We are a Language Service Provider that, as a B Corporation and Women-Owned Company, aims to make a positive impact in the world while doing what we love and do best: enable global communication and accessible information. If you are willing to learn more about us, please get in touch! Previous Next. It encourages fair competition between the current and potential vendors. It creates opportunities for business expansion. This work includes workshops , professional matchmaking at supplier diversity conferences, enhancing opportunities for capital investment, and management education.
Inclusive procurement also delivers broader societal benefits by generating economic opportunity for disadvantaged communities. The U. Small Business Administration estimates there were 8 million minority-owned companies in the United States as of And those numbers are steadily increasing.
In an interview, Terrez Thompson, vice president of global supply inclusion and diversity at Coca-Cola, highlighted the role that diversity programs play in fostering entrepreneurship in highly impacted minority groups. Together with Georgia State University, Coca-Cola formed a supplier-development institute four years ago to provide education on how to start businesses for small and disadvantaged groups. Coca-Cola also has the STEP initiative to support women entrepreneurs through training, education, and mentorship.
Some large companies encourage, and in some cases, require their suppliers to create their own diversity initiatives to broaden the impact. Supplier diversity programs are also a selling point when hiring. Fifty-two percent of respondents to a survey conducted for UPS by Hootology, a specialized marketing and consumer insights research firm, said they want to work for a company that has a supplier diversity and inclusion program, according to Oswold.
Aside from these moral and ethical arguments, there are sound commercial reasons for creating supplier diversity programs. Most diverse businesses are small, and offering them business allows them to grow and compete better in the market, which encourages competition and innovation amongst diverse and non-diverse companies alike. So supporting them also helps to grow the economy and hastens economic recovery. On a more local level, buying from diverse businesses allows them to support current jobs and create new ones, increase wages, and pay more in tax revenue, which benefits their local communities.
Many companies with supplier diversity programs measure indicators of this economic impact like jobs supported and money contributed to the economy to show how their diversity programs affect the world around them. Perhaps the most significant benefit of having a supplier diversity program is an increase in market share. The more a company increases its diversity spending, the more its market share grows. On a related note, increased diversity in the supply chain allows a company to expand more easily into markets with different demographics.
The growing number of minority people in the U. Apart from these benefits there are other incentives to increase diversity supply; adding more diverse suppliers gives a company more avenues to procure supplies while encouraging competition between vendors for the best service and price.
First and foremost, supplier diversity programming adds economic value because it encourages the growth of diverse businesses. Diverse businesses typically encounter barriers that challenge their startup and sustainability efforts, such as access to capital and networking opportunities, and effective supplier diversity strategies can alleviate these pain points.
Not only does supplier diversity benefit underrepresented businesses, but it also uplifts the communities where those businesses are located through job creation, increased wages, and tax revenue. This is called economic impact, a metric that demonstrates how valuable supplier diversity is to local economies and communities. More and more corporations are measuring the economic impact of their supplier diversity programs to gain a clearer picture of what diverse spend means for the communities they reach.
Because most diverse businesses are small businesses, they aid in the economic recovery and sustainability of their communities. Research shows that when companies increase their diverse spend, they see an increase in market share. Specifically, the correlation between high diverse spend and increased market share was markedly superior to the ROI from companies with low diverse spend. Beyond the social responsibility and economic impact metrics, the fact is that inclusive supply chains present a competitive advantage, as progressive organizations that have already implemented an effective strategy have realized.
That last point alone hints at the tremendous untapped potential of working with diverse suppliers. According to a Department of Commerce study, this growing minority population will account for as much as 70 percent of the total increase in purchasing power from to We expect data from the U.
Census to reflect a continued increase in the economic impact of small and diverse businesses on the U.
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