Research calls on UK government to include ethnic SME in their supply chains

Ethnic SME supply diversity

Research calls on UK government to include ethnic SME in their supply chains

New research published today calls on the UK government to work harder to include ethnic minority-owned small and medium enterprises in their supply chains.

The report, published by MSDUK, is the first piece of research dedicated to exploring the challenges and opportunities for ethnic minority-owned small and medium enterprises in government procurement and the procurement of their major suppliers. Looking at trends within the marketplace, current government reporting and stakeholders’ responses, the report found that the government, despite having in place three pieces of legislation dedicated to getting small and medium enterprises (SMEs), minorities and high social value enterprises into its supply chains, has not actively engaged with ethnic minority-owned businesses in its procurement.

Other findings included:

  • Government currently does not break down its spend with small and medium enterprises beyond total direct and indirect spend by each department.
  • The three pieces of legislation designed to support the inclusion of SMEs, minorities and high social value enterprises in public supply chains currently work in isolation from each other.
  • Ethnic minority-owned small and medium enterprises still face numerous challenges in accessing government supply chains that support programmes are failing to solve.
  • Ethnic minority-owned SMEs represent between 6-9% of the SME marketplace and generate £25-32 billion a year in revenue.

The report makes the business case for government and businesses to invest in programmes that seek out and engage with more diverse suppliers, showcasing the socio-economic value of an inclusive supply chain. 71% of the businesses in MSDUK’s network are located in areas of higher than average unemployment, while 63% operate in areas with more than 7.3% of pupils getting fewer than 5 GCSEs.

MSDUK is the UK’s leading non-profit membership organisation working on inclusive procurement.

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