Background

When establishing the U.S. Export Assistance Centers (USEAC) in 1993, the Trade Promotion Coordinating Committee (TPCC) designated the U.S. Department of Commerce as the primary provider of export promotion services, such as market information and counseling, to export-ready firms. The other USEAC partners, the U.S. Export-Import Bank (Eximbank) and the Small Business Administration (SBA), were to provide firms with export financing support. In addition, SBA was to provide training for new-to-export firms through its Export Trade Assistance Partnership program. The program provides training, counseling, and trade mission opportunities available from federal, public, and private organizations.
Commerce’s Office of U.S. and Foreign Commercial Service and SBA’s Office of International Trade oversee their staffs at the 19 USEACs— generally one SBA loan officer and several Commerce trade specialists per USEAC. The USEACs are aided by a nationwide network of 55 domestically focused Commerce District Export Councils (comprised of local businesses) as well as over 1,000 Small Business Development Centers, partially funded by SBA. In addition, USEACs partner with chambers of commerce, trade centers, and colleges and universities to encourage small businesses to expand their export activities and to assist small businesses seeking to export.
To increase the number of U.S. exporters, Commerce and SBA seek to identify export-capable firms that are not yet exporting and provide them with export training opportunities. Commerce and SBA staff recruit attendees through trade associations, chambers of commerce, advertising, seminar attendance, and cold-calling firms. SBA’s Office of International Trade requires its staff to conduct one Export Trade Assistance Partnership program annually. SBA does not provide training program funding. Training facilitation is a collateral duty of SBA’s staff at the USEACs and a small part of their required performance criteria.
Both SBA and Commerce work with other federal and state agencies to deliver the training curriculum. For example, SBA , Commerce, and Eximbank staff at the USEACs participate in export training by providing information on their agencies’ programs. In addition, public and private entities, such as state export promotion agencies or local colleges, sometimes present information on specific export topics.

	The Two Export Training Programs Were Not Coordinated

The Department of Commerce did not coordinate closely with SBA when it developed a separate Commerce export training program in 1999 as part of the Global Diversity Initiative—a Commerce effort to reach an underserved community of minority- and woman-owned firms. Six years after the TPCC delineated agency roles at USEACs, Commerce’s U.S. and Foreign Commercial Service began offering export training, known as the Market Entry Program, that duplicated training provided by SBA. Not only are the program objectives similar, but the participant criteria and the curricula are very much the same. (See table 1.) Moreover, speakers for the programs were the same. Several of the centers have combined program presentations. TPCC officials, located in the Secretary of Commerce’s Office, were aware that Commerce had instituted the Market Entry Program at the USEACs but were unaware that it duplicated SBA’s training.
Seven of the 10 U.S. Export Assistance Centers we visited had conducted both Export Trade Assistance Partnership and Market Entry Programs. Training agendas at three of these centers were identical, while the training agendas at the remaining four centers were similar. Similar course topics for both programs include market research, market entry and pricing, legal aspects of exporting, required documentation and transportation methods, the regulatory environment of importing countries, international methods of payment, trade finance, and cultural nuances.
SBA and Commerce USEAC staff at nearly all of the centers that we visited routinely present information on their services at each other’s programs. Moreover, both agencies’ staff assist each other in identifying potential training participants. The one SBA staff at each USEAC not only develops the SBA training as a collateral duty but also participates in Commerce’s training program. Sponsoring the program can be time- consuming, particularly the process of recruiting firms, according to SBA officials. SBA program guidelines suggest using Commerce staff and others to help design and deliver the program, and Commerce USEAC staff have done so. Commerce, which has several staff at most USEACs, has dedicated staff to facilitate the Market Entry Program and has provided program funding. In addition to 2 headquarters staff administrators, Commerce has dedicated 4 staff as field coordinators and 21 as trade specialists in the USEACs to assist with the training, in addition to their other duties. Market Entry Program guidelines require Commerce program coordinators to use SBA staff to identify and provide outreach to minority firms.
Because both training programs have similar course topics and common presenters and serve similar clients, Commerce and SBA staff at three U.S. Export Assistance Centers have combined the Export Trade Assistance Partnership and the Market Entry Programs into a single training program. Officials in three other U.S. Export Assistance Centers that held separate training programs believed that the two training programs shared similarities and could, therefore, be joined.

		TPCC Did Not Identify Duplication

The TPCC, mandated to eliminate duplication in federal programs that promote U.S. exports, was unaware that Commerce’s program duplicated SBA’s training program, although the TPCC was aware of Commerce’s program and used it to support its budget priorities in a November 1999 memorandum to the Office of Management and Budget (OMB). The TPCC annually requires member agencies to submit information on their trade promotion efforts and identify program or agency issues as part of its mandate to create a unified budget and eliminate duplication. Citing the need to better coordinate trade promotion activities, the TPCC prioritizes member agencies’ needs, uses agency initiatives to support those priorities, and submits a memorandum to OMB outlining them. Commerce’s Global Diversity Initiative, identified as a relatively new initiative to outreach to underserved communities, was included to support a requested increase in funding for Commerce’s U.S. and Foreign Commercial Service small business programs. When we spoke with TPCC officials in March 2001 regarding the similarities in SBA’s and Commerce’s export training programs, they were unaware of how the programs were duplicative. The TPCC interagency working group on small business, the forum where such an issue would be discussed, had not met for several years, according to an SBA official.

	Performance Measures Provide a Partial Picture of Training Program Results

Commerce and SBA do not systematically collect information on the number of new exporters or the export sales the training programs generate. Commerce tracks information on clients generally but does not distinguish between trainees and other clients, and SBA does not consistently track training participants’ exports. SBA data collected in the spring of 2001 indicate that only a few training participants later used Commerce’s products and services. Our interviews with USEAC personnel suggest that the difficulty in recruiting export-ready firms, as well as the normal challenges that exporters face, may contribute to this low usage of pre-export products and services.

		Measures Are Geared to Pre-export Activities

Commerce and SBA track certain pre-export activities as outputs for the purpose of measuring both USEAC and staff performance. Commerce collects data on the number of new clients’ export actions (such as going on an overseas trade mission) and export successes, but it does not track these measures specifically for trainees. SBA regularly collects loan data for its clients, but it does not systematically collect data on export sales generated by training participants. For example, SBA headquarters officials requested data on export sales generated by Export Trade Assistance Partnership Program participants in fiscal year 2000, but several SBA staff at the USEACs that we visited told us that no such request has been made for fiscal year 2001. However, an SBA official told us that SBA intends to collect this information again in fiscal year 2001.

		SBA and Commerce Data Show Limited Use of USEAC Products and Services

USEAC training programs ideally increase the number of new exporters and also expand the demand for Commerce and SBA products as firms seek information on specific markets and export finance. However, few of the USEAC training participants used an export product, such as customized market research, following training. In response to our request for data on its export-training participants, SBA initiated a USEAC-wide survey of its trainers in April 2001.  According to SBA officials, only 182 of the 1,196 participants (about 15 percent) in the 62 Export Trade Assistance Partnership Program training sessions held between 1998 and 2001 subsequently used a Commerce export product or service. Some training participants used a Commerce product but did not go on to export.

		Training Participants Were Not Systematically Tracked

We were unable to determine how many training participants became active exporters or the value of their exports because the USEAC staff do not systematically follow up on attendees, although such follow-up is a program requirement for both SBA and Commerce training programs. Training program organizers for both programs survey participants at the end of the training, but they do not systematically collect data on how many participants go on to export and the value of their subsequent export sales. As mentioned earlier, SBA conducted a one-time survey to collect that data, but it does not do so on a regular basis. In that survey, SBA trainers reported that 96 of the 1,196 firms that received training (8 percent) had generated $452 million in export sales. However, that data may overstate program results. According to the survey data provided to us, a portion of the export sales identified came from firms that had received export training but also had already been exporters. Consequently, not all of the $452 million in export sales can be claimed as a result of the training received by these firms.
According to Commerce officials, it takes about a year or more to become an active exporter. SBA officials said that they may become aware of training participant exports when the participant uses a USEAC product, but they said that they have not been able to systematically track graduates. Commerce’s Market Entry Program, begun in fiscal year 1999, has had time to show some results. Commerce officials also cited the difficulty of tracking participants but told us that they knew of a few participants that had gone on to export. Tracking training participants is both time-consuming and challenging, according to both SBA and Commerce officials, due to the lag time between the business’s first exposure to the training material and its eventual success in entering an export market. Other factors may also complicate the collection of data needed for tracking outcomes. In some cases, for example, firms that are already exporting may send its employees for training, but it would not be appropriate to count these firms as new exporters or count their exports as additional exports. As a result, training managers do not have the data to guide decisions about program improvements or to assess whether the training program is generally successful in reaching its objective.

		Recruiting Difficulties May Affect Performance

The inability of trainers to recruit qualified training participants could affect USEACs’ meeting their performance goal of an increased number of exporters and increased use of products. Recruiting qualified participants sometimes proved difficult for the training organizers, and training program officials told us that some training participants were not ready to export, in terms of having a proven business record and an exportable product.
USEACs that had difficulty recruiting qualified potential exporters relaxed the criteria for participation for a variety of reasons. According to SBA and Commerce officials, a general lack of interest in exporting by small firms and the availability of similar training locally at world trade centers and universities make it difficult to find firms willing to dedicate work time to training or to find qualified training participants. At one USEAC, several classes were cancelled due to lack of interest, while other USEACs experienced high dropout rates. Difficulty in recruiting and the need to fill classes resulted in letting firms enroll, even if they did not have an exportable product or were in fact large manufacturing firms. Moreover, not all participants in the seminars were focused on becoming exporters. For example, with local needs driving course content, the objectives in one training seminar were expanded to include providing information about importing. Also, one SBA official opined that USEAC staff may have relaxed the criteria in order to meet agency training requirements for conducting export training.

		Other Factors Affect the Success of Export Training

Other factors affecting the success of export training programs include the general obstacles all exporters face. Training officials told us that exporters face numerous difficulties in foreign markets, such as finding local agents as well as dealing with requirements imposed by foreign governments. In addition, small business loans have become increasingly difficult to find due to changes in the U.S. banking sector. Firms that are eventually successful can take 12 to 18 months before being ready to export, thus making it more difficult to monitor them systematically and attribute the resulting exports or use of export services to the training program.

	Conclusion

The TPCC recommended the establishment of the USEACs in order to provide potential exporters with one-stop shops where agencies would work together to make the best use of their expertise and resources. Yet Commerce and SBA are providing export training programs at the USEACs that are virtually identical in their key program elements. Commerce’s objective of increasing various minority and women exporters through training could have been accomplished by coordinating with SBA trainers to emphasize minority- and women-owned businesses when recruiting for their program. In fact, both agencies have experienced difficulties in identifying export-capable firms that could benefit from export training and in recruiting such firms for the training programs they are providing. Also, Commerce and SBA have not systematically conducted follow-up contacts with training participants in order to understand their export experiences and make training program adjustments to better serve potential small business exporters. In addition, Commerce’s duplication of SBA training illustrates that the TPCC has not fully met its mandate to coordinate trade promotion agencies’ efforts and eliminate duplication.

	Recommendation for Executive Action

We recommended that the Trade Promotion Coordinating Committee eliminate duplication of export training services by determining the best way to combine SBA’s and Commerce’s export training programs delivered by the USEACs. In addition, we recommend that the USEACs systematically follow up on new-to-export training participants as part of an effort to consider the training needs of small businesses in order to make program adjustments.

	Agency Comments

The Department of Commerce’s Office of International Trade generally concurred with the report’s findings and planned to integrate SBA and Department of Commerce export training programs in fiscal year 2002. The office also plans to conduct a more systematic follow-up with training participants as we recommended.  The Department of Commerce’s written comments are presented in the appendix.  The Small Business Administration did not provide comments.

	Scope and Methodology

To determine how well the USEAC partners coordinated export training, we interviewed and obtained data from Department of Commerce; SBA; Eximbank; and TPCC staff in Washington, D.C., and at 10 USEACs (Baltimore, Chicago, Dallas, Denver, Detroit, Long Beach, San Jose, New Orleans, St. Louis, and Philadelphia). We selected these centers after contacting all 19 USEACs to identify those with training programs and by including centers that SBA recommended as having good programs. We interviewed agencies’ training organizers or presenters, obtained agency documents establishing the programs and training agendas, and had USEAC staff identify various minority and women participants in the training programs. We also talked with some program participants identified by the USEACs. In addition, we requested further data on SBA’s training program, which SBA obtained by surveying USEAC staff in April 2001.
To determine how the agencies measured the results of their export training programs, we obtained and examined USEAC and agency strategic plans, personnel performance measures, agency performance reports, and an internal Commerce evaluation of key products. In addition, we discussed performance measures with senior agency and USEAC staff.
We performed our work from March through July 2001 in accordance with generally accepted government auditing standards.
As you requested, we plan no further distribution of this report until 30 days from its issue date.  At that time, we will send copies of this report to the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business, other interested congressional committees, the Secretary of Commerce, and the Administrator of the Small Business Administration. We will also make copies available to others on request.
If you or your staffs have any questions regarding this report, please call me at (202) 512-4128. Key contributors to this report were Virginia Hughes, Judith Knepper, Victoria Lin, Patricia Martin, and Hector Wong.

Appendix: Comments From the Department of Commerce

Summary:
Why GAO Did This Study

The Export Enhancement Act of 1992 created the Trade Promotion Coordinating Committee to coordinate the delivery of federal export promotion services and to eliminate the areas of overlap and duplication among federal export promotion programs. The Export Enhancement Act of 1999 reiterated that eliminating duplication was a primary objective. In 1993, Congress recommended that three agencies co-locate their staffs at a domestic network of 19 "one-stop shops" called U.S. Export Assistance Centers. These centers were to provide coordinated export training, as well as trade leads, export finance, and counseling to U.S. firms interested in becoming exporters.

What GAO Found

GAO found that the Department of Commerce did not coordinate closely with the Small Business Administration in introducing its export training program. As a result, Commerce and the SBA provide separate and duplicative training programs for potential small business exporters. Neither Commerce nor SBA systematically collect outcome data for their export training programs. Instead, both agencies track the number of clients trained and Commerce identifies export successes for its clients overall, but not for training participants. Staff at Commerce and SBA do not systematically follow up with training participants to learn whether they have exported, the difficulties they encountered, and how training programs might need to be adjusted to be more helpful.