The Opportunity
The small and medium enterprise sector is the UK's market place for
innovation and is a hugely important engine to the UK economy. It
is estimated that SME's have a spending power of £200Bn every year
purchasing everything from raw materials, to financial services,
to IT and communication products.
Minority Business Enterprise (MBE) forms a key element of the SME sector. For example, the ethnic minority community is responsible for over 9% of business ownership and 25% of SMEs are owned by women. MBE brings to the market new product ideas, flexibility, real knowledge of the customer groups and above all: pure innovation. The annual purchasing power of MBE is estimated at £65bn , further statistics are given below:
- There are approximately 100,000 ethnic minority owned businesses in London alone, with a combined turnover in 2001 of around £40Bn. This accounts for around 19% of turnover of all businesses in London and has doubled in the last decade.
- Sales turnover is broken down as follows: Indian £12.4Bn; Black (businesses owned by people of Black African and Black Caribbean background) £5.6Bn; Bangladeshi £5.2Bn; Pakistani £4.4Bn; Chinese £3.2 Bn; others £9.2Bn
- 1 in 3 of all new business start-ups are owned by women entrepreneurs
- The SME market is growing by 18% a year
BT's Supplier Diversity Initiative intends to provide MBEs access to key business support so that they may genuinely compete for commercial contracts. In turn, this close engagement with MBE's will provide valuable bid support to deliver competitive advantage for BT through increased market presence, market intelligence, brand awareness and customer experience, in a market worth £65Bn a year.
BT will also, through its purchasing power, influence suppliers throughout the supply chain to implement high standards of diversity.
Finally it is proposed that BT should underline its position as the leader in supplier diversity by articulating the absolute gains of the programme to all relevant stakeholders.
The Supplier Diversity Initiative
A programme of work is proposed through three key objectives:
- To create a diverse supply chain that is more reflective of the profile of our customers.
- Through the strength of our purchasing power we will influence all existing and new 1st tier suppliers to BT to implement a high standard of equality and diversity. This will ensure that integrity is maintained throughout BT's supply chain.
- To articulate the absolute gains to Supplier Diversity to our customers, suppliers, buyers, sales, senior management and external stakeholders such as business, government and other strategic policy makers.
Definitions
Defining Supplier Diversity
A minority business enterprise (MBE) is a company which is at least 51% owned, controlled or operated by one or more individuals who are members of an ethnic minority group, are women, are disabled or are either lesbian, gay, bisexual or trans-gender.However we recognise that some businesses exist with a social, as well as an economic objective, for example "social firms" define themselves as:
A social firm is a business created for the employment of people with a disability or other disadvantage in the labour market.
- It is a business which uses its market-oriented production of goods and services to pursue its social mission.
- A significant number of its employees will be people with a disability or other disadvantage in the labour market.
- Every worker is paid a market wage or salary appropriate to the work, whatever their productive capacity.
- Work opportunities should be equal between disadvantaged and non-disadvantaged employees. All employees should have the same rights and obligations.
