2015 Spend Matters Prediction: Small is Beautiful

Let’s face it, traditional supplier diversity is somewhat of an artificial construct (however much we support the idea of encouraging small business, women and minorities to fuel economic growth).

Moreover, what is racial diversity these days? An Indian-owned firm in certain markets might in fact be less “diverse” than a white or Hispanic one. An African-American business in other markets could actually be less diverse compared to an Asian run firm in the same area. But who gets the most preference?

In 2015, we see localization and small business advocacy thankfully starting to trump ethnic considerations in supplier diversity. It’s a trend that makes sense and mirrors the related strategy of supply chain localization overall. Moreover, local/regional regulatory-driven supplier diversity mandates based on ethnic considerations simply don’t play globally.

And who needs them? In a world that is becoming more diverse and integrated, what matters is encouraging entrepreneurs of all stripes – especially those who otherwise could not afford to start a business in the first place.

Don’t get us wrong. We love diversity. And our team is probably the most expert in supplier diversity solutions and processes of any research or analyst group. However, practical business considerations to align supply bases to customer bases creates the localization effects that benefits small businesses, which in turn, helps align gender, ethnicity and related traditional supplier diversity elements.

And that is better than simply checking the diversity box.

Stay tuned for our full 2015 predictions report, coming soon! Sign up below to receive the full report when it is released!


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First Voice

  1. Rod Robinson:

    Great post. When you consider the fact that small businesses represent 99% of all US businesses and that approximately 70% of those are owned by WMBE’s, it is clear that small (and local/regional) is Diverse default.

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