Final report on the NASDA/USAID cooperative agreement featuring the Business Development Seed Fund and the Environmental/Energy Technology Fund, fiscal years 1989-1993

firms. The project has accomplished its objectives. U.S. states now devote an average of 10% of their export promotion resources to marketing in the developing world and rate Southeast Asia and Latin America among their priority markets. Half of the participating U.S. states organized participation in 80 business missions and shows in developing nations during 1992. Seventy-two percent of U.S. states have now worked with A.I.D. Among U.S. states there is a direct correlation between involvement with the NASDA program and the amount of resources devoted to emerging markets. The Business Development Seed Fund and the Environmental/Energy Technology Fund have proven valuable tools for stimulating long-term business relationships between U.S companies and their counterparts in the developing world. Forty projects were approved under the Seed Fund and 37 under the Technology Fund in FY93. The program was highly leveraged; project participants generated over three times as much money as contributed by A.I.D. The projects have produced solid business ties and resulted in developmental and environmental benefits overseas and sustained relationships by the grantees. Initial transactions have been concluded worth over ten times the amount of federal money allocated for the total program. All recipients of Seed Fund grants report having found new business. One-third of the Seed Fund recipients have introduced new technology, one-fifth have entered joint ventures, and 82% have reported that the Seed Fund is critical to their activities. Eighty-two percent of recipients of the Environmental Technology Fund grants have said they would undertake another Technology Fund project. Half of the Technology Fund companies have already increased exports, and two-thirds have helped to reduce pollution in Asia. Less positively, there have been delays in obtaining clearances for A.I.D. staff involved in project proposals. Potentially successful projects were sometimes frustrated or defeated within A.I.D. for bureaucratic or unknown reasons. Efforts to engage the Latin America and Africa Bureaus in the program were unsuccessful. Consequently, ten viable proposals for sub-Saharan Africa could not be funded. The Technology Fund approved far more grants, proportionately, than did the Seed Fund; approval processes of the Technology fund were improved upon based on lessons learned from the less successful implementation of the Seed Fund. The program deadline of 9/93 has placed a burden on some of the project organizers and overseas posts, particularly for the Technology Fund, which only began in 10/92. Finally, the complex sub-grantee agreement package conveying A.I.D. mandatory standard provisions (e.g., legal obligations) discouraged some potential sponsors (e.g., Hawaii and two trade associations) from participating. The following lessons were learned. (1) Many U.S. companies with the capability to do business in emerging markets are reluctant to do so without technical support and matching grants. The Technology and Seed funds were critical to filling this gap. (2) Participant companies had full understanding that they were contributing to economic development overseas. (3) Projects could have been more effective if grant recipients had worked earlier and more closely with USG offices abroad. (4) The program would have benefited from increased publicity, e.g., publication of success stories in association newsletters. (5) The quick turnaround "no objection" procedure of the Technology Fund, combined with a public/private review panel, enhanced the program"s ability to respond to clients. (6) State international trade offices and similar experienced organizations resulted in better program performance and yielded better results than did small, private nonprofits that sometimes employ just one person for project implementation.