It takes incredible strength and daring to start a small business from the ground up and help it grow and flourish. It’s even more challenging when the odds are stacked against you because of your race, ethnicity, socioeconomic status, or other factors.
I feel very lucky to play a small part in helping those business owners thrive through the Independence Blue Cross (IBX) supplier diversity program. Partnering with organizations that reflect the diversity of the communities and neighborhoods we serve is one of the best ways we can support our local economy.
People often ask me why I believe supplier diversity is important. There are many answers to that question, which is why we’ve been sharing some personal stories from our suppliers — like Alpha Business Solutions, The Mendoza Group, and Direct Choice. But I’d like to take some time to explain how supplier diversity benefits our city.
1. It Builds the Economy
Knowing whether our business strategy is succeeding can be difficult, so measurement is critically important. Last year, we looked at the economic impact of the supplier diversity program at IBX and our affiliates during 2022 and were encouraged to see significant growth.
In 2022, when we last commissioned an economic impact study, our organization’s hiring of diverse suppliers had contributed to the national economy in a meaningful way. In fact, Independence Health Group — parent company to Independence Blue Cross and affiliates —saw an 87 percent increase in economic output resulting from the organization’s national spending with diverse suppliers.
Furthermore, in 2023 our ongoing commitment to economic equity included $317 million spent with diverse suppliers, up 13 percent from 2022. Since 2020, IBX and affiliates have spent more than $1 billion with businesses owned and controlled by women, veterans, people of color, and members of the LGBTQIA+ community.
In addition to our work with diverse suppliers, our organization is committed to working with diverse investment organizations. As of 2023, IBX and its affiliates had invested 19.6 percent of its total $4.6 billion in corporate assets with diverse asset managers.
Incorporating a diverse and inclusive supply chain is an important factor in creating economic equity and benefits the local socioeconomic communities. We hope to move the needle from a diversity, equity, and inclusion perspective by seeking diverse suppliers organically and through diligent sourcing. Empowering diverse suppliers is directly correlated with the economic health of the community.
2. It Supports Minority-Owned Businesses
In 2020, IBX established an African American Supplier Mentoring Program with eight of our active suppliers. While it initially was meant as a chance for suppliers to network with and mentor each other, it grew into an opportunity to bring executives and thought leaders from community organizations into our meetings — expanding business opportunities not just for the suppliers, but also for the community.
In 2020 alone, the program increased supplier spending by $3 million. And as of 2022, that network has grown and increased spending across the region by $23 million. And this is just one example.
We also participate in the Philadelphia Anchors for Growth and Equity (PAGE) Initiative through the Economy League of Philadelphia and the Diverse Procurement Collaborative through the Chamber of Commerce for Greater Philadelphia. Both programs promote mentorship and networking and strive for 10 percent spending increases with diverse suppliers in the area.
Initiatives like these are worth the investment. They create opportunities for the community by promoting new and innovative products and supporting local, diverse, inventive businesses.
3. It Encourages Other Organizations to Support Supplier Diversity
Practicing supplier diversity makes you a competitive leader in the marketplace, allowing for a more flexible and adaptive approach to meeting client needs and making businesses more resilient during times of market disruption.
Diverse suppliers support us in maintaining customer retention and encouraging growth. When other organizations can see the meaningful business impact it can have, it encourages them to follow these practices, too.
One of the most gratifying pieces of our work is supporting organizations as they develop their own best-in-class Supplier Diversity Programs. After more than three decades of focused effort, we have insight to share about key elements like setting financial goals and tracking, mentoring, and networking, and championing policies that advance diverse businesses.
IBX is a community leader in this space, and it’s rewarding to be both an ally and a consultant to businesses and community organizations alike.
Looking Forward to Even More and Better Outcomes
I am incredibly proud of the growth we’ve achieved within the organization and the impact we have made on our communities. A commissioned study of our economic and social impact for 2022 showed our hiring of diverse suppliers created 1,920 jobs* paying $137.8 million* in salaries and benefits and generating $51.4 million* in federal, state, and local tax revenue.
Amidst this impact, I know there is still so much more we can do. From creating financial literacy resources to supporting access to capital, the opportunities are boundless.
And that extends to our peers. I truly believe that the more we can encourage regional collaboration, the more we all benefit. There are so many untapped opportunities to get our business community engaged in supplier diversity.
By helping one another develop this type of foundational programming, we can support suppliers from all industries and backgrounds. So, follow along as we share more supplier diversity stories throughout the year. And get inspired!
*Includes direct activity; indirect impacts, like spending on goods and services purchased within a given region; and induced impacts, such as spending resulting from labor income generated by the initial activity that ripples throughout the region.
