Business Case for Supplier Diversity Economic Benefits: Wealth and Job Creation Wealth As the minority population grows, minority-owned businesses will play a significant role in the economic development of our country. It is clear that the utilization of supplier diversity not only benefits companies, it also benefits consumers as well as the community. According to the Small Business Administration minority and women-owned business enterprises are among the fastest-growing segments of the U.S. economy. There are more than 12 million such firms accounting for over $4 trillion in annual gross sales. If diverse businesses are not a part of a company’s supply chain, not only is the company deprived of the fastest growing segment of our economy, but it’s deprived from tapping into the rich perspective and talent of our communities. The Census Bureau estimates that minorities, both arriving from abroad and born in the U.S., will account for nearly 90 percent of the total growth in the U.S. population from 1995 to 2050. The Catalyst states; African-Americans’ buying power has increased from $318.1 billion in 1990 to $910.4 billion in 2009 and is projected to climb to $1.1 trillion in 2014. The percentage change in African-Americans’ buying power between 1990 and 2014 is 257.3%, higher than the 189.1% growth rate for whites, but lower than other race/ethnic groups. African-Americans’ share of the consumer market was 8.5% in 2009.7 As a result of global demand for materials, equipment, and natural resources, prices for companies to do business have risen considerably. Supply chain initiatives focused considerably on diverse suppliers should be one of the ways in which companies leverage their price for the procurement of goods and services. In 2008, according to new research from The Hackett Group, a strategic advisory firm and an Answerthink company (NASDAQ: ANSR), increasing the reliance on women- and minority-owned businesses as suppliers does not cost leading procurement organizations more. In fact, some cutting-edge companies find quite the opposite is true, and are finding ways to use supplier diversity to drive new sources of revenue. Hackett’s research shows that world-class procurement organizations which focus heavily on supplier diversity don’t sacrifice procurement savings to do so. In addition, these leading
Business Case for Supplier Diversity Economic Benefits: Wealth and Job Creation Wealth As the minority population grows, minority-owned businesses will play a significant role in the economic development of our country. It is clear that the utilization of supplier diversity not only benefits companies, it also benefits consumers as well as the community. According to the Small Business Administration minority and women-owned business enterprises are among the fastest-growing segments of the U.S. economy. There are more than 12 million such firms accounting for over $4 trillion in annual gross sales. If diverse businesses are not a part of a company’s supply chain, not only is the company deprived of the fastest growing segment of our economy, but it’s deprived from tapping into the rich perspective and talent of our communities. The Census Bureau estimates that minorities, both arriving from abroad and born in the U.S., will account for nearly 90 percent of the total growth in the U.S. population from 1995 to 2050. The Catalyst states; African-Americans’ buying power has increased from $318.1 billion in 1990 to $910.4 billion in 2009 and is projected to climb to $1.1 trillion in 2014. The percentage change in African-Americans’ buying power between 1990 and 2014 is 257.3%, higher than the 189.1% growth rate for whites, but lower than other race/ethnic groups. African-Americans’ share of the consumer market was 8.5% in 2009.7 As a result of global demand for materials, equipment, and natural resources, prices for companies to do business have risen considerably. Supply chain initiatives focused considerably on diverse suppliers should be one of the ways in which companies leverage their price for the procurement of goods and services. In 2008, according to new research from The Hackett Group, a strategic advisory firm and an Answerthink company (NASDAQ: ANSR), increasing the reliance on women- and minority-owned businesses as suppliers does not cost leading procurement organizations more. In fact, some cutting-edge companies find quite the opposite is true, and are finding ways to use supplier diversity to drive new sources of revenue. Hackett’s research shows that world-class procurement organizations which focus heavily on supplier diversity don’t sacrifice procurement savings to do so. In addition, these leading
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