The University of Michigan purchases more than $1 billion of goods and services each year, including everything from desks to transportation and high-tech research equipment. Where we choose to spend that money shapes the structure of our local community and our region as a whole.
As a public institution, the University has an inherent responsibility to promote social change and serve the interests of the community it represents. Many times in the past, our University has recognized this role. In recent years, the University has strengthened ties to local transportation initiatives by stepping forward to make up an operating deficit in the Ann Arbor Area Transit Authority ExpressRide service, ensuring its continued use by employees, students and community members alike. In addition, many dairy and agricultural products used in our dining halls are now purchased from local Michigan farmers.
As members of the Roosevelt Institute — a student-run think tank and advocacy organization on campus — we hope to continue working to ensure our institution fulfills this responsibility. According to a Washtenaw County report, for every $100 spent on purchases from local business an additional $52 stays in the local economy, more than double the amount that gets recirculated when purchasing from a non-local business. This means if the University increased local purchasing by just under 5 percent, it would generate $13.5 million in additional local economic activity. Using the same spending-to-job-creation ratio as Washtenaw County would also lead to the creation of more than 450 new local jobs.
Over the past year and a half, the Roosevelt Institute has worked together with members of the University Procurement Services. Our partnership seeks to create opportunities for local businesses, especially those that are women- and minority-owned, to gain exposure to the University community and interact with the prospective buyers who decide how that $1 billion is spent.
This doesn’t mean that the University can, or should, purchase every good or service from a supplier within 20 miles of our campus. By working together as an institution, however, we can find ways to ensure that we are having a positive impact on our community. And it has worked elsewhere: The University of Pennsylvania, for example, has implemented a series of plans that has increased their local spending every year since 2011 and bought their total local spending to more than $100 million, creating an estimated 200 jobs and $6 million in area wages that otherwise would not exist.
As a result of the work between the Procurement Office and Roosevelt Institute, we’ve taken a step forward. The University held its first Diversity and Small Business Supplier Fair on Thursday, Oct. 27 in the Michigan League. The event was co-hosted by the Procurement Office and Roosevelt, with additional support from the Procurement Technical Assistance Center, which is housed within the Institute for Research on Labor, Employment and the Economy within the University.
At the event, 30 small business suppliers from across southeast Michigan had the opportunity to meet with purchasing teams from across the University’s different departments. This allowed these companies invited to gain exposure to the University community and interact with current customers and prospective buyers. It also offered businesses an opportunity to meet with representatives from PTAC, who provide training and technical assistance for client companies to gain access to, win and execute federal, state and local government contracts. In a follow-up survey, suppliers who were in attendance gave very positive feedback. Almost all said they would welcome the opportunity to be a part of an event like this again.
“We must seek partnerships that infuse our economy with talent and energy, and build an appreciation for our region’s heritage as a place of past and future innovation,” University President Mark Schlissel said at his inaugural address. As a university, we can help achieve this vision by continuing to find ways to engage with our region’s diverse businesses and entrepreneurs.
Dominic Russel and Ruby Kirby are co-presidents of the Roosevelt Institute at the University of Michigan. Russell is an LSA senior and Kirby is a Public Policy senior.