Increased Corporate Spend With Local Minority Firms Grows And Sustains Jobs, Report Finds Chicago United issues major progress report on its Five Forward Initiative for regional economic growth Pilot program generated economic impact of $228 million
CHICAGO, April 4, 2013 /PRNewswire/ -- A pilot program to create local jobs and expand the economy through corporate expenditures with area minority-owned businesses (MBEs) generated more than 1,400 jobs and led to a 21 percent rise in total corporate spending with selected MBEs from 2009 to 2011, Chicago United reported today.
The results of Chicago United's Five Forward Initiative were released at a forum held at the Federal Reserve Bank of Chicago. The forum featured a keynote address on economic development by Don Graves, deputy assistant secretary for Small Business, Community Development and Housing Policy at the U.S. Department of the Treasury.
Chicago United, a member organization that advocates for multiracial leadership in business, launched the initiative in 2008 as a pilot to increase spending by mid- to large-sized Chicago-area enterprises with local MBEs, thereby leading to significant regional economic impact. To quantify the economic benefits and impact of this Initiative, Chicago United collaborated with the University of Illinois' Regional Economics Application Laboratory (REAL). Data were analyzed from 2009 through 2011 as reported by Five Forward Committed Corporations. Expenditures by 18 Committed Corporations with 50 MBE partners were analyzed in this survey. This assessment included the direct and indirect impacts including the multiplier effect (i.e., the manner in which a direct expenditure leads to subsequent rounds of spending, and thus total economic impact).
The results of this impact analysis showed that the expenditures by Committed Corporations with their MBE partners generated a direct impact of $227.7 million. About $67 million of these direct expenditures were paid in wages and salaries. This led to the creation of 1,424 jobs.
"This pilot provides a unique model for local and regional leaders to add to their 'tool belt' in developing broader regional economic plans, targeting job creation where it is needed most and ensuring that all parts of our communities have the opportunity to thrive," said Graves, who was the executive director of the President's Council on Jobs and Competitiveness at the White House. "We look forward to further engagement and leadership from committed corporations and their MBE partners in helping to drive economic growth."
According to Chicago United's independent analysis, the number of MBEs with revenue ranging from $15 million to $30 million rose to six companies in 2011 from only one in 2009. Those same companies saw their collective employment numbers grow to 596 in 2011 from 280 in 2009.
This progress report provides guidance for corporations as they implement best-in-class supplier diversity programs that optimize their competitiveness, said Gloria Castillo, president and chief executive officer of Chicago United.
"Minority business owners who participated in Five Forward from the beginning have reported increased revenue, capacity expansion and job growth," she said. "Also, it's very important to note that in 2011, the last year that was analyzed, corporations continued to increase their expenditures with the Five Forward MBEs, even though all companies were making adjustments in order to respond to the recession. This allowed the MBEs to remain in business even while they reduced their expenses. This makes them stronger, better partners for corporations."
The Five Forward pilot launched with the faith of 13 corporations that committed to increasing their expenditures with current or new minority suppliers. Today, there are 28 committed corporations and 109 MBEs that participate in the program. Today, those original 13 companies received Chicago United's first-ever James. C. Tyree Visionary Award for their pioneering participation in the program. Tyree, the late chairman and chief executive officer of Mesirow Financial, drove development of the initiative with his vision and passion. Those companies are:
- Advocate Health Care
- Ariel Investments LLC
- BMO Harris Bank N.A.
- City Colleges of Chicago
- ComEd, an Exelon Company
- Ernst and Young LLP
- Blue Cross Blue Shield / Health Care Service Corporation
- Loop Capital
- McDonald's Corporation
- Mesirow Financial
- Rush University Medical Center
- The University of Chicago/University of Chicago Medicine
Since its creation in 1968, Chicago United has stood for improving the Chicago area through tighter linkages between large corporations and minority-owned business enterprises. This model for strengthening communities has proven to be successful over the generations, regardless of the leadership changes in the private, public, or civic sectors. This year, Chicago United will celebrate its 45th anniversary on November 19 at the Hilton Chicago.
For more information on Five Forward, please visit Chicago-united.org.
About Chicago United
Chicago United is an advocacy organization made up of racially diverse CEOs and executive level management who increase economic opportunity for all races by promoting multiracial leadership development in corporate governance, the leadership pipeline and business partnerships. Through a fierce brand of constructive conversation, Chicago United fosters inclusion and provides an opportunity for senior executives from all racial and ethnic groups to learn from one another, confront and break down racial barriers and achieve shared objectives. For more information please visit www.chicago-united.org.
SOURCE Chicago United