Nevada hopes to apply lessons it learned in the first year of a federally-funded program to better help the state's small and medium-sized businesses venture into the export market next year.
The Nevada State Trade and Export, or STEP, program is part of a broad set of initiatives undertaken by the state to boost business exports, one of five objectives laid out in state plan for economic development.
The main goal is to create Nevada jobs, because export-oriented jobs pay 13 percent higher on average, according to the plan. But it's also part of a much bigger, federal effort to jumpstart the economy by increasing the nation's exports by 20 percent.
The program is funded by the Small Business Administration as part of the Small Business Jobs Act passed last year by the U.S. Congress.
Nevada received $239,318 to fund its 2012 STEP efforts. The money served primarily as a pool for which businesses could apply to help promote and market their products and services abroad.
The program was recently renewed with a $203,878 grant from the SBA. A supplemental grant from the state brings the total to more than $213,000 available in 2013 to assist businesses. The program is administered here by Nevada Investment and Trade Revenue Opportunities (NITRO), under the Governor's Office of Economic Development.
Originally, the individual business grants, which must be matched by the companies applying for them, were capped at $12,500. But that was part of the first lesson NITRO learned.
"The first year, we did not get enough people applying for the grant," says Alan DiStefano, director of global business development for the Governor's Office of Economic Development. "It is essentially free money, but it was hard to get people to apply for it. We heard a lot of excuses, and it's hard to tell what the reason was, but we're seeing a lot more people interested in getting the grant money now."
NITRO holds outreach seminars to promote the program and hopes to increase the number of attendees who apply for the grant. Last year, the seminars attracted 32 companies, but only seven of them ended up receiving grants, according to DiStefano. Two applicants were turned down.
The main problem last year arose because some businesses considered the application process to be onerous. So NITRO upped the ante, increasing the top grants to $25,000 each.
The process is still complicated. Applicants must, for example, provide detailed business plans for each country they intend to target for exports, but now there is twice the incentive to take the time to apply.
At the same, NITRO lowered the bottom grant level to $1,000, available through a relatively painless application, to provide money that companies can apply to the cost of seminars on export basics such as ExportTech, a three-day class held by Nevada Industry Excellence. The group formerly known as MAP has held several in southern Nevada and is hosting its first series in the north, in Reno, starting in February.
A third grant is available for $5,000. The differing levels of grants helped appeal to a broader range of businesses, from complete neophytes to those prepared and ready to launch into exports, says DiStefano.
Another lesson gleaned was that state experts in exports need to work with companies individually. NITRO provides what it calls export-readiness consultations, two-hour meetings in which NITRO personnel answer questions about strategy including costs and sales channels and provide access to export databases that businesses can't afford to tap into on their own.
Initially, NITRO was conducting the meetings in groups. But DiStefano says companies were reluctant to take part if their competitors were present, so NITRO began holding the consultations on a one-on-one basis.
Early next year, the state will pay tribute to its export success stories at a conference, the details of which will be announced in the next few weeks, says DiStefano.
Despite the bumps, Nevada has succeeded in significantly expanding its exports, whether due to government programs or unassisted private ingenuity or a combination of both.
In 2011, it led the nation's states in export growth, increasing exports by 35 percent to almost $8 billion. In the first nine months of 2012, exports jumped 31 percent. With the fourth quarter historically the strongest, export growth could hit 35 percent again this year, says DiStefano.
The state will likely finish third this year, behind fast-growing New Mexico and West Virginia, but well ahead of the national average under 6 percent.
Besides STEP, Nevada took other steps this year to build up its exports base, including large export trade luncheons in southern Nevada in March and another at the Governor's Mansion in Carson City in October, as well as a trade mission to China and South Korea in September led by Gov. Brian Sandoval.
