A major new report commissioned by Minority Supplier Development UK (MSDUK) and conducted by The Social Investment Consultancy (TSIC) finds that the UK’s Ethnic Minority Businesses (EMBs) businesses are failing to win contracts with big business and 36% of large UK corporates admit they’d expected Ethnic Minority Businesses (EMBs) to be “behind the standards of their current suppliers”, despite growing evidence that EMB suppliers are outperforming rival suppliers. It also finds that senior level audiences in UK corporates remain difficult to engage on the issue of improving supplier diversity.
The report, launched at the MSDUK 2012 Conference on 12th October 2012, paints a mixed picture of the supplier / corporate relationship. On the one hand EMBs are increasingly winning contracts to supply services to large corporations, 54% of whom agree that there is a ‘strong link’ between supplier diversity and new business development. However, according to Baroness Verma, Parliamentary Under Secretary for State for Energy & Climate Change, who backed the report’s findings: “we also need large corporations to recognise the commercial advantages of a more inclusive supply chain, as well as the knock-on benefits that minority suppliers can deliver to the wider community.”
The key findings of the report:
- Reaching deprived areas: 71% of EMBs are located in areas of above average areas of unemployment, poverty and low educational attainment and have an important role in raising incomes, employment and aspirations in these areas. The unemployment rate among 16 – 24 year olds from ethnic minorities is 30%, in comparison to 21% for white youth. EMBs are naturally good channels to help introduce more young people into the world of work. In the past 12 months, 66% of surveyed suppliers have offered work placements, internships or apprenticeships for young people in their community.
- Supportive internships: Two out of three EMBs have offered work placements, internships or apprenticeships for young people in their community: twice the national average.
- Community engagement: EMB members are active participants in their local communities: 82% of them regularly volunteer which is more than twice the national average of 40%. Furthermore, 57% of them act as mentors to other entrepreneurs.
- Perceptions: Prior to engaging with EMBs, 36% of corporates admitted that they’d expected EMBs to be slightly behind the standards of their current suppliers.
- Job creation: BME suppliers are increasing their workforce by 4% p/a, far above the national average of 2.5%.
- New business development: 54% of corporates said there’s a ‘strong link’ between supplier diversity and new business development.
- Job and Revenue Growth: The number of people employed by the EMBs surveyed has increased by 12% over the course of the last three years. 64% of EMBs predicted over 20% expected revenue growth in the next two years. In EMBs an average of 61% of employees are also from a minority background.
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