A recent report reveals that in 2023, more than 300 companies spanning various industries collectively invested over $160 billion to diversify their supply chains, resulting in the support of over 1.3 million jobs.
The “Supplier Diversity Economic Impact Report – 2023,” published by Supplier.io, a diversity and ESG data provider, sheds light on the significant economic contributions of supplier diversification efforts. Participating companies generated $104 billion in income and contributed $31.4 billion in tax revenues by engaging with diverse and small suppliers over the past year.
Aylin Basom, CEO of Supplier.io, emphasized the strategic importance of responsible sourcing, noting that 97% of enterprise executives continue to endorse supplier diversity programs. Basom highlighted that investing in small and diverse suppliers not only fosters innovation and strengthens supply chain competitiveness but also mitigates risks and reduces costs.
The report reveals that total spending on diverse and small suppliers reached $160.1 billion, with diverse supplier spending at $33.4 billion and small supplier spending at $126.8 billion. This substantial financial support directly translated into the creation of over 726,000 jobs and more than $60 billion in income.
The economic impact of supplier diversification by participating companies totaled $286.8 billion. Of this, $160.1 billion had a direct impact on businesses, $60 billion had an indirect impact (measuring the effects on suppliers to meet incremental spending), and the remaining $66.7 billion had an induced impact (measuring household spending on items like food, clothing, and cars).
In terms of direct spending on small and diverse suppliers, the professional, scientific, and technical services category topped the list at $35.7 billion, supporting over 201,000 jobs. Wholesale trade came second with $18.3 billion in direct spending, while construction recorded the third-most direct spending at $16.1 billion, supporting over 97,000 jobs.
The report identified California as the U.S. state with the highest spending on diverse and small businesses, totaling $22.9 billion. This investment supported over 196,000 jobs and generated more than $18.1 billion in total income.
In contrast, the Virgin Islands had the lowest level of diverse and small business spending at $5.6 million, significantly trailing behind the second-lowest spender, Alaska, by over $176.6 million.
Supplier.io’s inaugural Supplier Diversity Economic Impact report analyzed data from 326 organizations that collectively spent over $160 billion across more than 124,000 unique suppliers.
