A first issue was the type of consulting advice provided. As we discussed in section 2.3, there are two ways we viewed the consulting as potentially changing exports: a direct approach in which it improved export-specific management practices and really focused on customers and markets abroad, and an indirect approach in which it aimed to improve general management practices and productivity, enabling firms to be more competitive and (perhaps eventually) better able to compete in foreign markets. The government’s focus over time shifted to this second approach, and we see that the program was not successful in changing export-specific management practices, but only general management practices. Our qualitative discussions with the commercial strategy consultants and several program firms found that the consultants believed that the majority of firms could not consistently produce at the capacity and quality needed to go to external markets, and so, in some cases, actually recommended that they focused more on the domestic market than foreign markets. Appendix B does give some examples of specific advice offered on particular export matters, but for the most part, the commercial advice was not specifically tailored to exporting, and the focus in the other four consulting areas was more on general productivity than what was needed for overseas export markets.

This might suggest that we should expect to see improvements in other firm outcomes, even if it does not immediately translate into export performance. Appendix E uses data on firm survival, employment, sales, profits and productivity to examine whether this improvement in general management practices improved other firm outcomes. We see a marginally significant 5 percentage point improvement in firm survival rates by the end of 2020, consistent with these general management improvements potentially helping firms survive through the COVID pandemic. However, these additional firms that survived were smaller and less productive ones, and so this does not help export outcomes. Moreover, although the heterogeneity in firms makes it hard to measure impacts on these firm performance outcomes, there is certainly no strong evidence of improvement in these other domains. Employment impacts are small (a statistically insignificant 0.4 worker change relative to a sample mean of 80 workers), and the point estimates for the treatment impacts on sales, profits, and sales per worker are all negative, with the -12.7 percent reduction in sales in 2020 statistically significant. So it does not appear that firms are well on their way to increasing exports through this indirect route of increasing domestic sales and productivity first.

This raises the issue of the quality and intensity of the consulting provided. We surveyed the consultants to understand their backgrounds. The median consultant was 45, with 17 years of experience, and a Masters’ degree, and 73 percent said they had previously worked for a multinational or an exporter. So, on paper at least, the consultants had relevant expertise. However, the consulting intervention was shorter in intensity and less coordinated than in some other consulting experiments. Firms received 190 hours of 28