How working with a Certified MBE impacts the economy?

By: Moamen Gaballa,

CenterPoint Group
CPG Prospectus

Well to answer this question we need to look at a few things including:

  • What is a Certified MBE?
  • Direct Economic Impact
  • Indirect Economic Impact
  • Induced Economic Impact
  • Conclusion
    shutterstock_1477775183 (1)

What is an MBE?

A certified minority owned business or an MBE is a business that is 51% or more owned and controlled by a person or a group that is a member of a historically under-served or under-represented group such as (Asian-Indian, Asian-Pacific, Black, Hispanic, and Native American) or woman-owned businesses that has been certified by the National Minority Supplier Development Council (NMSDC), The Small Business Administration (SBA) , or by other state and local programs.

Working with a Certified MBE is a way for companies to support their diversity and inclusion (D&I) goals. By contracting with certified MBEs, like Diversity Products, every dollar spent with that MBE will be classified as Tier 1 Diversity Spend that can be tracked and published within their company D&I metrics.

Direct Economic Impact:

Direct Economic Impacts are the production changes or expenditures made by producers/consumers because of an activity or policy. Direct effects can be positive or negative.

These include:

  • Direct Employment: The employment of people who support the Certified MBEs directly. In other words, the employees of the Certified MBEs.
  • Direct Labor Income includes wages, benefits, and payroll taxes of the employees working directly in the Certified MBEs.

Indirect Economic Impact:

Indirect Economic Impacts are B2B purchases in the local supply chain that result from the initial spend of a business.

These include:

  • Indirect Employment: The employment of people who support the businesses that Certified MBEs do business with.
  • Indirect Labor Income: The wages, benefits, and payroll taxes of the employees working in the businesses that are working with Certified MBEs.

Induced Economic Impact:

Induced Economic Impacts happen when the net labor income (both direct and indirect) is spent by the employees.

These include:

  • Induced Employment: The employment of people who support the businesses where the direct and indirect employees end up spending their money on things such as housing, utilities, groceries, etc.
  • Induced Labor Income: The wages, benefits, and payroll taxes of the employees working in businesses where the direct and indirect employees end up spending their money such as people working in healthcare, grocery stores, etc.


Now that we understand each impact a little better; let’s go back to answering the main question of how working with Certified MBEs impact the economy.

Certified MBEs have a direct impact on the personnel they hire, but with businesses, today being more integrated and relying more and more on each other; Certified MBEs end up supporting employment in businesses that they work with.

These businesses also work with other businesses, thus creating a chain reaction in the economy that extends across the supply chain.

Furthermore, MBE employees produce even more economic activity in their local communities. As these employees spend a portion of their salary on things like groceries, education, health, entertainment, and housing. These expenses help to keep jobs in various industries such as construction, education, medicine, and so on.

The following is a page from the NMSDC 2021 Minority Businesses Economic Impact Report. It shows the impact Certified MBEs have on the economy

Figure 1: Total Economic Impact of Certified MBEs

With Certified MBEs having a key role in the economy, it is a no-brainer to consider working with them not only is it ethically and morally right, but also businesses can generate a lot more ROI, enter new markets, and attract new customers.

Learn more about Diversity Products, an award-winning certified MBE that provides office supplies amongst other products and services, and how we can help you achieve your business goals.

Find out what your CenterPoint team can do for you today!

Contact Us


CenterPoint Group provides discounts to key suppliers such as Office Depot, Travel Leaders Corporate, W.W. Grainger, Verizon Wireless, and more...

CPG Supplier Logo Footer

The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.


Have Questions? We Have Answers.

Download CenterPoint's most common FAQs and discover the benefits of working with a leading GPO!

Our FAQ sheet will show you how joining a leading group purchasing organization (GPO) like CenterPoint Group can streamline your procurement process, save you time, and improve your bottom line.