Posted On: 8th November 2012
Arnab Dutt, managing director of Texane, says having minority owned firms in your supply chain is more than about diversity and CSR– it’s good business.
There are plenty of fine words spoken about inclusion and equality, but in the business world as in life in general, you all too often get the impression it’s just lip service.
So you could forgive delegates to a recent conference on supplier diversity for a certain amount of healthy scepticism based on experience.
The conference was run by MSDUK, an organisation whose stated aim is to encourage large UK based multinational companies to source products and services from ethnic minority businesses and minority-owned firms. Or to use their phrase “deliver supplier diversity”.
That word “deliver” is key because today many organisations understand they need to demonstrate that they have a supply chain model that encourages minority-owned businesses. In the US, this dates back to the Government’s response to the inequality exposed during the 1960s when civil rights legislation was enacted. As the equality agenda has become more important, the idea has spread throughout the western world.
Government procurement officers and purchasing managers in corporations in the UK, US and across Europe are under increasing pressure to demonstrate a diverse supplier base that is representative of their population mix.
So it’s a box ticking exercise, I hear the cynics among you say.
Well, maybe, partly, but there is a much better reason why large organisations should look to incorporate minority firms into their preferred supplier lists.
A brief dip into the history of the world’s most dynamic cities, such as New York and London, will provide evidence that immigrants have been more driven, more entrepreneurial, more likely to succeed than comfily-off indigenous folk. It is the same today.
Unlike most new businesses – more than half of which fail early on - 70 per cent of ethnic minority businesses are still here after five years, and they grow 20 per cent faster than other small firms.
Tapping into that entrepreneurial energy and success mindset is not just paying lip service to Corporate Social Responsibility. It’s adding value to your business.
Arnab Dutt is a Director of Texane, based in Market Harborough, a market-leading British manufacturer of polyurethane components.