Diversity in Procurement: How Minority Suppliers Are Driving Innovation

In today’s business landscape, it’s no secret that supplier diversity has become a critical component of corporate social responsibility and I guess it’s no longer a secret that Ive become an advocate in this area.

As companies strive to become more inclusive, supplier diversity has emerged as a powerful tool to promote economic growth and social progress.

What is supplier diversity? It’s the practice of sourcing goods and services from a wide range of suppliers, including minority-owned, women-owned, veteran-owned, and LGBTQ-owned businesses. By actively seeking out diverse suppliers, companies can create a more equitable and competitive marketplace, while also boosting their bottom line.

Here are some statistics that highlight the importance of supplier diversity:

• In 2020, the top 100 U.S. corporations spent over $50 billion on supplier diversity initiatives.

• Supplier diversity programs generate $3.6 billion in economic output for every $1 billion in procurement spend.

• Companies with diverse supplier programs outperform their peers by an average of 15%.

These numbers demonstrate the tremendous value that supplier diversity can bring to businesses of all sizes and industries. But beyond the financial benefits, supplier diversity is also an important tool for promoting innovation.

Minority-owned suppliers, in particular, are driving innovation in a variety of industries. For example, in the technology sector, Black-owned businesses are leading the way in developing new software and hardware solutions. In the healthcare industry, women-owned businesses are innovating in areas like medical devices and pharmaceuticals. And in the construction industry, Hispanic-owned businesses are breaking new ground in sustainable building practices. These are some examples of the impact we make!

Why are minority-owned businesses so well-positioned to drive innovation? There are several reasons:

• First, diversity fosters creativity. When businesses bring together individuals from different backgrounds and perspectives, they are more likely to come up with innovative solutions to complex problems.

• Second, minority-owned businesses often have a unique perspective on their industries. They may have faced challenges and obstacles that other businesses haven’t, which can give them a competitive edge.

• Finally, when minority-owned businesses succeed, they often reinvest in their communities. This can create a virtuous cycle of economic growth and social progress that benefits everyone.

As a supplier diversity advocate having delivered, trained and coached on diversity and inclusion for some of the worlds best known brands, I’ve seen firsthand the positive impact that diverse suppliers can have on businesses. By partnering with diverse suppliers, companies can tap into new markets, foster innovation, and promote social progress. But it’s not just the right thing to do – it’s also the smart thing to do.

If your company is looking to become more inclusive, I encourage you to explore the benefits of supplier diversity. In November 2023, we are holding the first ever Supplier Diversity Visibility Summit, sponsored by Lloyds Banking Group. You get to see excellence at its best. By getting involved in this event you will get first hand access to diverse businesses that can drive innovation, boost your bottom line, and make a positive impact on the world.

We are on the lookout for speakers, sponsors and supporters.