Tradable sector -- Or traded sector. A term that labels industries, or sectors of an industry, that can sell their goods or services in an international marketplace. The most commonly used example of a tradable sector is manufacturing, whose inputs and outputs, can span the globe.
So why is this important to economic development?
Traded industries are known for high levels of innovation, well-paying jobs, and new money entering the economy.
Innovation – Companies producing products that are tradable now compete at a global level, even if they don’t export. To stay ahead of the competition, it is necessary for continued investment into the product, people and process.
Well-paying jobs – Companies have been criticized for sending low-skilled jobs overseas but medium- to high-skilled jobs remain in the local market. Therefore, people working these jobs are better compensated for their educational attainment and skill level.
New money – When companies only deal with other local companies, the dollars that flow from their transaction stay in the local economy. Not to say that’s bad, but there is no growth of the local economy’s value. When companies transact with companies from outside the local economy, it brings in new dollars, raising the market value of the economy.
Combining these factors together makes a strong economic impact on a community.
