Diversity initiatives have been at the top of many companies’ must-do list. While it’s widely accepted as a “good thing to do”, a commitment to diversity and inclusion practices actually benefits your business in more ways than you can imagine.
Economic Impact, as defined, is a compilation of the direct impact, the indirect impact, and the induced impact generated in the economy. It measures the dollar value of spending all tiers of the supply chain. Economic Impact Reporting is a great tool to ensure your diversity spend is aligned with your company’s goal. Though the purpose varies between corporations, these metrics and their benefits are plenty. For example, many companies publish their reports to public sector stakeholders to show how well a company manages its diverse suppliers’ demographic and optimizes its supplier spend. Some others use it to evaluate their corporate socio-economic impact bottom line internally and then strategically redesign their processes for the desired effect.
According to the Citi GPS report, if the racial inequality gaps were closed today, $5 trillion of additional GDP would be added over the next five years. In other words, there would be around 0.35 percentage points added to U.S. GDP growth per year and 0.09 percentage point added to the global growth per year.
This report has revealed the ugly face (but truth) regarding longstanding systemic, societal racism and discrimination against minority groups as well as mentioned the key opportunities and challenges in the 21st century.
By using our on-demand Economic Impact Report capability in the SupplierGATEWAY, you can get a big picture of all of your diverse suppliers’ data, including what business category creates the most impact, what geographic regions are being impacted the most, how many jobs your inclusive behavior is supporting. Our system leverages the BEA RIMS II model to analyze and summarize the economic impact of your spend in a comprehensive and user-friendly dashboard.
With so much at stake, we couldn’t emphasize more how seriously businesses should take supplier diversity. Inclusive procurement practices provide an opportunity for local businesses, which in turn encourages employment advancement for minority, women, LGBT, disabled, and veteran-owned businesses. You benefit not only from creating a distinct competitive advantage for your business but also by positively impacting your community.
Want to fully understand your economic impact for any given project? Schedule a demo and see our Economic Impact Reporting App in action!