Why Buy from Small and Diverse Suppliers

The recent decision by the U.S. government to terminating diversity, equity, and inclusion (DEI) programs “in the federal workforce, and in federal contracting and spending” has raised significant concerns.

The US government argues that DEI initiatives, such as contracts set aside for small and diverse suppliers, are a “public waste” and hurt the federal government’s performance.

Many studies including this study published by Harvard Business Review show the opposite.

I think it’s important to highlight some of the reasons why it is still a business imperative for companies to continue buying from small and diverse companies, not only in the US but globally;

1. Economic Impact: Small and diverse businesses are vital to local economies. In the US they generate about 67 cents of every dollar spent within the community. In the EU SMEs account for about 99.8% of all active businesses in the region. This reinvestment fosters job creation and economic resilience, which benefits everyone.
2. Innovation and Agility: Diverse suppliers often bring unique perspectives and innovative solutions that can improve your supply chain’s adaptability. Companies with diverse supplier networks have weathered disruptions better in the past and demonstrated their value in times of uncertainty.
3. Competitive Advantage: Engaging with small and diverse suppliers can lead to cost savings and improved procurement performance. Research indicates that companies in the top quartile of spending on diverse suppliers save additional costs in procurement expenditures.
4. Brand Reputation: Companies that prioritize diversity in their supply chains enhance their brand perception among consumers who increasingly value corporate social responsibility. Supporting diverse businesses is not just about compliance; it’s about aligning with the values of today’s consumers.
5. Community Support: By choosing to work with small and diverse businesses, companies contribute directly to the vitality of their communities, helping to create a more equitable marketplace for all.

For my part, I will continue to do what I believe is right and am committed to promoting diversity and inclusion in the supply chain as a strategic advantage that drives growth, innovation and equal treatment for all.

Sources:
https://hbr.org/2025/02/the-case-for-federal-programs-that-help-small-and-diverse-suppliers
https://www.gsa.gov/about-us/newsroom/news-releases/gsa-announces-actions-to-advance-equity-and-supplier-diversity-in-federal-procurement-04182022
https://c2fo.com/resources/esg-and-diversity/4-reasons-why-you-should-support-diverse-owned-businesses/
https://supplier.io/resources/blog/key-trends-for-supplier-diversity-programs-and-procurement-teams-in-2025
https://beveragemixers.com/blogs/psw-blog-posts/why-buying-from-small-business-is-good-for-us-all
https://www.jacksonlewis.com/insights/ensure-your-supplier-diversity-program-meets-legal-requirements-and-thrives
https://www.bain.com/insights/buying-better-the-benefits-of-supply-chain-diversity/
https://www.winston.com/en/insights-news/executive-order-changes-requirements-for-affirmative-action-plans-and-other-dei-programs
https://www.weforum.org/stories/2021/05/does-your-organization-buy-from-diverse-businesses-here-s-how-you-can-make-a-difference-today/
https://www.bidsandtenders.com/buyers-resources/7-benefits-to-engaging-small-local-and-diverse-suppliers-in-procurement-opportunities/