Diverse suppliers in Canada, while a significant and growing part of the Canadian economy  are under represented in the large supply chains of corporations and governments. It is estimated that Canadian women entrepreneurs while holding some ownership stake in 47% of Canadian SME's, receive significantly less than 5% of contracts awarded by the largest purchasers in Canada. While women start more businesses than men in Canada  and Canadian women business owners are recognized as leaders in the field of entrepreneurship in the OECD countries, women's business in Canada (and around the world) grow at significantly lower rates less than male owned businesses. Enhancing women's business growth by helping them to successfully do business with large corporate and government purchasers through supplier diversity initiatives, is a proven route to assisting women's business to grow to their full economic potential. Supporting under represented minorities to enter the mainstream of the Canadian economy is consistent with Canadian values and ethics.

 History of Supplier Diversity (SD)

Supplier diversity is a well established program in the US, initiated by the US government in the 1960s, aimed at bringing greater economic opportunity to African American owned firms. SD programs set targets for US government procurement and encouraged large multi-national corporations (MNCs) to source from minority suppliers. The targets for SD are largely administrative targets,  not legal requirements. In the United States, the official target for women owned businesses' share of government procurement was introduced in the 1980s and is set at 5%.The United States is the only country in the world where the private sector is heavily involved in supplier diversity programs.

Business Case for Supplier Diversity

Of the Fortune 500 companies 97% have supplier diversity programs. The US government is no longer the leading proponent of SD.  78% of US companies with revenues over $5 billion require certification for women's businesses. With the trend towards contract bundling in the USA, over 80% of MNCs are now requiring supplier diversity efforts from their tier one and tier two suppliers.. SD efforts are led by corporations because the business case for supplier diversity is strong. Small businesses are a good source of innovation, creativity, competitive pricing, and quick and agile business practices. Women's businesses are viewed as being particularly “loyal” to their corporate clients who integrate them into corporate lobbying efforts with governments.

Women are already by far the largest market in the USA accounting for over 85% of all consumer decisions. Diverse communities are the fastest growing consumer market in the USA hence corporations want to be visibly associated with them. Women and diverse populations are essential to satisfying the future US labor force requirements and SD is viewed as one tool to help these diverse populations know and identify with MNCs. AT&T attributes $28 billion in revenues directly to their SD programs. SD is associated with corporate social responsibility goals although it is now rare to find corporations who say SD is the “right thing to do”. There is wide spread top level executive support for SD in the USA. Corporations advertise their “spend” with diverse populations and high visibility award programs, national conventions, associations and specialty publications for SD specialists are common.

It is interesting to note that over 50% of corporations meet women businesses at conferences, 75% of American corporations are members of women's business associations and over 80% send purchasers to women's business conferences and trade shows. Women owned businesses are much valued by the biggest of American corporations.

Women Owned Businesses and Supplier Diversity- the Case of the United States

In the USA 30% of women owned businesses do business with multi-national corporations  compared to 49% of male owned businesses. However of the 8,000 women business enterprises registered with WBENC,  75% are actively marketing their businesses to MNCs and a full 50% of revenues of registered women's businesses come from doing business with MNCs, a level similar to male owned companies. On average the contract value for women's businesses with MNCs is over $500,000. Certification and the associated education, training, mentoring, and networking programs focused on the MNC supply chain have proven to be a successful means to achieve enhanced growth for women owned businesses. The American experience validates that the SD programs and certification and education through a non profit model pays rich dividends for WBEs.

Certification of Minority Businesses

 Fortune 1000 companies require that women and minority suppliers be certified as owning and operating 51% or more of their company. In the USA there are two non-profit councils that certify women and minority businesses, educate them about how to access MNC supply chains, build networks between suppliers and purchasers, organize trade fairs, awards events and advocate on behalf of women and minorities. The National Minority Supplier Diversity Council (NMSDC) was established in the 1970's, and is a $20 million+ annual operation. The Women's Business Enterprise National Council (WBENC) was established in 1997 to certify women (Caucasian women are not eligible for NMSDC certification) and has an annual budget of $7 million. Funding for both councils is entirely from MNCs, education and training profits, certification fees, trade fairs, awards events and other sponsorships from the private sector. In Canada the Canadian Aboriginal and Minority Supplier Diversity Council was established in 2004 and is affiliated with NMSDC. WEConnect Canada is being established as a non profit Canadian entity which will certify Canadian women's businesses to provide MNCs with the full spectrum of certification services in Canada. While WEConnect Canada is not officially affiliated with WBENC, WBENC is providing all its intellectual property, processes, experience and advice at no cost. Quantum Leaps,  a US based non profit with rich experience in growing women's entrepreneurship around the globe has been authorized by WBENC to replicate the WBENC model around the world. WEConnect UK was launched in 2007 and WEConnect India and WEConnect China will launch in 2009 and 2010.

American MNCs Are Going Global with Supplier Diversity

 American MNCs want to extend their supplier diversity programs internationally as their supply chains grow increasingly global. Encourage by their corporate sponsors, NMSDC and WBENC are both moving into international markets in support of their MNC clients' increasing global procurement sourcing. WBENC supported the launch of WEConnect UK in 2007 and WEConnect Canada is launching in 2008. WEConnect India and WEConnect China will launch in 2009 and 2010. The International Trade Center (ITC) in Geneva is supporting the launch of WEConnect India.

The Case for Canadian WBEs

More than 60% of undergraduates, over 50% of masters degrees and an accelerating % of Ph.Ds are awarded to Canadian women annually and women are already Canada's highest educated resource. 47% of all Canadian SMEs have some degree of women's ownership and it is estimated that over it is estimated that over 30% of Canadian SMEs are 50% or more owned by women and that nearly 20% of Canadian SMEs are majority (over 51%) women owned. Women in Canada are starting companies at twice the rate of men and 50% of women owned businesses intend to grow their businesses. In the United States growth rates for larger women owned companies (over 100 employees or over $1 million in sales) is significantly higher than for all firms. Women in Canada are also the largest consumer sector as in the United States.

Maximizing Economic Contribution and Growth for WBEs

Despite their high education levels and aggressive growth intentions women's businesses do not grow as much as male owned businesses. This is a global phenomenon. While research is sporadic and much more investigation is required some of the major reasons given include

 lack of networks connected to the center of power and decision making

 lack of role models and mentors and confidence

 lack of specific understanding of how to market to large corporations

lack of access to and readiness to use significant financing

under representation in SME development vehicles and self employment programs

The WEConnect Canada Opportunity for Canadian WBEs

Through certification by WEConnect Canada certified Canadian women owned businesses will be eligible to bid into the US MNC supply chain. The Canadian Consulate General in Philadelphia has  proven the success of the model by successfully positioning Canadian minority supplier food companies with large super market chains in the US through the CAMSC certification process. It is expected however, that as Canadian corporations become more familiar with Supplier Diversity and understand the business case the way the American MNCs do, significant new opportunities for women and other diverse business owners will be created within Canada. Efforts to raise awareness of the rich economic possibilities which result from supplier diversity programs with all levels of government in Canada could also pay rich dividends for minorities.