Over the last few years, our work at EDC has shifted to focus on our full economic footprint across the county. In everything we do, we strive to implement programs, strategies, and services that will help us double our supply of skilled workers, enable our small businesses to create more competitive jobs, and increase the number of thriving households throughout the region. Now more than ever, we know that our work needs to be both meaningful and measurable to meet these goals. And we have little time to waste.
SMALL BUSINESS IMPACT
During our exploration of inclusive and effective economic development strategies, many roads led us to supporting the growth and sustainability of local, small businesses through purposeful partnerships with large businesses and institutions. Anchor institution strategies—defined procurement programs and partnerships that link local, small businesses with the region’s largest employers including hospitals and universities—have long been successful in fostering small business growth and supplier diversity. These strategies do not look to the large institutions to spend any more than they have already budgeted; they simply strive to increase the percentage of contracts and purchasing within the local economy. Small businesses, minority-owned businesses, woman-owned businesses, businesses located within specific neighborhoods or geographic regions—redirecting spend to any of these leads to more money flowing into the San Diego economy.
This month, San Diego Regional EDC released a study and a set of recommendations aimed at increasing economic opportunity and job creation through purchasing and procurement. What the report clearly outlines is how small shifts in procurement spending can have huge economic impacts in our region.
CONSIDER THESE FACTS
Fourteen local anchor institutions surveyed spend upwards of $9.9 billion each year on a broad range of goods and services. Yet, only $247 million of the reported spending can be traced back to San Diego businesses.
Only 14 percent of the overall spend is reaching small businesses and only 11 percent can be traced back to women and minority-owned businesses.
If these same 14 anchor institutions and partners shifted just one percent of their construction spending to local businesses, it would result in roughly $32 million in local construction revenue, add $466 million to the local economy, and create nearly 4.5 thousand new jobs.
Furthermore, if the same institutions shifted one percent in professional services (e.g. legal, administrative, etc.) to local businesses it would have a $56 million impact on the local economy and create more than 800 jobs.
A MEASURABLE SOLUTION
As we work our way through a complicated and unprecedented economic recovery, our small businesses need more support than ever. To ensure that we reach the businesses most in need of support, preserve our commitment to inclusion and diversity, and maintain our focus on work that is both meaningful and measurable, few strategies will serve our region better than this one. The leadership and decision making is local, the impact is local, and the partnerships and practices forged will create greater, local economic resiliency for years to come.
Asking our citizens to support our local, small businesses is important and noble. But at a time when individual and family spending is strained, and small businesses continue to struggle, the leadership, engagement, and actions of our large institutions are more important than ever.
We applaud the 14 anchor institutions and partners that have stepped forward to be a part of this work with us—including key partners SDG&E, University of San Diego School of Business, Civic San Diego, and the City of San Diego—and as always, we look forward to the full weight of our EDC investors in helping to challenge, support, and steer this work in the months and years ahead.
—Mark Cafferty, president and CEO, EDC