26 May 2010 | By: Mohamed Hairul Borhan

The US remains an important market to consider for overseas expansion even though some might say that it is mature, competitive and has limited business opportunities, said Kathy Lai, Assistant Chief Executive for IE Singapore.

Its huge economy, the largest in the world, continues to attract global players and accounts for 42 per cent of the global consumer market. Addressing a crowd of over 70 local businessmen and entrepreneurs at the iadvisory seminar on ‘Doing Business in the US’, she said that the US remains among Singapore’s top five trading partners last year even though there was in drop in bilateral trade.

The global recession and overall drop in trade had caused bilateral trade between Singapore and the US to dip almost 29 per cent in 2009 to reach S$66.92 billion. Nonetheless, things are picking up with bilateral trade between the two countries jumping 16.6 per cent year-on-year from January to April this year to hit S$25.1 billion.

Ms Lai said, “Singapore’s foreign direct investments into the US have been on an upward trend. The latest figures which are for 2008 show that our FDI into the US increased by about 9.6 per cent from S$13.6 billion in 2007 to reach S$14.8 billion.”

Rajiv Biswas, Director for Southeast Asia for the Economist Corporate Network, said that the US is expected to post a 3.3 per cent GDP growth this year, a reversal from the -2.4 per cent recorded in 2009. He also expects the growth momentum to continue in 2011, albeit at a slower pace of 1.8 per cent year-on-year.

He added that the global recession had dampened overall trade but mentioned that the US is still the largest export market for much of Asia despite the rise of China. Going forward, he maintains that the US will remain as the world’s main growth driver.

High-potential sectors

Among the sectors which might hold the most potential for Singapore companies are the Food and Beverage; Bio-technology; Medical Technology; Furniture and Interactive Digital Media industries, said Chua Ruo Mei, a Manager for IE Singapore’s International Operations (Americas) desk.

For instance, the release of Microsoft’s project Natal and Sony’s Move in the third quarter of 2010 is expected to boost the US gaming industry towards the latter part of the year. And given the current economy conditions, Singapore companies can become a valuable partner for US firms to leverage on in order to cut costs and penetrate the Asian marketplace, she added.

Singapore companies should also tap on the US-Singapore Free Trade Agreement to penetrate the US market. The Agreement, which came into force on 1 Jan 2004, covers 100 per cent of Singapore’s domestic exports to the US. This included an immediate tariff elimination on more than 90 per cent of Singapore’s domestic exports upon implementation of the Agreement in 2004.

The seminar also saw several speakers present on various topics that of interest to companies that plan to expand into the US. Among them was Don Zinn, Managing Director for Jumpstart Global Advisors and Executive Vice-President for Starpoint Solutions, who talked about the manpower planning challenges facing Singapore companies operating in the US, and the importance of hiring the right candidate the first time round.

Mr Zinn said that the US is a big market, expensive and it is very important for Singapore companies to focus on getting sales going first before they begin hiring the rest of the support staff. Mr Zinn recommended hiring someone who has scaled growth operations before and someone who can take charge and lead the sales efforts.