Buying Local in Newark

The city of Newark is New Jersey’s largest and one of its most diverse municipalities and is home to considerable strengths, assets, and opportunities. In partnership with the National Fund for Workforce Solutions, the Newark Alliance is leveraging these resources to advance racial equity and overcome the economic challenges that have mired the city for decades. Buy Newark—a collective local spending initiative—is one way we are working towards that end.

Following a 2014 study on local procurement, Newark’s largest institutions began a concerted effort to grow spending opportunities among Newark-based suppliers. With just a collective shift of 10% from external to local procurement, Newark businesses could see millions of dollars of increased annual revenue. That realization sparked a change among the city’s largest purchasers to support Newark’s minority-owned small business community by localizing spending on a range of goods and services, including construction, IT services, and more.

The benefits of a “Buy Local” strategy for communities are vast and extend beyond revenue. Building upon earlier work by Rutgers Business School, research complied by Rutgers Law School Center for Law, Inequality, and Metropolitan Equity (CLIME) indicates that greater wealth among local businesses brings the capacity for growth, resiliency against financial downturns, and intergenerational mobility. In turn, small businesses are empowered to generate wealth and provide more employment opportunities to local residents.

However, racial discrimination is pervasive in contracting and minority-owned businesses face myriad barriers – including networking barriers, limited access to capital, bonding and insurance barriers, and discriminatory practices (CLIME 2022). As CLIME outlines, “local businesses owned by people of color face a disproportionate range of constraints to growth…Given Newark’s overwhelmingly Black, Latino, and working-class population, contracting barriers are as great for Newark small businesses as anywhere in the nation.”

Enter Buy Newark, a program borne out of the understanding that shifts in local spending among Newark anchors can translate into seismic gains for the local economy. The initiative leverages Newark anchors’ buying power with the city’s local supplier ecosystem – many of which are minority-owned small businesses.

Challenged by the COVID-19 pandemic in 2020, Buy Newark anchor partners identified an urgent need to re-imagine their procurement operations to support local businesses. This urgency translated into a 2021 Procurement Benchmark Study that examined current demand and procurement trends and opportunities among 11 Newark anchor institutions. Notably, the study created individualized spending action plans for anchors to localize their combined $7.6 billion in annual spending. Supplemental Buy Newark research also revealed that Newark anchor institutions could procure approximately 10% of their goods and services from Newark businesses within the next five years.

This work demonstrates that through a shared, data-driven local procurement framework, the Alliance can grow contracting opportunities for Newark’s local and minority-owned businesses. This framework seeks to address the barriers Newark suppliers face in contracting through a combination of interventions, including individualized goal setting, spend data analysis and tracking, vendor matchmaking, and small business development opportunities.

Looking ahead, Buy Newark will continue to urge and empower Newark’s anchors to rethink purchasing policies, practices, and procedures to better engage the city’s vibrant small business community.

You can learn more about the Buy Newark initiative by contacting Milly DuBouchet.

Sibusisiwe Malaba

-- Chief of Policy and Impact, Newark Alliance