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1 EXPORTS AND IMPORT-REPLACEMENT 2 For the Pequot Lakes economy to prosper in the coming years,it is important that community leaders understand 3 the relationship between export industries(businesses that"export"goods and services outside of the community 4 and, in exchange, "import" capital to the community) and import-replacement industries (those that serve the 5 local market). 6 It is easy to understand exports and import-replacement on a national scale.We export computer chips made in 7 the United States to Europe.In this instance the chip is an export that brings outside capital into the country.We 8 import strawberries from Peru. When we provide strawberries domestically instead of importing them from Peru, 9 locally-grown strawberries become an import-replacement. American money now goes to American producers 10 instead of being sent to Peru. 11 The same thing happens at the local level.When someone from Pequot Lakes drives to Brainerd to buy furniture, 12 Brainerd is exporting the furniture to us.Our money goes to Brainerd's market and the furniture comes to Pequot 13 (imported).When that resident opts instead to purchase the furniture built in Pequot Lakes,then the furniture is 14 an import-replacement. Instead of buying it from someplace in Brainerd, the furniture was bought and 15 manufactured locally and the money stays in the community. 16 The following table shows how this relationship has worked throughout the history of Pequot Lakes. Export Industries Import-Replacement Industries Early Logging Era Raw wood and lightly Services and goods for lumberjacks and processed wood materials those in support of the forestry industry(eg. shoe repair,clothing sales,bars and restaurants) Agriculture/Tourism Agriculture,Tourism Services and goods for agriculture,tourists Era service,fishing experience and support services for the tourism and-to a lesser degree- industry(eg.fishing guides,bait stores, fish tourist retail shops) Rapid Development Land as well as land Services and goods for new residents and Era development and support services for land development construction-related activities(eg.title companies,real estate services offices,surveyors,government services) Next Era Unknown Unknown 17 18 The first way a neighborhood center like Pequot Lakes can create a prosperous local economy is to create an 19 environment where competitive, import-replacement businesses can flourish.The second way is to increase the 20 number of exporting businesses so as to bring new capital into the city. 21 PRINCIPLES 22 A healthy,ongoing public/private partnership between the City of Pequot Lakes and the businesses located inside 23 the city limits must be based on an understanding that each has a part in the process of creating export and 24 import-replacement businesses.What the city government of Pequot Lakes can do to is to create a framework for 25 growth that provides the widest variety of local entrepreneurs the greatest chance for success. DRAFT-November 2010 19 1 P a g e