Exporting is merely trading but the customer lives in another country. Exporting is only an extension of the need to trade. Man’s economic and social progress has developed because of the increasing specialisation of labour.
For example, one man found it inconvenient both to be a hunter and to raise crops. The solution was for one man to specialise in hunting and another in farming. Each would produce enough for himself and for the other. They would then exchange their surplus.
Increasing Specialization:
The technology of tool-making resulted in further specialization and interfamily exchange developed into intercommunity exchange. Subsequent tribal groups specialised in particular activities and exchanged their surplus with other tribes. The ultimate extension was trade between nations, that is, international trade.
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We are now going to know about a particular trader who specializes in making shoes and sells them from his market stall. (During the course of the present project, we shall hear a lot more about this Ruralian businessman, named Mr. Trader.)
Exports and the Balance of Payments:
As we shall see, there are several good reasons why it is important for countries and for individual companies to export and to keep expanding their exports.
From the national point of view, the most important reason is that unless a country exports it will not have the foreign currency it must have to import the things it needs but cannot supply itself.
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Without foreign currency, a developing country cannot import the materials, equipment and technology it needs for development even the basic necessities of life. It is clear why this is so if you think about the balance of payments.