Well to answer this question we need to look at a few things including:
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 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:
Indirect Economic Impacts are B2B purchases in the local supply chain that result from the initial spend of a business.
These include:
Induced Economic Impacts happen when the net labor income (both direct and indirect) is spent by the employees.
These include:
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.
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.