Supplier Diversity in Europe Integrating Cities Conference 9 March 2012 Strategic thinking on equality and mobility
What is MPG?• An independent policy ‘think-and-do-tank’ with over 15 years of experience• Mission: to contribute to lasting and positive change resulting in open and inclusive societies by stimulating well-informed European debate and action on migration, equality and diversity, and enhancing European co- operation between and amongst governmental agencies, civil society organisations and the private sector.• Four primary activities: • Gathering, analysing and sharing information • Creating opportunities for dialogue and mutual learning • Mobilising and engaging stakeholders in policy debates • Establishing, inspiring and managing expert networks
Examples of MPG’s recent and current work• Migration News Sheet• EU Immigration Portal• MigNet – Immigration Network• Value Migration• Migrant Integration Policy Index (MIPEX)• European Website on Integration• Migrant Voices• Immigrant Citizens Survey; Access to Citizenship• European Anti-discrimination Legal Network• Anti-discrimination Awareness-Raising & Training• Mapping the Anti-discrimination Framework
Agenda• Definition of Supplier Diversity• Business Drivers for Supplier Diversity – Limited access to supplier diversity – Current EU and national legislation – Business benefits for procurement – Changing demographics • customer base • profile of underrepresented businesses• Present State of Play and What’s on the Horizon
Definition of Supplier Diversity• Not a quota system• Addressing inequalities in visibility and access to information• Seeks to ensure that all businesses have free and fair opportunity to compete for places in a supply chain.• … including small and medium-sized enterprises led by people from under-represented groups, i.e.: • Women Owned Businesses: A woman owned business is an independent business concern that is at least 51% owned and controlled by one or more women; and whose management and daily operation is controlled by one or more of the women owners. • Ethnic Minority Owned Businesses: An ethnic minority owned business is an independent business concern that is at least 51% owned and controlled by one or more ethnic minorities; and whose management and daily operation is controlled by one or more of the ethnic minority owners • LGBT Businesses: An LGBT owned business is an independent business concern that is at least 51% owned and controlled by one or more Lesbian, Gay, bisexual or transgender people and whose management and daily operation is controlled by one or more LGBT owners. • Businesses Owned By Persons With Disabilities: A business owned by persons with disabilities is an independent business concern that is at least 51% owned and controlled by one or more; and whose management and daily operation is controlled by one or more persons with disabilities, or is a major employer of persons with disabilities. • Businesses Owned By Young People: A business owned by young people is an independent business concern that is at least 51% owned and controlled by one or more young person; young persons are aged between 18 and 35, and whose management and daily operation is controlled by one or more young persons. • Suppliers from other under-represented or protected groups as protected by the European Union Discrimination Directive 2000..
Limited Access to Markets: Imperfect Information• SMEs often lack the relevant information and capacity to bid for public or private sector contracts.• There is a lack of awareness among large purchasing organisations of the potential minority supplier base and an inability of these SMEs to identify and exploit opportunities in mainstream consumer markets.• There is a perception among established ethnic minority entrepreneurs that contract opportunities were not being made available to them even though they have the capability to deliver contracts• Studies have found evidence of racial discrimination in the awarding of contracts in particular sectors.
EU Procurement and Anti- Discrimination Law• The European Commission estimates that public procurement globally accounts for about 17% of EU gross domestic product - a sum equivalent to half the GDP of Germany• The EU’s Procurement Directives allow for consideration and inclusion of social issues in public procurement, for example in relation to SME access to sub-contracting – Public sector clients may require private sector suppliers to push certain social obligations through their supply chains e.g. social issues, equalities and sustainability – Permitted activities are detailed in the EU’s procurement guide “Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement”• The EU Discrimination Directives 2000 lay down minimum common standards in EU Member States’ laws in the field of discrimination on the grounds of racial or ethnic origin, religion or belief, disability, age and sexual orientation.• There is a very real possibility that an allegation of indirect discrimination will made by a potential supplier against a large purchasing organisation in the near future.
EU Procurement Legislation and SocialConsiderations• Buying Social: A Guide to Taking Account of Social Considerations in Public Procurement - Directorate-General for Employment, Social Affairs and Equal Opportunities, Unit D.2 and the Directorate-General for the Internal Market and Services Unit C.3• http://ec.europa.eu/social/BlobServlet?docId=6457&langId=en• SDE Handbook on Supplier Diversity in Europe (section on EU procurement legislation): http://www.migpolgroup.org/public/docs/Handbook on_Supplier_Diversity_in_Europe.p or on the MPG Website: http://www.migpolgroup.org/publications_detail.php?id=253• European Website on Integration, Integration Dossier N Using Public Procurement as an Element of Diversity and Equality Policies
UK Procurement, Equalities and Anti-Discrimination Legislation• Some local authority procurers have utilised the Local Government Act 2000 to include social clauses in their tenders and contracts – Under the Local Government Act 2000, ‘Well Being’ places and obligation on local authorities to work towards the well-being of their communities, in relation to social, economic and environmental conditions• The Equality Duty 2010 aims to embed equality considerations into the day to day work of public authorities and to advance equality of opportunity between people from different groups. – The characteristics covered include: age, disability, gender reassignment, pregnancy and maternity, race – this includes ethnic or national origins, colour or nationality, religion or belief (including lack of belief), sex and sexual orientation.• As evidence of compliance, public sector procurement and commissioning staff are being asked to consider how they embed equality considerations in the organisation’s relationships with suppliers (including those from the private sector), through specifications and contract management.• Some organisations are already doing this, e.g. The London Development Agency’s CompeteFor Olympic Supply Chain Initiative which helps purchasers collect better data on their suppliers, including ethnicity and Transport for London’s inclusion of supplier diversity requirements in all of its contracts.
Business Benefits to Procurement• Wider candidate pool brings wider choices which brings access to innovation and flexibility into supply chains• Aligns supply chains, products and services with an increasingly diverse customer and client base• Supports EU and national legislation on anti discrimination, equality and diversity policies and internal equality and diversity policies• Public (and private) sector organizations are including supplier diversity requirements in tenders and contracts
Some Food for Thought: Key Demographics “Under-represented” groups across the Profile of Small / Medium European Union Sized Enterprises (SMEs) (Less than 250 employees, turnover People not exceeding 50 million Euro) Foreign Women with born Disabilities• Play a pivotal role in the European economy• 99% (23 million) of all EU Enterprises Number of are SMEs People 20.4 198.3 37 (millions)• Employ 75 million people• SMEs contribute over 55% of EU GDP % of total• Women entrepreneurs account for 5.4 52.5 9.8 population 22% of all SMEs in Europe Source: European Network for SME Research (ENSAR): 2003 Survey Entrepreneur Characteristics
SME European Union Landscape 49% of German Gross National Product is derived from SMEs SMEs employ 70% of all employees working in Private Business Approximately 25,000 companies in The Netherlands are owned and run by under-represented ethnic entrepreneurs Self employed immigrants have in recent years tripled to 27,380 Under-represented ethnic businesses now account for 9% of all UK businesses Over 62,000 of these businesses are based in London – 19% of all London businesses 13% of Swedish entrepreneurs are immigrants 80,000 firms are run by people from under-represented Ethnic societies
Underrepresented Businesses in the UK• Ethnic Minority Businesses (EMBs) account for 9% of all registered businesses in the UK (over 212,000 businesses) – London has the fastest growth rate in Europe in terms of the diversity of its population and under-represented businesses – Over 100,000 Black and Asian Minority Enterprises (BAMEs) are based in London which accounts for 26.5% of all London businesses – The number of BAMEs is predicted to double in some UK regions by 2020• They contribute between £30 and £40 billion to the national gross value added (GVA)• The younger generation of BAMES are now increasingly involved in high- value sectors including finance, business and professional services, IT and the creative and media industries• Women-owned businesses comprise approximately 16% of the business stock and over one million women are self-employed
Underrepresented Businesses in France• Over 24% of SMEs are owned by women – Expansion is rapidly increasing, as indicated by numbers looking for external finance• The disabled population is approximately 6% of total population• Over 7.5% of businesses owned by immigrants – Over 120,000 business are owned by immigrants • Largest immigrant populations are from North Africa and Turkey – Over 44% of self-employed foreigners are from the Maghreb – Numbers of ethnic entrepreneurs is rapidly increasingly• The French Government has used non-economic criteria in awarding public contracts
Why Are the Current and Future Drivers for Supplier Diversity Current Drivers Current Drivers Future Drivers Future Drivers Addressing EU General Extension of EU Strong links inequalities through Discrimination General between the local access to information Directives Discrimination and supplier and visibility Directives to the diversity agendas EU Procurement Law External client supply of contracts Increasing national UK Equalities demand Demands for data on and EU Government Legislation and Rise of sustainable equality and diversity support for SMEs Procurement Law procurement and in procurement from A recognised Diversity label in the public SME agenda Accreditation in France Reputation Rapidly increasing Supplier Diversity Diversity Charter in external client enhancement/risk France and Germany demand from both the mitigation private and public Innovation of SMEs sectors
MPG Pilot: Anti Discrimination andEquality in Procurement• MPG Pilot on anti discrimination and equality in procurement issues• Will involve 4 cities in 3 countries in Europe• Timeframe: launch before the summer• If cities are interested in joining the Pilot, they should contact Alex Kirchberger, Programme Manager, MPG at Akirchberger@mpg.com
For further information, please contact me at firstname.lastname@example.org To download these slides go to : http://www.migpolgroup.com/events_detail.php?id=339 Acting on equality and mobilityTo find out more about the Migration Policy Group’sactivities visit our website at www.migpolgroup.orgor sign up to our e-newsletter athttp://www.migpolgroup.com/subscribe.php