Last week, ahead of Small Business Saturday, I stopped by Lee’s Flowers on historic U Street in Washington, D.C.— the oldest Black-owned florist in the city. During my visit, I picked up a beautiful floral arrangement and joined millions of Americans who shopped small this weekend to support our local economies.
Together, we contributed a record $23.3 billion to Main Street businesses across the nation, which was a more than $4 billion increase over last year’s Small Business Saturday. Every time we choose to shop small, dine small or entertain small we’re helping to power America’s greatest economic engine.
Small businesses create two-thirds of net new jobs and generate more than 40 percent of our economic output. With their creativity and grit, they define our neighborhoods and build thriving communities in every corner of our nation. At the U.S. Small Business Administration (SBA), we’re working to nurture their economic potential to deliver an equitable and sustainable economic recovery.
Under the leadership of President Joe Biden, we’ve partnered across the federal government to take “shopping small” to a whole new level by transforming how the U.S. government—the world’s largest buyer— spends billions of America’s tax dollars on goods and services each year.
An equitable federal procurement strategy that prioritizes small, disadvantaged businesses will help level the playing field and rebuild our economy from the bottom up and the middle out.
At the centennial of the Tulsa Race Massacre in June, President Biden laid out his vision to open more doors to federal contracting with an ambitious goal: Increase the share going to small, disadvantaged businesses by 50 percent by 2025.
In FY 2020, 1.9 percent of federal contracts went to Black-owned firms while 2.1 percent went to Latinx-owned firms and 3.2 percent went to AAPI-owned firms, even though they represent 9.9 percent, 12.8 percent, and 8.1 percent of all small businesses, respectively. And SBA’s analysis found that half of all small business-eligible contracts went to businesses in just 35 congressional districts in the final year of the previous administration. We must do better.
Buying from small, disadvantaged businesses will leverage the federal government’s purchasing power to reestablish domestic supply chains and Made in America products— using market growth opportunities to strengthen our nation’s industrial base.
It will spur innovation— helping America’s entrepreneurs to develop and bring to market the products and services of the future.
Achieving President Biden’s new contracting goal will be a giant leap forward and make a big difference for many small businesses and communities across the country, putting an extra $50 billion into the hands of America’s small, disadvantaged businesses over the next five years. SBA is rising to the President’s challenge.
We’re disaggregating federal contracting data to track equity across racial and ethnic categories, and advancing reforms that will increase transparency, encourage accountability and, most importantly, drive inclusion in the U.S. government’s small business contracting system.
Included in these reforms is an effort to make certain that “category management,” a government-wide initiative to strategically source commonly purchased goods and services, doesn’t shut out small businesses. We want to make it easier for more small businesses owned by people of color, women and veterans, to do business with the federal government.
To support these improvements, the Biden-Harris Administration is now directing over 40,000 federal contracting officers across several federal agencies to spend tens of billions of dollars more with small, disadvantaged businesses.
In other words, America is about to shop small in a very big way and put equity at the heart of how we do business.
We’re moving to implement these changes quickly to position small businesses for vast opportunities ahead. With the unprecedented opportunities created by the Infrastructure Investment and Jobs Act’s $1.2 trillion in historic investments to upgrade America’s transportation, water, energy and broadband systems, we need to make sure all of our small businesses can get in the door to compete.
The U.S. government spends $560 billion a year on federal acquisitions of products and services— we must ensure those taxpayer dollars are being used to fortify entrepreneurship, innovation and domestic supply chains, and in the process strengthen our democracy by creating equitable pathways to the American dream.
We’re making big changes to deliver on President Biden’s vision and open federal contracting to America’s emerging entrepreneurs. Food, data analytics, solar cells, military uniforms, life-saving biotechnologies and even flowers— the federal government buys it all to fortify America today and tomorrow. We need all our great ideas from everywhere and anywhere working hard for us. And, today, we’re more committed than ever to ensuring the federal government shops small to help our nation build back better than ever.
Isabella Casillas Guzman is the 27th Administrator of the U.S. Small Business Administration. @SBAIsabel