DETROIT, May 5, 2021 /PRNewswire/ -- Michigan Minority Supplier Development Council President and CEO Michelle Sourie Robinson announced today at the organization's 2021 Michigan Minority Procurement Conference the results of a study on economic equity for people of color — which showed that at current growth rates, it will take a stunning 333 years for Minority Business Enterprises (MBEs) to achieve revenue equity with white-owned businesses in our nation.
Robinson said that increasing supplier diversity remains a major challenge, and that achieving parity would bring a significant boost to the overall economy. For example, achieving parity between Black-owned and white-owned businesses would add $290 billion in overall wealth.
She said a key solution to shortening the timeline is a deliberate and intentional focus on minority firms access to and spending from corporations.
"This research makes it crystal clear that the current path is one we cannot continue if we wish to achieve economic equity for people of color in our lifetimes," Robinson said. "Corporations who understand that strong communities create strong customers, strong employees and strong neighbors, must re-commit to providing access for MBEs to compete for all aspects of their business. If all corporations grow their MBE spend percentage by 1% annually, the timeline to achieve parity would improve from 333 years to 15 years."
Dr. Bernice King, daughter of Dr. Martin Luther King, Jr., and keynote speaker at the MMSDC's 2021 conference discussed her father's focus on economic equality explaining that he believed racial and economic injustice were inseparable twins.
The report being produced today was commissioned by the MMSDC, and analysis conducted by supplier.io Inc., to assess the growth rate of MBEs and determine the gap that remains in revenue parity for MBEs, relative to the number of minorities in the United States.
Supplier.io, led by Founder and CEO Neeraj Shah, is a provider of solutions that enable companies to manage, optimize, and scale their supplier diversity programs, serving one in five Fortune 50 companies. Study sources included data from the National Bureau of Economic Research, U.S. Census Bureau; Brookings, Crunchbase and more. To access the full research findings, please visit minoritysupplier.org/333-years/.
The research shows that the average MBE percent to total spend is 3.29 percent and needs to increase to between 13 percent and 16 percent (excluding only payroll and taxes) to achieve parity.
Among other results of the research:
- MBEs drove 14.2 percent of new jobs from 2014-2018, but collected only 7.2 percent of revenue growth during that same period.
- During the pandemic, minority businesses were impacted more severely, with Black-owned business down 41 percent, Latinx-owned business down 32 percent and Asian-owned business down 26 percent. In comparison, white-owned firms fell by just 17 percent.
- In 2018, people of color represented 40 percent of the U.S. population, but revenues from MBEs represented only 9.4 percent of revenues by private U.S. firms.
- From 2014 to 2018, there was only a 1.25 percent increase in the number of MBE firms with more than $1 million in revenue, reaching 17.4 percent. In that same time span, revenues only increased from 8.8 percent to 9.4 percent.
By 2045, people of color are expected to make up more than 50 percent of the U.S. population. Companies that are not responsive to this growing customer base are more likely to be left behind, which is another incentive for MBE spending growth.
Robinson said: "After decades of stagnation, it's time for corporations to go beyond words, and take actions that help create lasting wealth within communities of color. By doing so, ALL communities will benefit."
In the study findings, the "Path to Parity" recommendations include:
- Consider MBE spending across all categories. Go beyond construction and manufacturing and look into technology and professional services, too.
- Help create viable pools of MBEs by removing barriers to access. Black and Hispanic businesses only received 2.6 percent of all venture funding in 2020, for example. Increased access to capital will accelerate revenue growth among certified minority businesses.
- Help to train the next generation of minority business owners, giving them the knowledge to one day start their own businesses.
- Incorporate achievable goals and metrics to quantify the corporate benefits of supplier diversity and small business programs. For many years, organizations have promoted the need to support small and diverse businesses, yet most rarely establish an industry-wide project plan to do so.
Click here to view today's fireside chat with MMSDC President and CEO Michelle Sourie Robinson and Dr. Martin Luther King's daughter, Dr. Bernice A. King.
To schedule an interview with MMSDC President and CEO Michelle Sourie Robinson or with Supplier.io CEO Neeraj Shah about these research findings and the importance of allowing certified minority suppliers to compete for business, please contact Leslie Pardo at 248-563-7213.
About Michigan Minority Supplier Development Council
The Michigan Minority Supplier Development Council (MMSDC) is a non-profit, 501(c)3 organization committed to driving economic growth within minority communities. The MMSDC advances this mission by facilitating over $36 billion annually in economic output between corporations and certified minority business enterprises (MBEs).
Founded in 1977, the MMSDC certifies minority businesses, develops their capacity and facilitates inclusive procurement opportunities. The MMSDC is one of 23 affiliates of the National Minority Supplier Development Council (NMSDC), a nonprofit corporate membership organization that advances business opportunities for its certified Asian, Black, Hispanic, and Native American business enterprises and connects them to its corporate members. One of the country's leading corporate membership organizations, NMSDC was founded in 1972 to provide increased procurement and business opportunities for minority business enterprises.
SOURCE Michigan Minority Supplier Development Council