Supplier diversity initiatives and the diversification of ethnic minority businesses in the UK

Abstract

This paper examines the role that supplier diversity initiatives can play in opening up market opportunities for ethnic minority businesses (EMBs). EMBs have long been encouraged to diversify from inauspicious ‘low value’ niches; for some, the prospect of contracts with public and private sector organisations could serve as a means of facilitating this process. The advent of the Race Relations Amendment Act provides a legislative stimulus for diversity in public sector procurement. The ‘corporate social responsibility’ agenda, ostensibly embraced by many leading firms, provides a further impetus to re-assess diversity issues in respect of procurement. Case studies of two types of supplier diversity initiatives are drawn upon to inform this assessment: purchaser initiatives, from both the public and private sector; and intermediary or business-to-business brokerage type initiatives that attempt to facilitate the access of EMBs to potential contract opportunities. It is clear that such initiatives are at an early stage of development, and have to operate within legislative and political constraints. Nonetheless, there is still scope for the development of progressive measures; this is explored in the conclusion.