As U.S.-based companies extend their reach beyond our country’s shores, Supplier Diversity Program Leaders are being challenged to think critically about how their programs impact underutilized businesses across the globe.
According to Goldman Sachs, U.S.-based S&P 500 companies earn 33% of their revenue and 40% of profits from outside of the U.S. Similarly, the U.S.-based companies have seen a shift of sources of supply overseas.
The lineages of the Supplier Diversity programs we know today are uniquely American. Supplier Diversity in the U.S. is a product of a social contract, over 40 years of leadership from the U.S. Federal Government, private agencies and the business community. Programs which started with a focus on ethnicity have expanded to include gender, veteran status and more. In the U.S., we can rely on over 300 certification agencies nationally to certify diverse firms.
However, small and diverse businesses across many parts of the world face barriers to fair access, particularly outside of the U.S. where governments and businesses are not leading in the same way. The answer is not to transplant U.S. supplier diversity program practices globally. Just as there is a proven model for corporations to enter a new market geography, the Supplier Diversity Leader must understand the context of the environment and opportunity and risks before setting a strategy. NMSDC International and We-Connect are partnering with leading global corporations to define standards and best practices and certification processes. This is particularly challenging as the conditions which created supplier diversity in the U.S. in the late 1960s simply don’t exist in many other countries.
Keys to success include: clear program vision, strategy and goals aligned to each market; adaptation of proven approaches to the local market characteristics; and global skills transfer initiatives to develop champions in targeted markets.
In expanding focus beyond the U.S., large U.S. Supplier Diversity Program Leaders are concentrating on specific countries which represent:
- a significant percentage of their firm’s revenue
- a significant percentage of their firm’s total spend and suppliers
- the greatest potential for achieving critical mass in corporate and governmental support
While the internal factors vary by industry and company, a few countries are most commonly identified: UK, Canada, Australia, China, India and South Africa.
For more insight into the global supplier diversity opportunity and how corporations are reaching out to global suppliers, consider the following resources:
Visit Supplier Diversity - The Global Edition to meet your global supplier diversity goals!