Six Large Corporations Aim to Boost Economy with New Supplier Program

Washington, September 14, 2010

New website provides one-stop shopping, simplified application process, for small businesses seeking to become suppliers to large companies; Experts suggest program could help accelerate economic recovery

A consortium of large businesses in a variety of industry sectors today announced a new way for small businesses to compete with greater ease to sell goods and services to global companies, potentially leading to the creation of new jobs and economic growth.

AT&T (NYSE: T), Bank of America (NYSE: BAC), Citigroup (NYSE: C), IBM (NYSE: IBM), Pfizer (NYSE: PFE), and UPS (NYSE: UPS) have agreed to standardize and simplify the application process required for qualified small and mid-sized U.S. suppliers to undergo, as they compete for nearly $150 billion in contracts collectively awarded by those companies every year. 

To facilitate this, the participating companies will establish a free, public website, created and maintained by IBM through a grant of more than $10 million from the IBM International Foundation. The site, to be named "Supplier Connection", will provide visitors with a single, streamlined electronic application form. Small vendors need only complete the application form once to potentially become suppliers to the participating companies. They will be able to more easily connect for opportunities to sell services, marketing, food, human resources, and construction, among others. 

Currently, it can be challenging for small businesses to apply as potential suppliers to large companies, as the process can require significant investments of time, money and expertise. The application forms, formats and requirements of each company can vary, making it difficult for smaller suppliers to pursue business with a single large company, let alone multiple global companies. The Supplier Connection Web site aims to accelerate and streamline the application process leading to increased contracting with small and medium sized firms. 

In a recent study, NY-based Center for an Urban Future documented that small businesses often experience a dramatic increase in revenues and significantly increase their workforce after becoming a supplier to a large corporation. [1]

"Most of the small businesses we interviewed more than doubled their revenues and added a significant number of jobs since first becoming a supplier to a large company. Breaking into the supply chain of a big corporation can be transformative for small businesses," said Jonathan Bowles, Director of the Center for an Urban Future. "Small businesses almost single-handedly sparked the economic recovery during the nation's two previous recessions. We need them to do it again in these tough economic times. That's why I was so encouraged to hear about these large companies stepping up and taking such dramatic steps to provide a lift to small businesses and help reignite the economy."

The Supplier Connection Web site, which is expected to launch in the first quarter of 2011, will enable access by qualified firms to connect for opportunities where the participating companies conduct business. Consequently, qualified firms will more easily have the opportunity to reach not only the U.S. markets, but potentially nearly 200 countries - the number of places worldwide where the participating companies operate. 

As the program advances, it is expected that many large businesses will sign up and many small companies will benefit. The Web site will enable small suppliers to learn from, collaborate with, and sell to each other so that they can become more competitive and successful. It will offer the participating companies a mechanism for sharing valuable business information with these prospective small and mid-sized suppliers. Large companies will also have easier access to small, innovative companies that generate new products and services. 

"We work with businesses of all sizes," said Amanda Neville, a partner at Thinkso Creative, a New York City design and marketing agency with just over 10 employees. "But we've been reluctant to spend the time and resources it takes to complete the lengthy application processes required by some large corporations for new vendors. We'd rather focus on serving our clients through stand-out work."

"As a busy small business, we can't spend a lot of time jumping through hoops to apply for new business that we may or may not win. I'm an expert on event planning and catering, not corporate bureaucracy," says Alison Bates Fisher, senior events designer at Main Event, an Arlington, VA catering company with approximately 30 employees. "If there was an easy way to for me to streamline the application process, I would take advantage of it."

The program announced today is consistent with the U.S. Administration's goal of increasing U.S. exports. Small businesses comprise 97 percent of all U.S. exporters, according to the U.S. Commerce Department. 

In fact, small businesses are the heart of the U.S. economy. Between 1993 and 2008, small businesses created at least 65 percent of new private sector jobs, according to the U.S. Small Business Administration. Meanwhile, the U.S. Commerce Department says that small firms in the United States comprise 99.7 percent of all employer firms, provide jobs to fully half of all private sector employees and pay 44 percent of the private sector payroll.

"Everyone says that small business is the engine for economic growth. We believe opening up new markets for goods and services, in the billions of dollars spent by large companies can be the fuel that will allow those small businesses to grow," said Stanley S. Litow, IBM Vice President of Corporate Citizenship & Corporate Affairs, and President of IBM's Foundation. "I liken the mechanism we're unveiling to a Universal College Application, which simplified the way in which students could spend less time filling out redundant forms, and focus more on academic excellence. That's what we're trying to do here - let small businesses do what they do best, grow their businesses and not get bogged down in red tape."