One Percent Shift in Procurement Could Mean Thousands of Jobs for San Diegans

One Percent Shift in Procurement Could Mean Thousands of Jobs for San Diegans

San Diego Regional EDC study quantifies the impact of increased local procurement

Editor's Note: To support an equitable economic recovery from the pandemic, SDG&E has partnered with the San Diego Regional Economic Development Corporation (EDC) to launch an initiative to help sustain and grow local, small and diverse businesses. Through a series of “Right Recovery Town Halls” and the formation of a collaborative, the initiative aims to rally large local employers to redirect more of their spending on goods and services to local small businesses.

In 2020, one in three small businesses in the region closed down, disproportionately impacting people of color. Read the press release below to learn more about the initiative and the findings of a new study that reveals that anchor businesses, such as SDG&E, local hospitals and universities, contracting with small, diverse businesses can have a major impact in growing an inclusive regional economy.

San Diego (Jan. 28, 2021) – Today, as part of a commitment to inclusive economic recovery, San Diego Regional EDC released a study and set of recommendations for large employers to support small businesses by buying local. Anchor Institutions: Leveraging Big Buyers for Small Business analyzes the spend of more than a dozen local anchors and demonstrates the impact of increased local procurement on quality job creation.

Anchor institutions are defined as universities, hospitals, local government agencies, the U.S. Navy and other large employers that are physically bound to the region.

In San Diego, anchors represent eight of the region’s 10 largest employers—providing more than 72,000 jobs. They purchase tens of billions of dollars in goods and services every year, and yet, local anchors send about one-quarter of all procurement spend outside the region.

The web-based study——includes a summary of local spending, a cluster map of anchor institutions in the region, estimated economic impact from increased local spending and a set of recommendations for growing quality jobs across San Diego through procurement.

The COVID-19 pandemic has disproportionately impacted people of color and spurred the closure of one-in-three small businesses across San Diego. Local small businesses employ nearly 60 percent of the total workforce, which is double the national average, and are responsible for nearly half of all job growth in the last five years. Despite their critical importance to the region’s economy, many small businesses report struggling to attract customers and generate new sales.

“Small business resiliency will be key in getting this recovery right. This report further demonstrates the importance of connecting our region’s small and diverse businesses to large, institutional buyers,” said Eduardo Velasquez, Research Director, San Diego Regional EDC. “This will mean more quality jobs for San Diegans, more thriving businesses and a stronger regional economy.”

Key Findings

  • Collectively, 14 anchors surveyed spend more than $9.9 billion each year on a range of goods and services, and only about $247 million of this reported spend can be traced back to San Diego businesses. Further, only a small proportion of this spend is reaching local small (14 percent) and minority-owned or diverse businesses (11 percent).
  • Small shifts in procurement mean can big economic impact:
    • If the 14 anchors surveyed increased local construction spending by just one percent, it would put around $32 million into local construction businesses, adding $466 million to the local economy and helping create nearly 4,500 jobs in the region.
    • The same one percent increase in professional services (e.g. legal assistance) spending would pump nearly $12 million into local suppliers, resulting in an economic impact of nearly $56 million and support another 800 jobs.
    • The majority of these new jobs would be in industries with a higher-than-average concentration of quality jobs (those that pay middle-income wages).

“As a large employer that works with many diverse suppliers to meet our mission of delivering clean, safe and reliable energy, SDG&E understands the value small businesses bring to the regional economy,” said Christy Ihrig, vice president of operations support, SDG&E, anchor event and study sponsor. “When they thrive, our region thrives. To support economic recovery from the pandemic, we are more committed than ever to grow our supplier diversity program and encourage other local employers to do the same.”

Beyond impacts to suppliers and the regional economy at large, anchor institutions that buy from local, small, diverse businesses also stand to benefit. Specifically, several local anchors note that setting goals for greater procurement from these suppliers has resulted in greater customer service, supply chain diversity and resiliency, and stronger brand equity in the communities they serve.

"‘Shop local’ is about more than individuals; it means big business and organizations choosing to support their neighbors by buying in their communities. The City of San Diego takes pride in its efforts to work with local companies, is seeking increased opportunities to buy local and implores other local organizations to follow suit. Together, this is how we ensure a more equitable and inclusive San Diego,” said Mayor Todd Gloria, City of San Diego, study sponsor.

A Call to Action

To maintain our regional competitiveness, we need to create 50,000 quality jobs in small businesses by 2030, as outlined in EDC’s inclusive growth strategy. To do that, we must help San Diego’s small and diverse businesses recover and thrive.

San Diego needs its largest employers (and our largest buyers) to commit to redirecting their procurement to local, small, and diverse businesses. To do this we must: 1) understand individual institutions’ existing efforts; 2) identify spend areas with high potential for inclusive, local sourcing; and 3) define and track metrics that ultimately drive bidding processes. We invite large firms to join San Diego Regional EDC’s Anchor Collaborative and help us shape and achieve this goal—join us here.

The report was produced by San Diego Regional EDC and will be unveiled today at the first in a series of Town Hall events. The study is sponsored by SDG&E, City of San Diego, Civic Community Ventures, and the University of San Diego School of Business.

Read the full study at, and learn more about EDC’s inclusive growth goals here. For more research from San Diego Regional EDC, visit

About San Diego Regional Economic Development Corporation

San Diego Regional EDC mobilizes business, government and civic leaders around an inclusive economic development strategy in order to connect data to decision making, maximize regional prosperity, enhance global competitiveness, and position San Diego effectively for investment and talent.