Statement of the Hon. Sharice Davids on The SBA Office of International Trade and the STEP Program as Key Tools for Recovery and Expansion
Washington, July 18, 2022
American entrepreneurs are nearly always looking to expand their businesses. Whether it’s hiring new workers, offering new products, or opening new locations, small business owners always have an eye on growth.
In recent years, increased globalization and digital adoption have led many small businesses to expand their offerings into international markets. Approximately 166,384 small businesses in the United States currently export, accounting for about 26 percent of all U.S. exports and $341 billion in export sales. However, small business exporters represent only 3 percent of total U.S. small employer firms. With 96 percent of all consumers and two-thirds of the world's purchasing power residing beyond U.S. borders, increased exporting has the potential to boost the small business economy.
Recognizing this, the Small Business Administration created the Office of International Trade in 2010. OIT works in cooperation with other federal agencies and public and private sector groups to encourage small business exports and provide small business export assistance.
Small firms are often discouraged from selling their products overseas due to the complex exporting process, the capital required to fill foreign orders, and the expertise necessary to follow international rules and regulations.
These unique challenges spurred Congress to create a three-year State Trade and Export Promotion pilot grant initiative in 2010. In 2015, Congress authorized the program through 2020 and renamed it the State Trade Expansion Program, otherwise known as STEP.
STEP provides small firms with the knowledge and support they need to expand into new markets and export their products abroad. The program awards matching funds to states and territories for participation in trade missions, international marketing efforts, workshops, export trade show exhibits, and other promotional activities.
Over the years, these initiatives have helped thousands of small businesses overcome the barriers that stop many firms from participating in the international marketplace. In FY 2021, SBA supported $832 million in export sales from STEP and assisted over 3,400 small businesses. Last Congress, the House passed H.R. 6133, the STEP Improvement Act of 2020. Which would have reauthorized STEP for four fiscal years, increased grant spending flexibility, and made a range of additional improvements. The committee plans to introduce similar legislation this Congress.
As we prepare for STEP reauthorization, we must look closely at what’s working well in the program and identify areas for improvement. Improving operations and efficiency within STEP will help American entrepreneurs break into exporting and boost the overall economy. I look forward to hearing from our witnesses about their experience with STEP and the actions Congress and SBA can take to ensure the program helps as many small businesses as possible.