2004 NCPPP Innovation Award Winner
Project Location: Statewide in the Commonwealth of Virginia, headquartered in Richmond, VA
Public Sector Partner: Virginia Economic Development Partnership, Division of International Trade
Contact Name: Paul Grossman, 804.545.5752
Private Sector Partner: PIASCIK
Contact Name: Ryan Losi, 804.288.4202
In 2014, Virginia’s exports were $35.9 billion. Generally, Virginia companies interested in exporting face the following challenges to begin exporting: where to go for professional and technical assistance; export planning; startup costs and market research. The Virginia Economic Development Partnership’s (VEDP), Division of International Trade goal is to increase the number of firms that export and the dollar value of Virginia’s exports. The VEDP’s export promotion process is three pronged: 1) an aggressive calendar of international trade missions around the world; 2) in-house staff, resources, programs and services; 3) focused small groups, with intensive applied resources from the VEDP and private sector professional firms, known as the VALET Program. These resources are described in full at the web site www.exportvirginia.org. Essentially, the VALET Program is a staff augmentation and cost sharing partnership between the VEDP and the private sector professional service firms.
Just like any state authority, the VEDP is constrained by budget, available human resources and geographic coverage limits. Launched in January 2002, the program assists exporters in the Commonwealth that have firmly established domestic operations and are committed to international exporting as an expansion strategy. VALET provides capital, expert guidance and concrete solutions for businesses committed to expanding into international markets. The VALET Program incorporates services from VALET Program Partners, a team of experienced international professional service providers who assist the VALET companies with their international goals. Services providers such as attorneys, web designers, bankers, translators and freight-forwarders contribute essential skills for expansion into international markets.
The three point network links the VEDP, private sector professional service firms and the Virginia companies together to accelerate their export strategies. The VEDP contributes $15,000 in expense reimbursements for export related expenditures to each participating company. Each private sector professional service firm is contracted to provide pro bono services to the VALET companies. The specific services are fully described in the contract and utilization is tracked by the VEDP. Virginia companies must meet minimum thresholds for years in business, annual sales, employees and commit to a $20,000 export budget. To date, 305 Virginia companies have been accepted into the VALET Program for intensive export assistance.
Jim Loux, President of Allegheny Logistics Group, a current VALET Program Partner who has worked with the program since its inception in 2002, said, “I never joined the program to simply ‘get business,’ but to develop business and professional relationships with other companies in the Commonwealth. My CFO and I go over the numbers quarterly and can easily confirm that the majority of our transactional business has come from VALET companies but more importantly, I have developed long lasting business friendships with other companies coming out of VALET.”
Virginia benefits from the VALET Programs in the following:
• economic development funds are multiplied by the private sector professional service firms;
• exports are accelerated through the application of intensive resources; and
• private sector professional service firms have new business opportunities that showcase their skills instead of advertising messages.
The Virginia Leaders in Export Trade (VALET) Program is a new partnering concept never before used in a state agency for export promotion. All other U.S. states provide export promotion services through in-house resources, lists of private sector service providers or not at all. By combining pro bono private sector services with VEDP expense reimbursement, Virginia companies have accelerated their export sales. Twenty five companies per year are accepted into this competitive application program. Over the course of the two year VALET Program, each company gets planning help, market research and services from more than 25 private sector firms. Additionally, $15,000 in start-up export expense reimbursements is available from the VEDP per company.
As of July 2015, 257 companies have “graduated” from the program collectively attaining more than $1.26 billion in export sales.
Quality and Implementation
The VALET Program uses a competitive application for Virginia companies. The criterion to apply includes minimums for years in business, annual sales, employees and commitment of a $20,000 export budget. The VEDP assigns one full time program manager and staff researcher. The profile of the average VALET company is $36 million in annual sales, 111 Virginia based employees, 25 years in business, and $3.7 million in export sales at the beginning of the program.
The VEDP’s executive leadership briefed the Governor Warner’s Secretary of Commerce & Trade in early 2001. The VALET Program idea took 12 months to plan and implement. Since inception, 305 companies have been accepted into the program.
Export promotion services are delivered by this innovative approach through agency staff augmented by private sector professional service firms. Virginia’s citizens are reaping the benefits of economic development using private sector funds as a multiplier.
The VEDP contracts with each of the private sector professional firms in the VALET Program in this partnering concept. Additionally, each private professional sector firm agrees to provide free consultations and pro-bono services to the participating public companies. Each professional firm provides the service at its own risk. The contract describes exactly the types of services to be provided.
The 257 Virginia (private sector) companies that have completed the two year VALET Program have received the following types of services from the private professional service firms: legal contracts, web site optimization, freight forwarding, customs broker, language translation and letters of credit. Services received from the VEDP are trade shows, market research, trade missions and a written plan of action. The VEDP’s risk is limited to the services that it provides.
Both the VEDP and the private sector professional firms benefit in this approach to export promotion. The VEDP gets to extend the services available to Virginia’s private sector companies at a low cost. The private sector professional firms get qualified new business opportunities. Regular communication in the quarterly meetings, press releases and media articles has elevated all three parties (VEDP, professional firms and the private sector companies) awareness of exports.