The next generation of international entrepreneurs is having its first exporting experience, and by all indications, it won't be the last. Last fall, 90 students from six Central Florida high schools teamed up with peers from the newly liberated Republic of Moldova to form corporations that will manufacture and export a product.
Junior Achievement and the Eastern Europe Linkage Institute of the University of Central Florida created Project GLOBE (Global Learning of the Business Enterprise) to introduce students to the concept of international joint ventures-and to immerse them in the culture and economic processes of another country. Pamela Finlayson, a teacher at Maynard Evans High School in Orlando, says the 15 students she is shepherding through the program are so into it that they're even meeting outside of class to discuss it.
Last October, the Moldovan students visited their Florida counterparts to discuss products Moldova may want to import. The U.S. pupils, in turn, will journey to Moldova this spring to trade goods and begin the selling phase of Project GLOBE.
"This project gives our students real-world experience," says Finlayson. The experience they gain is invaluable, she says, because it helps students prepare for the reality of international business. "Here, if they fail, the worst that can happen is they get a failing grade. Once you graduate, if you fail, you may not be able to pay the rent."
Bank On It
The specter of exporting probably scares away as many small-business owners as it encourages to do business abroad. Fortunately, there's a place to find most of the information you need-all on one handy CD-ROM disk.
The National Trade Data Bank (NTDB), a CD-ROM created by the U.S. Department of Commerce, is packed with information for companies that want to start marketing their goods and services in other countries as well as for those that already do. Features include the "Export Yellow Pages," where you can research American exporters; market research reports that can help you gauge how your business will fare in a certain country; and foreign trade show calendars. A foreign traders index lists overseas buyers and the products they're seeking.
The NTDB also answers common questions small-business owners have about operating abroad, such as how to make sure they get paid, where to advertise and how to locate distributors for their products. "It provides a lot of timely information entrepreneurs need to get their products out the door," says David Walthour, whose Freeville, New York, export trading and management company uses NTDB regularly. Walthour also offers a seminar on the NTDB every spring at a local community college.
The updated data bank is available on CD-ROM for $40 per month or $360 for a one-year subscription. It can also be accessed free of charge at most Department of Commerce district offices and federal depository libraries.
To order the NTDB, call Stat-USA, the agency within the Department of Commerce that produces the program, at (800) STAT-USA or (202) 482-1986.
One of the first steps in exporting is deciding where to start. Besides being export-friendly, the country you choose should also be a good launching pad from which to target other international markets. Increasingly, the Netherlands is that ideal stepping stone.
"The Netherlands is known as the gateway to Europe," says Erik Leus, area director for the Chicago office of the Netherlands Foreign Investment Agency (NFIA), a division of the Dutch Ministry of Economic Affairs. Leus points out that the Dutch are known for their multilingual capabilities and, due to a trade history spanning centuries, are eager to do business with other countries.
The Netherlands also has a slew of other things going for it. Location is one. Situated in the heart of the Eastern Corridor, the country has access to the Rhine River and is adjacent to the port of Rotterdam-the largest in the world. These attributes make it a natural for transporting goods worldwide.
More evidence supporting the Netherlands as a nurturing nest for small exporters: Dutch workers are known for their productivity, technical skills and motivation. And it certainly doesn't hurt that the Netherlands is well-known as a pro-business environment, especially where customs and taxes are concerned.
Hitting the Netherlands first may have hidden strategic benefits, as well. "A lot of companies find that if they locate in one of the big European countries, they tend to focus on that country," says Leus. "But locating in a smaller country like the Netherlands forces them to also focus on Germany, France and the U.K."
Tjaarda Plas, regional manager of the NFIA's Dallas office, says a lot of companies are going this route. "We're seeing a lot of European headquarters, research and development, and manufacturing facilities being set up in the Netherlands," he says.
Nevertheless, infiltrating another country can seem daunting if you don't have any contacts there. To make the process easier, the NFIA can help you set up an exporting operation in the Netherlands. The five NFIAs-in Dallas; Chicago; New York City; San Mateo, California; and Ottawa, Canada-have extensive contacts in the Netherlands, some of whom can help you negotiate tax incentives or handle site selection.
The NFIA also regularly sets up fact-finding trips to the Netherlands and unites established exporters in various industries with those just starting out. This way, the export neophyte can gain insight from someone who's been through the system before.
Once you're up and running in the Netherlands, you'll enjoy ongoing support from the NFIA, particularly if your company expands. And Leus believes the Netherlands is a natural place for any small business to begin that expansion process. "[Setting up an export operation in the Netherlands] can be a very attractive first step," says Leus, "especially for a smaller company, to limit risk and to create a foothold and a presence in Europe."
When it comes to conducting international business, not all countries are equally honorable. The 1995 Corruption Index, a survey comparing the reputations of nations across the globe, found Pakistan, China and Indonesia are widely considered the most corrupt countries in the world; New Zealand, Denmark and Singapore are considered the least corrupt.
Published by Transparency International, a Berlin-based organization that seeks to raise awareness of international corruption, the Corruption Index is not a scientific survey but reflects the results of various polls of financial journalists and international business interests.
"Corruption is of particular concern to small and medium-sized businesses," says Nancy Zucker Boswell, Transparency International USA's managing director. For one thing, Boswell says, corruption makes it more difficult to negotiate abroad without a well-known name and a lot of leverage. Bribery is an especially big barrier for U.S. small-business exporters. "With few exceptions," she says, "Europeans and Japanese don't have laws prohibiting bribery of a foreign official."
The good news, Boswell says: There's growing recognition of the damaging effects of bribery, and some countries with not-so-sterling reputations are working to change their image. According to Boswell, "Many countries are beginning to look at their laws and say, 'What can we do to make sure our country is not contributing to the problem?' "
Pamela Finlayson, c/o Maynard Evans High School, 4949 Silver Star Rd., Orlando, FL 32808, (407) 293-4900, ext. 626;
Junior Achievement, 2121 Camden Rd., Orlando, FL 32803;
Netherlands Foreign Investment Agency, 6522 Lakeshore Dr., Dallas, TX 75214-3740, (214) 823-7283;
Netherlands Foreign Investment Agency, 303 E. Wacker Dr., #411, Chicago, IL 60601, (312) 616-8400;
Transparency International USA, 1615 L St. N.W., #700, Washington, DC 20036, (202) 682-7048;
David Walthour, c/o Vine Trading Co., (607) 844-9613, fax: (607) 844-4638.