Categorized As:Regional Direction
Economy League Identifies Opportunities for Philadelphia Businesses
The Economy League of Greater Philadelphia is proud to share preliminary findings from the first-ever Philadelphia Local Supplier Landscape Study, based on FY2018 purchasing data from nine anchor institutions (Community College of Philadelphia, Children’s Hospital of Philadelphia, Drexel University, Penn Medicine, Temple University, Temple University Health System, Thomas Jefferson University and Health System, University of Pennsylvania, University of the Sciences).
Philadelphia Anchors for Growth and Equity (PAGE) is a partnership between the Economy League of Greater Philadelphia (Economy League), the City of Philadelphia and more than a dozen Philadelphia-based institutions that works to grow Philadelphia businesses, strengthen the local economy, create jobs, and build wealth by increasing institutional local purchasing. PAGE was launched with a 2015 research report in the Philadelphia Controller’s office which identified a $530 million opportunity for localizing anchor spending. PAGE members aim to capture at least 25% of this half-billion dollar opportunity, in order to create 1,250 new manufacturing jobs and 4,000 indirect jobs in Philadelphia.
The Economy League’s findings identified several local supplier opportunities. First, most local anchor suppliers only sell to one or two anchor institutions. Existing anchor suppliers have an opportunity to build on their relationships and access business within additional hospitals and universities.
Next, most local anchor spend is captured by construction companies. Anchors have an opportunity to grow their spend with local businesses in the next five biggest industry categories: Professional, Scientific & Technical Services, Accommodation & Food Services, Wholesale Trade, Information, Retail Trade, Manufacturing.
Finally, local hospitals and universities have an opportunity to grow their engagement with diverse suppliers. Currently, only 10% of all suppliers have at least one diversity designation. Anchors can aim to grow the number of diverse firms employed within Philadelphia.
Anchors utilize a total of 1,424 unique local suppliers. However, only 150 local suppliers sell to three or more anchors.
On average, suppliers utilized by anchors are larger and more established than Philadelphia businesses in general. Anchor suppliers have a median revenue of $236,900 (compared to $80,600 for all Philadelphia businesses), 5 employees (compared to 2 employees) and are 11 years old (compared to 5 year in business).
In terms of number of local suppliers, the most common type of local supplier utilized by anchors is Professional, Scientific & Technical Services enterprise, with 20% of local anchor suppliers falling into this category. Accommodation and Food Services is next in terms of most frequently used type of supplier at about 14%. The next three most common categories are Wholesale Trade, Management and Remediation Services, and Retail Trade.
However, spend data* shows that 78% of all local spend is spent with construction companies. This is followed by Professional, Scientific & Technical Services (13% of total spend) and Accommodation & Food Services (3%). When looking at the number of local firms employed, the Construction spend is spread among only 19 firms, while the Professional, Scientific and Technical spend is distributed among 83 firms. *Note: the spend data only represents four anchors.
The study shows that 10%* of all local and regional businesses utilized by anchors carry at least one diversity designation. The most common designation is women-owned (5.9%), followed by minority-owned (3.3%).*Note: Because there is no single database tracking diversity certifications, this estimate is likely low.
This graph shows the types of suppliers most commonly utilized by anchors compared to the overall distribution of suppliers in the city of Philadelphia.
Want to connect your business to anchor opportunities? Join us on December 12th to connect with anchor opportunities!
The Economy League is hosting Philadelphia Anchors for Growth and Equity Summit on Thursday, December 12th to help local suppliers take advantage of the opportunities within anchor supply chains. The goal of the event is to create a space for local businesses build relationships with hospital and university buyers and connect to opportunities within anchor supply chains.
For more information or to purchase tickets please visit the PAGE Annual Summit Ticket Site
Please email Mariya Khandros with questions at email@example.com.
We hope to see you there!