New Survey Quantifies Broad Economic Impact of Investments in Newark Small Businesses

On Jan 16, 2015

The Initiative for a Competitive Inner City (ICIC) released a new study that found that if six major Newark anchor organizations collectively increased their procurement from local small businesses from 2 to 10 percent, an additional $33 million would flow into the city’s local businesses annually. The research was funded by a grant from The Prudential Foundation, whose mission in part is to revitalize and transform urban areas, including its hometown of Newark.

ICIC found that in 2013 six anchor organizations—including New Jersey Institute of Technology (NJIT); New Jersey Performing Arts Center (NJPAC); Panasonic Corporation of North America; Prudential; Rutgers School of Biomedical and Health Sciences; and Rutgers University-Newark — purchased $27.2 million in goods and services from local small businesses in Newark, which represents more than three percent of their total budgets. Newark is home to 13,515 small businesses.

“There is tremendous momentum in Newark for a robust, local procurement strategy,” explained Kim Zeuli, senior vice president and director of the research and advisory practice at ICIC. “Many of Newark’s anchors are already engaged in supporting small businesses and several small business organizations are poised to support a multi-anchor program. Newark could lead the nation with this type of innovative effort.”

ICIC also found a need for stronger coordination among the organizations that support entrepreneurs and small businesses in Newark, as well as a need for increased investment in programs to help small businesses scale.

The study’s release coincides with the Newark Small Business Summit on January 14, which was hosted by Prudential Financial and the City of Newark. Mayor Ras Baraka unveiled his plans for supporting small business development and growth in the Newark area. Prudential executives, including Chairman and CEO John Strangfeld, participated in the summit, speaking about the importance of investing in Newark and surrounding communities.

“Prudential’s participation in the Small Business Summit and its funding of ICIC’s ongoing research is part of its larger commitment to revitalizing Newark and recognizing the impact that small businesses have on local economies.” said Lata Reddy, vice president of Corporate Social Responsibility and president of The Prudential Foundation. “We know that our success as a company is inextricably linked to the growth and endurance of the small businesses around us, and we’re proud to support them.”

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