Series: Why Supply-side Diversity hasn’t worked ~ Editorial


From the Desk of Rudy Sutherland | 8-PAC Editor

According to the Supply-Side Diversity doctrine developed and practiced by private sector corporations since the 1970’s, entities developed internal supplier-diversity teams who administratively recruit and track diverse businesses to do business with them – to increase and expand corporate capacity to “supply” goods and services. They also developed (and funded) the National Minority Supplier Diversity Council (NMSDC) to maintain and report a measurement of the amount of spend they accomplished with this diverse business pool.

However, because neither the NMSDC nor its affiliates are audited by an objective third party, Supply-Side Diversity is merely the “fox watching the hen-house”.  Essentially, there is nothing to make sure diverse spending is actually taking place, especially with minority owned firms. In fact, empirical statistics seem to prove otherwise.                                                                                                           

Supply-Side Diversity; voodoo economics

Corporations simply select of few “insiders” or firms that are “in the loop”, to quote Richard Huebner, President of the Houston Minority Business Council (HMBC); to allocate their spend too…insure the right media spin occurs; and voila! It appears that diverse businesses are developing increased capacity – never mind that the spend is with a “chosen few” … and that the goods and services provided are not in areas core to the corporations’ business model (more on why this is important in future posts).

In short, without the ability to ensure that the alleged spend is, in fact, occurring as methodically shared with “corporate friendly” media outlets– Supply-Side Diversity cannot, and has not, ensured any real linkage between small business growth and the hoped-for capacity increase of minority owned businesses 

Revealingly, Supply-Sider organizations like the NMSDC strenuously resist calls to tie self-reported performance to actual and objective measures; that is, give corporations credit only AFTER empirical third-party validation.

This has led critics like 8-PAC to suspect the real motives behind this Brand of Diversity. The only thing that was ever certain with this model was that the large corporations and their shareholders would become richer while diverse businesses simply languish as the spin-doctors purport gains that simply can’t be objectively justified. Beyond that, it is all just wishful thinking and “voodoo economics”.

We suggest you catch-up on our previous posts regarding the NMSDC (Visit the “NMSDC” Topic Category and the “National Minority Supplier Diversity Council” tab).

As we prepare to transition into the 2008 General Election cycle for the next President of the United States; we will begin anew the Policy debate regarding the need for Demand-Side Diversity in the Public and Private Sectors. 

Let the dialogue begin!


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