Globalization trickles down to small firms
A few years ago, I co-authored a book about building a successful small business. It was called “Battling Big Box,” and it appeared just in time to catch the destruction of several hundred thousand small businesses in the U.S.
However, I learned recently that “Battling Big Box” is going to have a second life in China, where a new publisher has purchased the Chinese language rights.
That news came as no surprise to Richard Yorke, executive vice president and head of Wells Fargo’s International Group. I caught up with him by phone on Oct. 11, shortly before a presentation to clients at the Ojai Valley Inn & Spa. Yorke thinks that international opportunities for U.S. entrepreneurs are going to blossom as globalization accelerates and as China, India, Brazil and others grow their middle classes.
“The globalization story increasingly is filtering down to medium and smaller businesses,” he said, adding that smaller companies typically need help from financial institutions when it comes to managing risk. That means making sure products are of high quality and are shipped in a timely way, that distributors are treating you fair and square and, most of all, that you are getting paid on time.
For the Central Coast, Yorke sees agricultural exports and travel and tourism as big plusses, along with other specialized industries, including medical devices.
When it comes to agriculture, higher incomes quickly translate into improved diets, Yorke said. Across emerging markets, “rising living standards” turn into increased demand for fruits, vegetables and even California wines.
Infrastructure spending, including the vastly improved roads to China’s interior, will also help open new markets for consumer goods and medical devices, added Yorke, a former President of HBC’s China bank who was named an “honorary citizen” of Shanghai in 2009.
He said much of the funding to open up the interior came about as China embarked on its own version of economic stimulus spending.
When it comes to tourism, the Internet is a big driver, and California is a favorite for Asian travelers. First-time visitors will want what Yorke calls “headline destinations,” and you can put Santa Barbara at or near the top. But returning visitors will want to see places others haven’t visited, and that could put Paso Robles wine country and the rest of the Central Coast in play.
For Santa Maria and Lompoc, that could mean playing up both their new status in the wine country but also not forgetting its farming and ranching roots. Spotting a real cowboy at the Santa Maria Elks Rodeo or chowing down on tri-tip at the Far Western Tavern could become the hot thing to tell your grandkids about when you get back to Beijing.
For other businesses in the region, the rising demographic tide in China also will be key. Medical device makers will see new opportunities as people get wealthier. So will global brands such as Ugg, owned by Goleta-based Deckers Outdoor.
Whether you are a small manufacturer looking to export or a small hotel trying to reach emerging-market customers, the key is risk management.
You need to market effectively, target customers in specific areas and make sure you get paid. But Yorke is convinced international is going to be the growth path for many small companies. “This trend will continue,” he said.
Suddenly, I can see a book tour in my future. And maybe a detour to the Great Wall.
New face in newsroom
I’d like to take a few words to introduce the latest member of the Business Times news team. Health Care and Hospitality Editor Dana Olsen joined us in early October from New York where she had been working for American Lawyer Media.
She is a UC Santa Barbara graduate — thank you, Henry Yang — who worked on the Daily Nexus before attending law school at Loyola Marymount.
She’s excited about returning to our region, and she’s already hit the ground running. Dana is uniquely qualified to expand our coverage to new beats and lend her legal expertise to deepen our reservoir of reporting skills. In addition to the travel/tourism and health-care beats, she’ll be covering agribusiness and higher education.
Please give her a warm Central Coast welcome.
• Contact Editor Henry Dubroff at firstname.lastname@example.org.