THE ECONOMIC IMPACT OF CDW’S BUSINESS DIVERSITY PROGRAM IN 2020
Economic impact modeling is
a standard tool used to quantify the economic contribution of
an investment or company.
This modeling uses an “Input-Output” economic model to estimate the number of times each dollar of “input,” or direct spending, cycles through the economy in terms of “indirect and induced output,” or additional spending, personal income
and employment.1
There are several Input-Output models used by economists to estimate multiplier effects. supplier.io employed the IMPLAN input-output model in developing estimates of spending, income and employment impacts. This model, initially developed by the U.S. Department of Agriculture, examines
inter-industry relationships in local,
regional and national economies.
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An Input-Output model uses a matrix representation of a nation’s interconnected economy to calculate the effect of changes in spending by consumers, by an industry,
or by others, on other industries and the entire economy.
This matrix representation and the related Input-Output tables ultimately measure “multiplier effects” of an industry by tracing the effects of its inter-industry transactions – that is the number value of goods and services that are needed (inputs) to produce each dollar of output for the individual sector being studied. In essence, an Input-Output model is a table that shows who buys what from whom in the economy.2
REFERENCES:
1. U.S. Government Revenues:
http://www.usgovernmentrevenue.com/total_2014USr t_17rs1n
2. United States GDP:
http://www.tradingeconomics.com/united-states/gdp
This report is based on an analysis of data provided by CDW using IMPLAN’s Input-Output multipliers, and the supplier diversity information in supplier.io’s database of nearly 1.6 million active certifications.
MULTIPLIER EFFECT
CALCULATION METHODOLOGY
When conducting the Multiplier Effect analysis, supplier.io used the 2020 spending by CDW with its minority-, women-, LGBTQ+- and veteran-owned businesses as the direct spending or “impact.” An important note regarding assumptions for the geography of the impacts is that jobs are counted in the location of the employer.
This assumption doesn’t hold strongly for businesses with employees in other states. In such cases, the number of impacts attributed to the state should be considered an upper limit of the potential in that state. In reality, the impact is likely distributed across the states where the businesses have locations or provide services.