produce. These enhanced estimates provide U.S. businesses with the tools they need to help guide their investment decisions and remain competitive in the economy. The release of the industry economics benchmark accounts was accelerated by three months over the previous release.

Summary of Performance Results

For Strategic Goal 1, in terms of performance, not only did the Department provide significant benefits to the U.S. public, it also met nearly all of its targets in FY 2007. EDA exceeded its targets for increasing private investment and creation of jobs for programs that were funded either in 1998, 2001, or 2004 (EDA tracks progress on a three, six and nine-year basis). These programs focused on economically distressed communities. EDA met all the targets it set for the second outcome. For its outcome, “Increase access to the marketplace and financing for minority-owned businesses,” MBDA met all of its targets. Furthermore, historically, the targets appear to be stable or aggressive.

ITA had three performance outcomes that applied to Strategic Goal 1: “Enhance U.S. competitiveness,” “Broaden and deepen the U.S. exporter base,” and “Identify and resolve unfair trade practices.” For the “Enhance U.S. competitiveness” outcome, ITA missed two of four targets, while in each of the remaining two outcomes, ITA missed only one of six targets.

For “Enhance U.S. competitiveness,” ITA missed the target for “Percent reduction in per unit of data distribution” and “Percent of industry-specific trade barrier milestones completed,” an important metric for this outcome and one that ITA missed by a wide margin (54 percent for actual, 85 percent for target). Performance slipped from 81 percent in FY 2006. It should be noted, however, that ITA did not meet this target because foreign counterparts were not able to or willing to move as fast as U.S. negotiators sought towards removing trade barriers.

For the “Broaden and deepen the U.S. exporter base” outcome, the target that ITA missed was the “Number of new-to-market export successes.” This target was a sub-element of an overall target, “Number of export successes made as a result of ITA involvement,” that ITA met. ITA missed this sub-element because ITA moved resources to meet another sub-element they felt was more critical and had not been met for several years, “Number of new-to-export successes.”

For its third outcome, “Identify and resolve unfair trade practices,” ITA met or exceeded the targets for five of six measures that address MAC cases. The lone exception was for the “Percentage of market access and compliance cases initiated on behalf of small and medium-sized businesses.” ITA is still investigating why the actual for this measure dropped from 28 percent to 22 percent. The Department believes that supporting small and medium-sized businesses is important, and ITA will reinforce its efforts to achieve and measure progress in this area.

One of the Bureau of Industry and Security’s (BIS) key tasks is to either prevent illegal exports or to charge export violators. To that end, a key performance measure for BIS is the “Number of actions that results in a deterrence or prevention of a violation and cases which result in a criminal and/or administrative charge.” BIS has consistently met its targets while raising the targets from year to year. BIS has also consistently maintained an effective export control system, a key to which is the processing of export licenses and the timely issuance of regulations regarding export activity. BIS has consistently met its targets in these areas. As noted earlier, BIS published an export policy rule involving China that will facilitate U.S. exports to civilian enterprises in China while ensuring that sensitive U.S. technologies do not increase Chinese military capabilities.

Both the Census Bureau and BEA consistently provide statistical data to the U.S. public in a timely manner. The Census Bureau rarely misses deadlines (it didn’t this year) for producing data and is currently on track to complete a re-engineered short-form only census in 2010. Likewise, for the past six years, BEA has not missed a release date for various economic data, a total of 314 scheduled releases over that period. BEA has also accurately predicted the GDP estimates over the past eight years. For a more detailed description of this measure see www.osec.doc.gov/bmi/budget/08CJB/esa.pdf. As a measure of customer satisfaction, the Census Bureau strives to meet or exceed the aggregate federal score on the American Customer Satisfaction Index (ACSI). Since 1999, the Bureau has been below the aggregate score only twice (2000 and 2001). Each year BEA conducts a customer satisfaction survey with a goal of achieving greater than a 4.0 (on a five point scale). BEA has consistently exceeded that goal, most recently achieving a 4.3.