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I am very glad to have been invited by Monder to provide the welcome
address to today's conference. Partly, because I have worked with Monder
on numerous occasions and, of course, know him in his capacity as an
influential member of the Ethnic Minority Business Forum which is there
to advise me and the Small Business Service on getting it right for
business in ethnic minority communities.
But I am pleased to be here too because I believe that supplier
diversity as an issue is crucial to the further success of our economy
today.
There are some 3.7 million SMEs in the UK, comprising a diverse group
of organisations. Many SMEs already sell to the public sector but so
many more should be encouraged to do so.
About 10% of all start-ups are now by ethnic minority businesses - a
massively productive sector of our society, contributing more than £13
billion a year to the economy; and one whose drive and creativity our
Government wishes to encourage and support for the good of our economy.
And this is the importance of today's conference - to explore why
fewer minority businesses compared to their competitors supply large
corporations; to examine how corporate Britain is sourcing suppliers
from minority businesses and to see what works best; and to take a look
at what can be learned from leading-edge American examples.
We in Government are certainly keen to ensure that ethnic minority
businesses get a larger share of the public sector market. Indeed, both
public sector bodies and commercial organisations can find real benefit
in sourcing suppliers from ethnic minority businesses.
I notice that we have the Environment Agency here today - we welcome
work done by our public sector colleagues in the Environment Agency, to
identify actions in support of the Agency's Diversity Policy.
This is why I support and admire initiatives to support supplier
diversity:
Initiatives like:
- Fit to Supply: a supplier diversity project supported by the Small
Business Service which aims to bring together small businesses from
local communities with major buyers of goods and services
- British Telecom: whose supplier diversity programme is based not
only on the social benefit case but on the theory that increasing
opportunities for ethnic minority businesses will enhance the supply
chain and bring economic benefits
- Supply Net for London: a project, which aims to develop
business-to-business links between the wealth of the City and the
more disadvantaged areas of Lambeth and Southwark, matching
purchasers with suppliers.
This is the sort of energy and innovation that I can't praise too
highly. Large corporations need to be brave and break out of their
traditional supply networks and trade with as broad and diverse a range
of SMEs as possible.
Large corporations expect to sell their wares on the open market and
would expect to penetrate all sections of society. They must, therefore,
support and do business with all sections of local communities and look
beyond the status quo in procuring from their traditional supply
networks.
It was this government that first saw the benefits small firms could
offer and acknowledged their role as a major driver to the economy and,
after establishing the Small Business Service in 2000, went on to
develop the 'Think Small First' campaign.
And, since then, Government has taken a number of steps towards
improving access to tendering including:
- Issuing guidance that public sector bodies should not insist that
small firms produce three years' accounts when bidding for tenders
- Producing a guide - Smaller Supplier, Better Value - to encourage
the public sector to source supplies from small firms; and
- Helping firms with tendering through the Business Link network
Last month saw publication of a joint report by the Better Regulation
Task Force and the Small Business Council looking at the barriers facing
SMEs in their bid to sell their goods and services to the public sector.
The report includes a number of recommendations for Government action to
level the playing field for small firms.
And I am now giving the SBS the tough remit of going out, and,
working with others, to identify what else Government should be doing to
assist. This might include:
- Better, more inclusive advertising of procurement opportunities
below the EC threshold of £100k;
- Facilitating more advice and training for small and medium-sized
enterprises on how to do business with central government;
- Piloting common core pre-qualification information for lower value
contracts;
- Working with Prime Contractors to enable opportunities for small
and medium sized enterprises throughout the supply chain; and
- Promoting the OGC Procurement Code of Good practice.
This is crucial because we in Government must be seen to practise
what we preach and do our level best to make sure that small firms of
all types have access to a slice of the public sector procurement cake.
In short - we all certainly need to be more innovative in applying new
procedures to procurement. For too long the public-sector has been tied
by guidance and old procedure which, though laudable in protecting the
public purse, has meant that procurement officials have adhered to safe
routes that have tended to give little in the way of added value back to
society.
We need to grow as an economy and to do this we need to use all the
tools available to us; chief amongst those is the need to capitalise on
the whole range of SME potential, wherever they are, and whatever their
ethnicity or gender.
I hope you enjoy today's event.
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