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RESEARCH 21 Procurement Initiative procurement specialists from leading American multinationals and the US National Minority Supplier Development Council (NMSDC). The NMSDC has been established for over 30 years, and is the USA’s largest business membership organisation. With most leading US corporations as members, it aims to provide a direct link between corporate America and ethnic minority businesses. NMSDC members see a clear ‘business case’ for supplier diversity. Their commitment to diverse suppliers is usually seen as a means of securing competitive advantage, rather than any welfarist notion of equal opportunity. Importantly, monitoring, measurement of spend with diverse businesses, and proactive engagement strategies with minority businesses are seen as prerequisites of supplier diversity. Impressive though the experiences of corporate trailblazers in the US are, it is important not to lose sight of key differences in national contexts. For example, elements of a public policy tradition rooted in affirmative action are still in evidence. And the business case for supplier diversity is further boosted by the prospect of the US becoming a ‘majority minority’ country in the next 20 years. These triggers are absent, or very weak, in the UK. Nonetheless, there is much that we can learn from the US, and the NMSDC in particular. Since the summer of 2004, CREME has been engaged on an exciting initiative to promote supplier diversity in the UK. In partnership with the NMSDC, and funded by the East Midlands Development Agency (EMDA), the initiative links corporations directly with ethnic minority businesses through the medium of workshops. An advisory group comprising largely corporations (and some public sector organisations) guides the initiative. Progress has been encouraging. In just over a year, corporate membership has grown from 8 to 21, and includes a number of leading multinationals. Given the time taken to establish supply chain relationships, expectations regarding the placing of actual contracts were very modest. Nonetheless, contracts have been awarded to the value of approximately £750,000 (which is considerably more than the funding for the initiative). Another beneficial trend has been the tendency of ethnic minority businesses to work together in order to bid for contracts. The success of the initiative has prompted the Commission for Racial Equality and the Chartered Institute for Purchasing and Supply to commission CREME to produce guides on supplier diversity for their respective organisations. Since August, 10% Ethnic Minority Businesses in the UK represent the small business population the initiative has been successfully ‘spun– out’, and is now a private sector controlled entity operating under the name of ‘Minority Supplier Development UK’. What lessons can be learnt from the CREME initiative? First, recognise that supplier diversity is at a very early stage of development in the UK. Simplistic prescriptions are unlikely to succeed. Each corporation has its own particular approach to procurement, and will, accordingly, interpret supplier diversity in line with its distinct priorities, practices and culture. A ‘business case’ has to be developed, not simply assumed into existence. Second, be clear and focused. Supplier diversity is not a panacea for the travails of all ethnic minority businesses. Comparatively few minority entrepreneurs will have the capacity and capability to supply large organisations. Expectations have to be managed accordingly. Third, adopt an approach that values ‘learning by doing’. In practical terms, this means that members undertake to promote supplier diversity in their own organisations; participate in events that will bring them into direct contact with ethnic minority suppliers; and share experiences with fellow corporate members. Finally, be patient. Supply chain relationships can be fragile and take time to develop. They are not compatible with the imposition of mechanistic outputs that are not apprised of the exigencies of trading with the corporate sector. CREME benefited from EMDA’s far–sighted approach to funding and measurement. Other RDAs may want to take note. 50% Ethnic Minority Businesses in UK cities like:Birmingham, London and Leicester (approx 50%) Professor Monder Ram Director, Centre for Research in Ethnic Minority Entrepreneurship mram@dmu.ac.uk ISSUE TWO 2006 engage