When organizations do business with small, local companies, they’re doing more than just diversifying their supply chains—they’re creating a powerful economic multiplier effect. That was a theme of the Lab’s 4th Annual Symposium on Responsible Procurement in Higher Education last July. And a new report from Supplier.io reveals just how significant that impact can be.
Analyzing data from over 500 organizations, the 2025 Small Business Impact Report found that $122.7 billion in small business spending generated $202.7 billion in total economic output—a 1.65x multiplier. This spending supported more than 828,000 jobs across the United States, generated $66.3 billion in income for workers, and contributed $23 billion in tax revenues to federal, state, and local governments. These aren’t just statistics—they represent real families earning paychecks and communities thriving.
The Ripple Effect Explained
The report identifies clear winners when it comes to maximizing job creation per dollar spent. Professional, scientific, and technical services topped the list for direct jobs supported, followed by construction and administrative support services.
The report also shows how every dollar spent with small businesses creates three layers of economic impact. Direct impact occurs at the small business itself. Indirect impact happens when those suppliers purchase goods and services from others in their supply chain. Finally, induced impact results when employees spend their wages in their communities—creating a true economic cascade.
For organizations looking to amplify their impact, the report offers a couple of practical recommendations:
- Strategically shift one or two spending categories to qualified small, local suppliers.
- Establish outcome-based key performance indicators that measure jobs and income created rather than just percentage of spend.
To access the complete Supplier.io report, click here.
Resources for small, local businesses
The Lab for Inclusive Entrepreneurship’s website has free resources for small, local suppliers interested in doing business with colleges and universities. These include an AI-powered supplier development chatbot and an online, on-demand module on ‘Doing Business With Higher Education.’ Another online, on-demand module focusing on ‘Sustainable Procurement in Higher Education’ will cover four topics:
Session 1: Understanding Higher Education’s Sustainability Expectations
Session 2: Decoding Sustainability Language and Requirements
Session 3: Assessing Your Current Sustainable Practices
Session 4: Developing Your Sustainability Story and Action Plan
