An executive order by President Nixon in 1972 began our work advocating for minority-owned businesses and diversity in the nation’s corporate supply chains. Today that membership spans Fortune 500 corporations — more than 1,700 members who can connect to the vast network of approximately 12,000 minority business enterprises (MBEs) to in turn supply the products and services they require.
Why is this important?
The growth of minority business is important to the economic sustainability of the nation. By 2043 the country will see a minority-majority. The tipping point for the workforce will occur even sooner. California, the world’s sixth-largest economy, has already reached this point in both workforce and population.
A 2014 Economic Impact Report shows that the aforementioned network of certified MBEs annually creates more than $400 billion in economic output. That’s more $1 billion each day. To boot: 2.2 million jobs, 32 percent of which are directly or indirectly filled by our certified businesses, and $49 billion in tax revenue for local, state and federal authorities. Additionally, minority owned business-starts outpace non-minority businesses by 3 to 1.
Understanding the consumer
Nixon’s Executive Order 11625 stated: “The opportunity for full participation in our free enterprise system by socially and economically disadvantaged persons is essential if we are to obtain social and economic justice for such persons and improve the functioning of our national economy.”
Diversity and inclusion are not just buzzwords for employers. It is clear that a diverse workforce is beneficial to companies and corporations, with benefits including an improved public image, closer connections with customers and community building. Looking beyond the corporate workforce, increased benefits accrue from minority supplier development, including the first-mover advantage of gaining access and better positioning in new markets, and increased market share.
Corporations that diversify and improve their supplier partnerships may find that they better understand the market for their product. Minority communities, in turn, coalescing around MBEs that are corporate suppliers and job creators, will gain increased economic growth, which redounds to the benefit of the corporations. It’s a true win-win.
Joset Wright-Lacy, President, National Minority Supplier Development Council (NMSDC), [email protected]