STEP Export Program Gives Kentucky Companies Entree to Global Markets
Kentucky Grows Its Export Market with a Federally Funded Program.
Part of Kentucky’s global initiative includes growing its export market, and the State Trade and Export Promotion (STEP) program is designed to help to increase the number of small businesses that export.
STEP is part of a three-year trade and export promotion pilot effort authorized by the Small Business Administration Act of 2010. Companies can apply for grants to help them perform market research, identify international customers, participate in trade shows and even translate websites and marketing materials.
“The first year, 2011, we awarded $478,000,” says Brad Thomas of the Kentucky Cabinet for Economic Development. “And so far this year we’ve awarded $278,000. We look for companies with goals in line with ours. We’re looking for businesses with a plan, not just those seeking money.”
The Program Impacts Local Businesses
Grants are available to Kentucky companies with fewer than 500 employees that meet revenue requirements set by the Small Business Administration. As of December 2012, the STEP program had made awards to 51 companies.
Animal medical instrument manufacturer MILA International of Erlanger was one of those grant recipients. The company used the funds to attend the International Veterinary Emergency and Critical Care Symposium.
Jason Sansone of MILA says the money enabled him to invite his distributor from Brazil and their MILA sales associate.
“This was valuable because it enabled us to educate, demonstrate and train our Brazilian counterparts,” he says. “Brazil is our second Latin American enterprise in the last two years and we are optimistic it will be as successful as our Mexican venture.”
Restorative Medical Inc., a Brandenburg-based company that designs and manufacturers medical splints and braces, used its grant to attend a trade show in Melbourne, Australia, reaching neurological therapists, physicians and suppliers on the other side of the globe. And automotive supplier Superior Battery Manufacturing Co. of Russell Springs used its grant to establish new distribution channels for the future.
The Program Impacts Kentucky's Business Climate
During the first half of 2012, Kentucky’s export market increased by almost 8 percent to a record $10.7 billion, with export shipments for 2011 totaling $20.1 billion. Kentucky ranks 19th in the nation in total exports, and 11th in per capita exporting.
Canada is Kentucky’s largest market, purchasing 32.2 percent of Kentucky’s exports, the United Kingdom, Mexico, Japan and Brazil completing the top five. In 2011, the largest product being exported was transportation equipment, valued at $6.99 billion. Chemicals are Kentucky’s second-largest export, valued at $3.94 billion.
The state’s export industry creates approximately 48,700 jobs. The annual average wage for a direct-export-created job during 2011 was $65,500, considerably higher than the state’s annual average wage of $39,643.
Companies can apply for a grant each year. Those new to the program can receive up to $7,500 their first year, and companies who have previously received funds can apply for up to $2,500 each year.
“The federal funds end after next year,” says Thomas. “We’re trying to figure out how we can keep exporting growing. From a factory perspective, adding foreign markets often helps companies add another shift. That means they hire more employees and that helps companies and the state of Kentucky stay strong in the long run.”