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Buy Newark: A Guide to Promoting Economic Inclusion through Local Purchasing. Developing institutional policy priorities, building the capacity of local businesses, and cultivating relationships are the keys to implementing a successful Buy Newark effort.


  • 1. Buy Newark:A Guide to Promoting Economic Inclusionthrough Local Purchasing

2. PolicyLink is a national research and action instituteadvancing economic and social equity byLifting Up What Works.Find this report online at by PolicyLinkAll rights reserved.Design by: Leslie YangCover photos courtesy of (from left to right): The Star-Ledger; Brick City Development Corporation;; The Star-Ledger.Photos courtesy of (from left to right): p.2: The Star-Ledger; p.8: The Star-Ledger, p.12: Brick City DevelopmentCorporation; p.18:; p.32:; p.40: The Star-Ledger. 3. Buy Newark:A Guide to Promoting Economic Inclusionthrough Local PurchasingSolana RicePOLICYLINK 4. PolicyLinkTable of Contents4From the PolicyLink Founder and CEO5From the Brick City Development Corporation Executive Director6Executive Summary9Introduction13 Buy Newark: The Power of Local Purchasing19 Buy-Local Strategies, In-Depth33 Buy-Local Strategies in Action41 Bringing Local Purchasing to Scale: A Coordinated Buy Newark Initiative43Conclusion44Appendix46Notes47Acknowledgments Buy Newark 3 5. PolicyLinkFrom the PolicyLink Founder and CEODuring these uncertain times, many cities across Newark. Participants expressed the need tothe country are exploring new strategies for address entrepreneurship and employment byensuring a strong, inclusive economic recovery.supporting small and mid-sized business growth.Often, one source of untapped potential isright under their nose: a multitude of small Spurred by those conversations, and reflectingand mid-sized local businesses hungry for newa concern for greater equity in economicopportunities. Redirecting even small amountsdevelopment planning, this guide outlinesof our collective buying power to qualified localsteps for expanding local economies throughenterprises could give local economies a whole coordinated citywide efforts. It offers numerousnew outlook. Buy Newark: A Guide to Promotingdescriptions of specific procurement strategies,Economic Inclusion through Local Purchasingand five in-depth case studies drawn fromsuggests that Newark, New Jersey, could be the around the country and the world.testing ground for such a new kind of initiative. It is hoped that this guide will serve as a toolNewark, a mid-sized, post-industrial city with a for creating a more prosperous, just, andpopulation of 277,000, the majority of whom arefair economy in Newark and beyond.people of color, has been grappling with highunemployment yet is fertile ground for a coordinatedlocal procurement effort. By encouraging localpurchasing of goods and services, companiesand institutions based in Newark can help totransform small businesses, foster employment, Angela Glover Blackwelland strengthen Newark neighborhoods. Founder and CEO PolicyLinkIndeed, this report grew out of a series ofconvenings hosted by the Prudential Foundationto address issues of economic inclusion in4 Buy Newark 6. PolicyLinkFrom the Brick City DevelopmentCorporation Executive DirectorBrick City Development Corporation (BCDC) was BCDC offers a range of services for small businesses,formed under the leadership of Mayor Cory A.including access to capital and technical assistance.Booker to be the primary economic development As a recently designated Community Developmentcatalyst for Newark, New Jersey. We are organized Financial Institution (CDFI), we are excited toto retain, attract and grow businesses, enhance have the opportunity to find new mechanisms tosmall and minority business capacity, and spur real expand our lending capacity and support servicesestate development within the city. BCDC works to for small businesses. BCDC also provides Newarkactualize Mayor Bookers vision of making Newarkbusinesses with an opportunity to connect andAmericas leading city of urban transformation. network through events and workshops.Development is now on the rise: new businessesare sprouting, construction of two new hotels isEncouraging local purchasing can build on aunderway near the Prudential Center, and we havestrong portfolio of BCDC services that could helphad significant office and industrial business attraction local businesses to operate more profitably inannouncements. Newark is on a strong trajectory;Newark. This guide is intended to support thoseand one groundbreaking at a time, we are working to firms, institutions, and agencies interested in localtake projects through the Pipeline to the Finish Line.purchasing and procurement. We appreciate thework of PolicyLink and the collection of ideasWith this renewed sense of possibility comes an presented herein. We will work on implementationopportunity to prove that a more inclusive economystrategies that will position Newark as a leaderis not only possible, but is also the cornerstone of ain sustainable economic development.more stable, prosperous, and vibrant city. BCDC isproud of its role as an economic development catalystin this new economy. We are committed to supportingthe growth and development of small businesses inNewark. BCDC has provided over $13 million in loans Lyneir Richardsonfor local businesses. Recognizing that small, minority Executive Directorand womenowned business enterprises (S/M/WBEs) Brick City Development Corporationare important in Newarks economy, BCDC works tosupport many S/M/WBEs to open or expand in our city. Buy Newark 5 7. PolicyLinkExecutive SummaryS mall, locally owned businesses are the bedrockof thriving economies. They employ millions ofpeople, they invest in their neighborhoods and cities, What are the benefits? For the city, directing more money to locally owned businesses fosters job creation and boosts tax revenue,and they provide wealth-building opportunities for while keeping profits local where they can beentrepreneurs. A dollar spent at a locally owned reinvested in the community. This can attractbusiness stays in the local economy longer thanmore businesses and residents to Newark. Fora dollar spent with a company whose roots liepurchasers, doing business with local contractorselsewhere, and it has a greater ripple effect. can result in faster, less expensive, and more personalized service. It can garner goodwillThis guide is designed for Newark, but it is usefulin the community. And it can save money.for any purchaser or community seeking toimprove local buying power.Newark has the building blocks to launch a strong buy-local initiative. Several of NewarksAny purchaser can start a buy-local program corporations and institutions already have localand this guide explains how. We also describeprocurement policies, many local businesses standhow a coordinated citywide effort that marshalsready to expand, and organizations are in place tothe buying power of major businesses, anchor provide small business assistance and support.institutions, and public agencies to increaselocal buying can be a critical component ofBuying local is a potent economic developmenta citys economic growth strategy. Newark, tool, but achieving results requires deliberatehome to several large corporations, hospitals, action, supportive policies, and coordinationand universities, is well positioned to realize theamong stakeholders. Buy Newark: A Guide tosignificant benefits of a buy-local initiative.Promoting Economic Inclusion through Local Purchasing offers a roadmap for creating a program in a single company or institution andTERMSfor building momentum for a citywide effort.The terms local procurement and localThe guide presents strategies gleaned from bestpurchasing are used interchangeably in thispractices around the country and to mean the directing of institutional,governmental, corporate, or business expensesThe strategies described fall under threefor goods, services, and contracting to locallybroad categories, which form the foundationbased businesses. Buying local is a somewhat for successful local procurement:broader term that can also include individualconsumer purchases, but for this guide buying 1. Institute Formal Local Preferences. Theselocal generally refers to the adoption of local organizational policies establish buying localprocurement and purchasing policies and/or a as a priority. They demonstrate commitmentcoordinated campaign to promote such policies. from the top levels of an organization, guideThe term buy-local initiative will refer to aprocurement practices, and make managers andcitywide, coordinated policy agenda, while the staff accountable for success.term buy-local policy will refer to individualpurchasers practices. 2. Build the Capacity of Local Businesses. A buy-local effort can work only if local firms6 Buy Newark 8. PolicyLinkare able to provide needed goods and services Recommendations for aand are sound and sophisticated enough towork with large purchasers. Corporations andCoordinated Buy Newark Initiativepublic agencies can do a lot to groom local firmsfor bigger contracts and to connect them with Develop a citywide plan for implementationemerging opportunities. and partnerships that will share, coordinate,and support individual firms procurement3. Cultivate Relationships with the Localstrategies. The plan should coordinate diverseBusiness Community. Purchasing is often stakeholders to inventory ongoing practices, exposeabout relationships, and purchasing agentschallenges, identify strategies for implementingneed to actively build positive, productive private and public policies, and track the impactrelationships with local firms. Purchasersof the collective effort. This process should ideallycan also take creative steps to make theirresult in designating one or two organizations toprocessesfrom structuring contracts to facilitate partnerships, maintain a robust businessbidding to paymentssmall business-friendly.database, and organize campaign marketing andTo unleash the power of buy-local strategies in outreach. The plan should also lay the groundworkNewark, the following recommendations are for how to finance and sustain these activities.offered for both institutional and corporatepurchasers interested in starting a program inSupport specific local procurement strategiestheir organizations and for people interested by providing assistance to individual firms andin coordinating a citywide initiative.agencies in developing buy-local strategiesand goals that fit their needs and resources.Recommendations for PurchasersDevelop supportive policies. Create policies,and Procurement Offices practices, and outreach in the private, public, andnonprofit sectors that make contracting with smallbusinesses and local businesses easier. The City ofIdentify internal and external stakeholders Newark and other public agencies can play a keywho can commit to changing policies and role in integrating local hiring and purchasing inpractices. Bringing people together can future development involving public subsidy as wellbe critical in identifying challenges and as in identifying current contracting opportunities.coordinating solutions across an organization.Communicate success. Measuring andDefine local. Individual purchasers may differcommunicating success is an important part ofin how they determine what it means to be a maintaining and growing a buy-local located in the city of Newark. SomeLift up early adopters of the buy-local programcompanies have one location in Newark but are for promotion. Consider complementing aheadquartered elsewhere. Finding a definition purchasing initiative with a campaign thatthat is precise, but easy to measure, such as a includes retail and consumer goods. This is alocal business license or evidence of local tax great way for residents to also support localreceipts can facilitate ease of evaluation, but businesses that are not serving as direct suppliersmay detract from overall deep local larger institutions or other businesses.Establish goals and reporting to measurepotential impact on organizational returnand the local economy. Buying local is not charityand in many cases can improve the bottom line forlarge firms and institutions. Tracking and reportingwill also indicate the effectiveness of your efforts.Buy Newark7 9. PolicyLink8 Buy Newark 10. PolicyLinkIntroductionIn good economic times or bad, buy-local policies are a boost for purchasers, local businesses, andcommunities. Today, with resources stretched thinand just 2 in the 1996-97 school year.1 The effectsof these policies reverberate in a community,stimulating job growth and more a protracted economic downturn, buying localcan leverage a citys purchasing power to helpLocal vendors are more likely than distantrevitalize the local economy for the benefit of all.corporate suppliers to reinvest revenues in thecommunity, by, for example, hiring residents orThis guide, intended for the civic, business, and contracting with other local companies. A studypolitical leaders of Newark, is useful in any in Chicago found that local businesses boughtcommunity interested in sustainable economicgoods locally at twice the rate of national firms.2development. It explains the basics of how to Additionally, because local suppliers are oftenembark on a potentially transformative way of minority-owned, buy-local policies will help spreaddoing business. the economic benefits to communities hit firstand hardest by unemployment and recession.Small businesses are the backbone of ourAs the chart on the next page depicts, Newarknational and local economies. Between 1993unemployment rates have hovered betweenand the fourth quarter of 2008 (the most recent 15 and 16 percent for the last three years; adata available), small businesses, with 500 orshift toward local purchasing could be a bigfewer employees, created 13.3 million jobs, boost for small businesses that hire locally.that is 64 percent of all net jobs created duringthat period.As small businesses thrive and expand, they andtheir employees contribute to the local tax base. ASource: U.S. Small Business Administration. healthy tax base, in turn, supports improvementsto blighted streets and commercial districts,Buy-local policies redirect institutional, corporate, more police, better schoolsin short, the fulland business-to-business spending to community- array of services and amenities that attract newbased, locally owned companies. The spending canresidents, bolster business activities broadly, spurbe for any good or service, from crews for a majorfurther investment, and nourish a citys project to janitorial services to basicWith its business, cultural, and geographic assets,office supplies such as ink cartridges or toilet paper. Newark is poised to take advantage of thisThe most notable example within recent years is innovative approach to economic revitalization.the shift that schools, universities, hospitals, andsome grocers and restaurants are making towardBuying local can improve the bottom line forl...