“Our diversity is our strength and is key to our country’s economic and social growth.” –Filomena Tassi, former Canadian Minister of Public Services and Procurement
Citizens and business owners, even whole communities, might have an excellent grasp on how valuable a role competition plays in our economy but have little insight into how supplier diversity fits into the equation.
Investopedia defines market failure as the situation in which there is an inefficient allocation of goods and services in the free market. The forces of supply and demand are imbalanced. One way this can occur is if there isn’t enough supplier competition. If there is only one supplier in a specific industry, they can charge whatever they want because there is no incentive to usurp a competitor. Because the product is too expensive, customers avoid purchasing it unless necessary. Everyone suffers.
Supplier diversity is a many birds, one stone kind of response to a variety of economic concerns: lack of competition being one of them. When a government, community, or organization commits to diverse supplier initiatives, they gain access to new products and services, enhance market competition, create and maintain local job creation, support innovation, and create opportunities for underrepresented groups.
And supplier diversity isn’t just good for the suppliers and consumers, it’s great for a business owner’s image. In 2019, Hootology, a research company developed a survey for corporations looking to determine how supplier diversity programs impact their bottom line. The results showed that when consumers are aware of an organization’s commitment to supplier diversity, they have a more favorable perception of said organization.
For a business to be certified as diverse, it must be at least 51% owned, controlled, operated and managed by an underrepresented group of some kind. Certification is an essential step for many such businesses who want to increase their presence and access to opportunities and resources.
Women’s Business Enterprise National Council (WBENC) is the most widely recognized and respected national certification for women-owned businesses in the U.S. According to their website, “there are 13 million women-owned businesses in the U.S., representing 42% of all business. Yet, there is still significant disparity in revenue and capital between these businesses and others.” The certification WBENC offers, helps to bridge this gap.
In Canada, Women Business Enterprises Canada Council (WBE Canada) is doing very similar work. WBE is a non-profit organization dedicated to opening doors for Canadian women-owned businesses to supply chains across Canada, North America and globally. Their mission is to build and grow a strong Canadian ecosystem that connects women-owned businesses to procurement opportunities through advocacy, certification, development, and promotion and help corporations and governments to deliver on their supplier diversity commitments.
To connect with diverse suppliers in Canada or the U.S., we recommend perusing WBENC and WBE Canada’s websites. They are both excellent resources to help connect you with local women-owned businesses in your area.
If you’re interested in learning more about the experiences of women in business, RFN Contributor Julie Keyes also has a great book, Poised for Exit, filled with resources for woman business owners. Consider picking up a copy for an entrepreneurial woman in your life.
Alternatively, RFN Academy’s Diversity and Inclusion program is a great way to get started learning more about how supplier diversity, amongst wider diversity and inclusion policies, can benefit you, your business and your community.
