Export Promotion

The Small Business Administration (SBA) spent about $3.7 million on export promotion programs in fiscal year 1991. Most of SBA's export promotion assistance is delivered through 21 subcenters of its Small Business Development Center program. These subcenters specialize in providing international trade assistance. GAO found that SBA has neither consistently emphasized export promotion nor fully determined its role in the federal effort to boost exports. SBA's export counseling lacks a strategic focus and, as a result, could be targeting the same clients that the Commerce Department is trying to serve. A 1990 law restricting SBA's ability to impose any new rules or regulations on its Small Business Development Center program makes it hard for SBA to better target its export counseling. Moreover, SBA's main export finance promotion program has been little used, and the agency may be overstating the extent to which its other finance programs help small businesses export. Also, SBA's ability to provide export promotion assistance beyond basic outreach and referral is hindered by the agency's domestic orientation and management structure.

GAO found that: (1) SBA export programs lack a strategic focus because SBA has neither clearly identified the small businesses' export assistance needs it can best meet, nor targeted its export assistance accordingly; (2) SBA has given little guidance to its SBDC international trade subcenters on how to target or evaluate their export assistance or train their staffs; (3) SBA has been prohibited by law since fiscal year (FY) 1990 from further regulating SBDC subcenters, and although lead SBDC centers in each state can provide necessary guidance, they generally fail to do so; (4) some subcenters targeted the same clientele as Commerce district offices, maintaining that the demand for export counseling services exceeded the supply; (5) some subcenters have given import assistance instead of export assistance, which is contrary to their mission; (6) the SBA Export Revolving Line of Credit Program (ERLC) has been underutilized due to insufficient training of loan officers, poor marketing, and the reluctance of lenders to participate, and SBA has restructured the program somewhat to correct those problems; (7) SBA may have overstated the assistance provided under other financial programs due to inexact reporting practices, as only 40 percent of non-ERLC guarantees could be directly tied to exporting activities; (8) SBA has not consistently emphasized export promotion, as shown by its budget request to reduce its support of export counseling in FY 1993, its failure to fully fund its ERLC pilot program, and its abrupt suspension of financial support to small businesses participating in the Commerce-sponsored Matchmaker program; and (9) management responsibility for export promotion is diffused through several SBA offices, with the Office of International Trade acting primarily as an internal advocate rather than as a direct supervising entity.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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