Los Angeles Regional Export Council (LARExC)

A case study from our Future of Government series This case study is part of a series aiming to review alternative management and governance practices, with a view to exploring different ways in which governments could run to better meet citizens' needs.

The global financial crisis of 2007-08 resulted in an economic downturn in LA, as in many other world cities. In order to stimulate growth and jobs, the city looked to its exports as an under-exploited resource that held the key to its revival. With the help of the Brookings Institution and the private sector, it created the LARExC and focused on trading with other global economies.

The challenge

Like any metropolitan areas in the US, the Los Angeles (LA) region has struggled as a result of the 2007-08 financial crisis and the subsequent American recession. The region’s leaders were clear that exports offered a significant opportunity to grow the metropolitan economy over the coming decade.

The initiative

There were ongoing discussions between LA’s then mayor, Antonio Villaraigosa, and the Brookings Institution and these led to the development of an export plan with the National Export Initiative (NEI). One outcome was the creation of the Los Angeles Regional Export Council (LARExC) in 2011. It is a public-private partnership between government, business, and educational institutions.

LARExC has the following objectives:

  • Creating more jobs in the LA economy by promoting export-oriented businesses.
  • Coordinating and streamlining export services in the LA region.

It focuses on immigrant-owned businesses which have strong business ties to their country of origin and which have the know-how to export more widely.

The public impact

In 2014, LA was the third largest metropolitan area exporter in the United States, with merchandise shipments totalling US$75.5 billion. It accounted for 40.8 percent of California’s merchandise exports. It benefited from existing trade agreements, exporting 45.8 percent of merchandise exports to free trade agreement (FTA) partners.

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Stakeholder Engagement Strong

The LA city administration works closely with private companies and research institutes to ensure seamless implementation and success of the initiative.

LARExC has reached significant milestones, including a first private sector investment from JPMorgan Chase and a funding commitment from the Port of Los Angeles. The programme “matches MBA students from the [University of Southern California (USC)] and [University of California Los Angeles (UCLA)] business schools with local export-ready businesses. It helps to fill a critical gap by providing these businesses with market research, market entry strategies and the development of export business plans”. [1]

Political Commitment Fair

The programme was planned and launched by the city administration. The main commitment comes from LA’s mayor, apart from which there is no explicit evidence of political support or commitment. In the 2012 announcement of the Regional Export Plan, it was stated that “the LA Regional Export Council and the LA Regional Export Plan are core components of Mayor Villaraigosa's ‘partnering for economic growth’ strategy”. [2]

Policy

Clear Objectives Good

The main objective was to create more growth and employment in the LA regional economy by promoting export-oriented businesses, with a focus on those owned by recent immigrants. As the current LA mayor, Eric Garcetti expressed LARExC’s goals: “we in Los Angeles are not waiting for Washington to create jobs. We launched the Los Angeles Regional Export Council to help make it easier for local businesses to find the export assistance they need to grow their businesses and create new jobs”. [3]

Evidence Good

The LA region was the first of four pilot metropolitan areas to partner in this MEI. The initiative the involved establishment of a working group of local export support institutions (e.g., chambers of commerce, transport hubs and universities) to develop a localised, bottom-up, data-driven export plan.

Feasibility Strong

In association with the Brookings Institution, including its Global Cities Initiative and the Brookings-Rockefeller Project on State and Metropolitan Innovation, a detailed market assessment study was undertaken to ascertain the feasibility of LARExC. “A comprehensive market assessment was conducted at the start of the project to ensure the export plan was developed based on solid information ... It included data benchmarking and one-on-one interviews with companies and local export services providers. It revealed that, although Los Angeles is the top US exporting region, there is significant untapped opportunity to grow exports.” [4]

Action

Management Strong

LARExC has a multi-tiered management system, comprising a board of directors, an advisory board, an executive director and task forces for specific purposes such as access to capital, foreign direct investment, research and marketing. It has a strong management team with a full-time executive director, Bronwen Madden, and an experienced team that includes members from fields such as local government, industry and consultancy.

Measurement Good

The main indicators to measure the effectiveness of the LARExC initiative are:

  • The volume and type of exports originating from the LA region.
  • The growth in jobs and the regional economy.

Alignment Good

LARExC is a collaboration of regional export service organisations. It  includes seven key partners whose interests are closely aligned in seeking to grow LA’s exports:

  • “Los Angeles Mayor's Office. [1]
  • “Los Angeles Area Chamber of Commerce.
  • “UCLA Center for International Business Education and Research.
  • “The Port of Los Angeles.
  • “Los Angeles World Airports.
  • “California Center for International Trade Development (CITD) – Los Angeles.
  • “USC Center for International Business Education and Research.”