Harriet R. Michel
President of the National Minority Supplier Development Council (NMSDC)
As understanding grows about the negative impacts of poverty and racial divisions on social and economic stability, the world has become more aware of the value of inclusion. Drawing on this awareness and the lessons of the American civil rights movement, the National Minority Supplier Development Council (NMSDC) seeks to promote minority inclusion around the world. With the support of many progressive corporate members NMSDC has seized the opportunities opened by globalization to share its 37 years of experience of successful ethnic minority business integration in corporate procurement.
NMSDC’s formula is simple, focused—and successful. The organization’s sole purpose is to bring together corporations and minority businesses under favorable conditions to encourage business partnerships. NMSDC maintains a national database for its corporate members to identify minority businesses that produce the products or services they need.
Growing minority businesses
What is driving the new corporate concern with minority inclusion? Two factors: demographics and economics. Minorities make up nearly 30 percent of the current U.S. population, and Asians, Blacks, Hispanics and Native Americans, wield a buying power in excess of $10 trillion.
In the countries in which they operate, minority businesses are among the most dynamic segments of the economy, offering a profitable new market opportunity for many kinds of products and services. In the United States minority businesses are growing at double the rate of all firms in the U.S. economy, both in numbers of new firms and total sales. Purchasing activity by NMSDC member corporations from minority suppliers soared to a record of over $104.7 billion in goods and services in 2007, reflecting the growing range of programs and services available from minority firms. Minority firms have enthusiastically embraced the business models of the new economic order, in which technology, competitiveness, and value added are the key determinants of business success.
The NMSDC Global-Link Program
The world is now more aware of the value of inclusion because it is evident that poverty and racially divided societies always work against the foundation of economic stability anywhere in the global village. In light of this fact, and little over eight years ago, NMSDC launched Global-Link, a program to assist in the creation of a global network of independent ethnic-based supplier development organizations. Global-Link seeks to mirror the success of the U.S. experience with the inclusion of disenfranchised ethnic groups into mainstream society. Corporations, governments, and ethnic minority business enterprises in most countries can now count on NMSDC and its Global-Link program to help them draw from the American experience in ethnic minority supplier development and leapfrog their own initiatives in this area.
Global-Link is making instruments and processes available to other countries with an interest in developing their own supplier diversity initiatives. Among these instruments are technical assistance in the design and implementation of supplier diversity strategies, minority certification, online database development, advocacy and policy dialogue research activities, and dissemination of best practices and lessons learned. Global-Link promotes the use of these tools through roundtables, workshops, forums, training, seminars, and conferences. The program’s global outreach illustrates NMSDC’s commitment to making minority inclusion a value of businesses worldwide, and has assisted in the creation of minority supplier development organizations in Brazil, Canada, the United Kingdom, and more recently in Australia and the People’s Republic of China.
Global-Link and MSD China
Over the past two years and through a partnership with China’s Association of Advanced Knowledge Promotion in Ethnic Regions (AKPRO), the endorsement of the State Ethnic Affairs Commission (SEAC), and support from several American multinationals operating in China, Global-Link assisted in the launching of Minority Supplier Development China (MSD China).
MSD China is the first nationwide non-profit membership organization dedicated to enhance the development of China’s minority-owned business by connecting minority suppliers to corporations for procurement opportunities on a mutually beneficial basis.
Typically growing at double-digit rates, China’s economy has become the world’s fourth largest, and in 2008 the average annual per-capita income for the country was classified in the lower middle category by world standards at about $3,180. However, as China goes through a transitional phase from planned economy to market economy, the economic gaps are widening between coastal areas and interior parts of China where 55 ethnic minority groups are predominant; and while the average annual per-capita income of costal urban residents is higher than the national average it is also more than twice of minority concentrated areas.
With the emergence of MSD China’s sustainable business model of inclusion, these income inequalities are bound to be reduced significantly as major corporations will begin to engage ethnic minority suppliers, thereby generating more employment and income generation and fueling the overall economic development of these ethnic minority communities and the nation in general.
Supporting minority supplier development is not an option for societies with a significant number of marginalized ethnic groups. A number of studies have shown that persistent inequality limits a country’s growth potential. Inequality acts as a deterrent to growth, and the persistent inequality in assets and income tends to perpetuate poverty.
The work of MSD China fills a critical need by providing networks, linkages and opportunities for ethnic minority businesses to become well established, to grow and to prosper. MSD China is helping some of the most ambitious yet vulnerable members of China’s society to become independent contributors to the nation’s collective prosperity.
The case for minority supplier development
☆ Benefits corporations and minority business enterprises alike
☆ Provides a means for corporations to foster economic growth
☆ Supports job growth and employment opportunities
☆ Contributes to the economic health of minority communities
☆ Brings more minority entrepreneurs into the mainstream
☆ Supports greater self-sufficiency of minority communities
☆ Increases capital investment, promotes cost savings, builds brand loyalty
☆ Expands markets
☆ Represents good corporate citizenship
About the author
Harriet R. Michel is the president of the National Minority Supplier Development Council, Inc. (NMSDC), a private non-profit corporate membership organization that links minority-owned businesses and corporate America. The NMSDC Network includes 38 regional councils across the United States, 3,500 corporate members and 15,000 certified Asian, Black, Hispanic and Native American-owned businesses.
Ms. Michel, a noted administrator and public policy expert on minority issues, previously was chief executive officer of the New York Urban League. She established the Women Against Crime Foundation at John Jay College of Criminal Justice, and was a consultant to the U.S. Department of Housing and Urban Development.
Her numerous awards and citations include the 2007 Lifetime Achievement Award from the Minority Business Development Agency, U.S. Department of Commerce; 2006 inductee in the first Minority Business Hall of Fame event; 2006 Black Enterprise magazine list of the 50 Most Powerful Women in Business, 2003 inaugural Champion Award at the Black Enterprise Entrepreneurs Conference; the 1994 Dow Jones Award for Entrepreneurial Excellence from The Wall Street Journal, and the 1993 Business Advocate Award from the Mayor of the City of New York.