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Intangible trade: Arkansas companies export $700 million in services.

Intangible Trade

Arkansas Companies Export $700 Million In Services

When people talk of exporting, it's usually with a picture in their minds of crates of goods being loaded on a barge or airplane. We would be remiss if we did not point out in this series of articles the growing number of U.S. and Arkansas companies exporting intangible services.

Trade in services constitutes 20 to 25 percent of world trade today, according to the U.S. Department of Commerce. Closer to home, Arkansas companies exported over $700 million worth of their services last year. That is not 20 percent of the state's $5 billion-plus export total, but the figure is growing.

While the world market for merchandise trade grows at an annual rate of about 7 percent, the world market for services is growing at about 16 percent annually. Typical service exports include construction, engineering, accounting, teaching, and computer and data services.

Arkansas Power & Light, for example, is one of Arkansas' biggest exporters, says Dave Eldridge of AP&L's Teamwork Arkansas. They are not selling goods, but rather, technical expertise. The company is currently under contract to train power plant personnel in Indonesia and is negotiating to do the same thing in Brazil.

Another local example of service exports includes Systematics, which has placed its banking software in such diverse countries as Singapore, the Phillipines, Indonesia and Cyprus. Systematics has been exporting its services for four years now.

Overseas contracts account for about 5 percent of the company's business, says spokesman Mike Morache. Systematics had sales of $224 million in calendar 1989. The company now has support and sales offices in the United Kingdom, Singapore, and Oslo, Norway.

United Conveyor of Bryant proves that smaller firms can work successfully across the border as well. The company, with about 40 employees, is currently doing work in Canada. It is designing and installing an overhead conveyor system in a Hayes-Dana plant that supplies truck frames to Ford Motor Company.

Help Available

Just as help is available for companies interested in exporting goods, help is also available for those interested in exporting services. Many of the resources are the same, but there are some specifically targeted to help the service sector. Be sure to check with the following:

Office of Service Industries -- Analyzes and promotes service trade. Provides information on opportunities and operations of services abroad. Phone: (202) 377-3575. Worldwide Services Program (WSP) -- Provides exposure for service firms in the magazine Commercial News USA. The service for sale is described and contact information given. For more information or an application, call the district office of the US & FCS. Phone: 324-5794. The Export-Import Bank (Eximbank) of the U.S. -- Recently introduced a new program to assist design, engineering and architectural firms with foreign contacts. Contact the Bank's Engineering Division. Phone: (202) 566-8802.

PHOTO : SINGAPORE SIGNS ON: United Overseas Bank in Singapore contracted with Systematics in 1989 for financial software services, adding to the 16 percent annual growth in service exports.
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Publication:Arkansas Business
Date:Dec 31, 1990
Previous Article:Export opportunities, resources better than ever.
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