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Greg Wolf is a seasoned veteran of Alaska's international trade business. Since 2002, he has served as the executive director of World Trade Center Alaska. He came to this post following nearly five years as the director of the State Division of International Trade and Market Development. Prior to becoming the state's trade director, he was vice president and director of overseas projects for the Anchorage Economic Development Corp. Before joining AEDC, he served as the State of Alaska's trade representative in Tokyo.
He received a bachelor's degree in business administration from Antioch College in Ohio. He also spent two years at the University of Colorado in Boulder and one year at the American College in Paris. In addition, he attended the Osaka University of Foreign Studies in Japan, where he completed a six-month-long Japanese language immersion program. He also spent a year in Tokyo studying the management and marketing practices of American companies doing business in Japan.
A lifelong Alaskan, born and raised in Anchorage, he has spent most of his adult career involved with promoting and assisting Alaska's business interests in the Pacific Rim and in other overseas markets. He is an active member in a number of civic groups, including the Alaska World Affairs Council, the Japan-America Society of Alaska and the Royal Asiatic Society in Hong Kong.
ABM: How has trade from Alaska changed over the years and what new trends are we seeing?
Wolf: Let me start by saying that exports from Alaska have steadily grown in value as the current global boom in commodities has driven prices for natural resources to all-time record or multi-year record levels. For the past several years in particular, Alaska has been in something of a "sweet spot" where prices for some of our minerals and metals, for example, have more than doubled. Zinc and gold are great examples. Most of the new incremental demand for commodities and other natural resources is being driven by the dramatic economic growth and modernization of countries like China and India. Alaska's rapidly growing trade with China reflects the economic acceleration occurring in that country. But it is important to note that whether or not Alaska exports directly to these countries, we still benefit as their demand serves to push prices higher globally. Alaska is fortunate to be in the right place, at the right time, with the natural resources the world requires for growth.
There are two trends I'd like to mention. First, we are seeing Alaska goods now being shipped to more different countries than ever. At one time, most of Alaska's Top 10 export markets were located in the Pacific Rim, primarily in Asia. And while these markets still make up the lion's share of the state's exports, about 70 percent in value, you now find a number of European countries among our top trading partners. Notable examples are Germany and Spain. So, geographic diversification of our markets is one important trend.
Another trend is the growth of service-sector exports from Alaska. By this I mean technical and professional services like oil and gas field support, engineering, construction, architecture, project management and logistics. Alaska firms have developed world-class expertise in these areas and now are finding customers overseas. It is difficult to quantify the value of these exports since there is not the same reporting and recording of statistics for service exports as there are for commodity exports. That being said, we have estimated from what we have learned from anecdotal evidence: service-sector exports from Alaska currently range between $500 million to $750 million each year. However, this probably understates the actual total.
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ABM: Who are our largest trading partners, and what are the top exports?
Wolf: Our current top three trading partners are Asian countries: Japan, South Korea and China. I've been in this business for nearly 20 years and during that time Japan and Korea have been our two largest export markets. Canada, another important customer, has traditionally been the state's third-largest market but two years ago, China moved up to the third position and Canada is presently ranked fourth. The other countries in the Top 10 are Germany, Spain, Mexico, Netherlands, Switzerland, and Belgium.
Seafood has been and remains the state's top export commodity. Last year, seafood accounted for 50 percent of the state's total exports. Minerals, primarily zinc and lead, are the second-largest export. Energy, in the form of liquid natural gas and coal, is the third-largest export followed by fertilizers and forest products. Clearly, Alaska is a natural resource exporting state.
ABM: How much are Alaska's exports worth and what does it mean to the economy?
Wolf: Last year, Alaska's exports reached an all-time record high of $4 billion. This represents approximately 10 percent of Alaska's Gross Domestic Product (GDP). The State GDP is the sum of all goods and services produced in a state in a given year. Exports revenues represent new money coming into our economy and they support thousands of jobs across the state. In fact, many of the highest-paying jobs in the state are tied directly or indirectly to export activities. Think, for example, of the jobs associated with the LNG exports or fertilizers, minerals and seafood. These are relatively high-paying jobs that exist due exclusively or largely to the export operations of the companies involved. Export operations have resulted in sizable investment in our state, too.
ABM: What would happen to Alaska if we didn't have a healthy trade market?
Wolf: Well, we would certainly have a smaller economic base and some of the biggest players would not be active in Alaska. We must remember that Alaska itself is a very small market. Our population is around 700,000. That's like a suburb of a lot of major cities around the world. To attract resource industries to our state, export markets are a necessity. Exports enable some of our major industries to be as large and significant as they are today. In some cases, virtually 100 percent of the output generated by these companies is exported to customers overseas. In other words, but not for the existence of overseas markets, these companies would either not be in Alaska or their operations would be considerably smaller. So far, the only natural gas to leave Alaska has been the LNG exports to Japan that started in 1969. The only coal to leave the state has been the exports to Korea and Chile. Virtually all of the minerals, metals and fertilizers are exported overseas as is about 50 percent of the annual seafood catch.
I believe that exports are far more important to the overall well-being of Alaska's economy than many may recognize. It is also important to note that the companies involved in exporting from Alaska have made major investments in their business facilities and infrastructure. These investments have a sizable impact on the economies of the areas in which they are located. These companies pay salaries and wages, taxes, royalties, and they procure goods and services from local vendors.
ABM: How many companies are involved with exports from Alaska? Are they all big companies?
Wolf: We just received the latest figures from the U.S. Department of Commerce. This is the agency that records and reports most of the statistics we use for keeping track of the state's international economy. According to the most recent figures, and these are for 2005, they report that there were just more than 300 companies in Alaska involved with export operations. It may surprise some of the readers to know that 77 percent of the companies doing trade in Alaska are considered to be small or medium-sized firms by the Commerce Department. They consider a company with fewer than 500 employees to be medium-sized and less than 100 to be small. However, while in sheer numbers most of the companies are not large, in terms of dollar value more than 80 percent of the exports from our state are produced by what the department considers large companies, having 500 or more employees. I believe that, over time, an increasing number of small and medium-sized companies in Alaska will become involved with exporting. The whole globalization mega-trend, facilitated by advances in telecommunications and transportation, is opening doors for companies of all sizes to sell their goods and services overseas.
ABM: What is the role of World Trade Center Alaska? How do you help companies and promote trade?
Wolf: One of our key roles is serving as a bridge between Alaska sellers and overseas buyers. This is the matchmaking role to help Alaskans find customer overseas. But there is typically a lot of other important work that must take place before we get to that point with a company. We normally work with firms that are export ready, meaning they already have a product or service to export and have the capacity to adequately respond to customer orders. We help these companies to research potential markets, to understand the distribution channels, regulations, and other market requirements that pertain to their specific business. These issues can differ substantially from one country to the next. Of course, there can be language and cultural barriers to contend with and business practices can be much different than our own. You could say that we become the extended staff for companies that might otherwise not have the resources to seek out foreign markets. Most of the companies we work with are small and the owners are busily focused on their day-to-day business operations. Through trade leads, trade missions, conferences, research reports and one-on-one counseling, we work to expand Alaska's export capacity.
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