With the growing yet limited understanding of what diversity, equity and inclusion entail, the world of work often restricts the focus in the space to simply hiring diverse talent. While that might be understandable as we tackle the gaps one step at a time, there is a need for businesses to recognise the far-reaching scope of diversity.
Beyond meeting only talent and consumer expectations around diversity through organisational culture and services, there is an urgency to acknowledge and enhance the focus on supplier diversity. What does supplier diversity mean though?
Supplier diversity encompasses empanelling a diverse range of qualifying suppliers to meet the business needs.
For a supplier to qualify as diverse, they must be at least 51% owned by people from the minority community like an ethnic minority (as defined in each country or region), or by women, military veterans, people with disabilities or LGBT individuals.
There are different types of diverse suppliers.
- LGBT++-owned, Minority-owned (this can include African American, Hispanic, Asian, Asian Pacific, Native American, and other ethnicities)
- Service-disabled veteran-owned
- Historically underutilised businesses (Also known as HUBZone businesses)
- SBA defined small business enterprises
We take a deeper look into the why and how of enabling LGBT+ owned businesses below.
The business case
Now, why think about supplier diversity? What’s in it for businesses? There are several benefits for businesses to gain should they meet their supplier diversity goals, that is if they have any. Many firms are leading the way in this regard. IBM, for example, was the first information technology firm to join the Billion Dollar Roundtable, an organisation that encourages businesses to increase their spending with diverse suppliers. Reportedly, in the past two decades, IBM has annually conducted:
- Greater than $1 billion in business with first-tier diverse suppliers in the United States
- More than $2 billion in business annually with first-tier diverse suppliers globally
The organisation believes that supplier diversity adds to their competitive advantage while stimulating growth in a global marketplace.
Yet another example is Johnson and Johnson. The healthcare brand announced that it aims to achieve Global Impact Spending with small and diverse suppliers amounting to $4.5 billion - a 20% increase from their 2020 spending.
“Maintaining a diverse and inclusive supplier base reflects the way we think about our business, our people, our innovation, our markets and our communities. We believe our differences are our strength, and our inclusive culture unleashes our potential,” said a company release.
“Our global supplier diversity and inclusion goal sets a new ambitious target that will galvanise our organisation to achieve an even more inclusive supplier network,” the company said.
While multiple organisations have been focusing on boosting supplier diversity, the shift pivoted by the pandemic has enabled them to tap into regions beyond their geographical presence as well. In fact, with increased diversity in the supply chain, a company can more easily expand into newer consumer demographics.
Industry researchers have identified multiple benefits of supplier diversity, including but not limited to:
- Better price options
- Better quality
- Flexibility & agility
- More jobs
- Marketing benefits
- Innovative economy
While the above are some gains for employers, there is more to why supplier diversity is important today. Businesses owned by underrepresented groups or minorities often face more hurdles than those faced by their privileged counterparts. Access to funding, networking, prevalent bias and discrimination, to name a few.
To eliminate the roadblocks for diverse suppliers, it remains critical to have well-constructed supplier diversity programs in place, thereby enabling growth for the entire business ecosystem.
An essential pillar of supplier diversity: The ‘Pink Economy’
Speaking of LGBT+ owned businesses, an emerging phenomenon is the ‘Pink Economy’. Also referred to as pink capitalism, this concept essentially talks about crafting and marketing products and services with LGBT+ individuals as the target consumer segment.
Research by Lorenzo Yeh(JunzuanYe) from the University of Barcelona describes Pink capitalism as a subgenre of capitalistic economy incorporating LGBT+ populations as current or potential customers.
“The major positive impacts of pink capitalism consist in remarkable economic benefits gained from LGBT+-specific business models, as well as possible socio-economic inclusion of LGBT+ in the marketplace and the society,” the study said.
Globally, the LGBT+ community is estimated to spend over $3 trillion annually. Fairly distributed across the globe, the top three regions with a booming pink economy are the US, Europe and China. In fact, according to a research by LGBT Capital, the combined buying power LGBT+ adults globally in 2019 was $3.7 trillion.
“There’s a lot of power in the pink dollar. A lot of people in the LGBTQ+ community are single and gainfully employed. They have far more disposable income than the married heterosexual persons, who have financial obligations towards their spouse and children,” Suhail Abbasi, co-founder and chairperson of The Humsafar Trust, an LGBTQ+ organisation founded in 1994, told the press highlighting the spending capacity of the queer community.
“By and large, the people from the LGBTQ+ community don’t have so many financial obligations; hence they can spend on themselves. They shop more, eat out more, entertain more because they can afford to,” Abbasi added.
Particular to India, the reading down of Section 377 in September 2018 provided a much needed opportunity to improve business outcomes by being queer-friendly, especially for the tourism and hospitality sectors.
Talking to the media about the impact of overthrowing the anti-gay law on Indian businesses, Indian hotelier Keshav Suri said, “It will have a massive economic impact. The ruling allows Indian and multinational companies to openly court India’s lesbian, gay, bisexual, transgender and queer consumers, as well as market India internationally as a destination that’s now more gay friendly.”
Back in 2015, an estimated 80 million people were out and proud in the country, and they had an estimated annual spending power of $90 billion, reports reveal.
The number has certainly gone up post the historic September 2018 verdict.
On the other hand, discriminating against the LGBT+ community could cost India around $26 billion a year, according to a World Bank report. Another 2018 report sponsored by Accenture, the Brunswick Group and Thomson Reuters, among others, found inclusive policies were linked to greater GDP per capita, competitiveness, entrepreneurship, urban development, talent retention and a better national reputation that could bring in additional direct investment.
It then begs the question - What can organisations do to eliminate this imbalance?
There is a clear need to not just hire queer talent and do business with diverse suppliers, but also enable equitable progress that encourages a sustainable livelihood for all on the spectrum. While access to jobs might not be available to all, organisations can curate specialised programs, fellowships and forums that nurture aspiring queer entrepreurs to pave the road to their financial independence.
Before we identify ways for organisations to boost the pink economy and enhance supplier diversity, let's explore a pathbreaking initiative by Pride Circle, among India’s leading diversity and inclusion consultancies focused on LGBT+ - Rainbow Bazaar
Rainbow Bazaar: Powering India’s Queerprenuers
Rainbow Bazaar is a unique & inclusive online marketplace for micro & small LGBT+ owned businesses in India. While this concept was introduced as a day-long in-person bazaar called Marketplace in Bangalore 2019 and Delhi 2020, it transformed into an e-Commerce platform in 2021, called Rainbow Bazaar.
Rainbow Bazaar is not just an opportunity for queerprenuers to showcase their products and services, but also a platform that brings shoppers to a dedicated marketplace that is run entirely by Queer folx.
In addition to enabling the prosperity of LGBT+ talent, Rainbow Bazaar provides a forum to empower homegrown businesses.
“One of the common challenges that companies face when engaging with small businesses is the lack of scale, companies find it difficult to empanel multiple small vendors. Small businesses miss on the opportunity of working with large corporations due to lack of scale,” said Ramkrishna Sinha, Co-Founder, Pride Circle.
“Rainbow Bazaar solves this and creates a win-win opportunity for small businesses & companies. Companies can source from multiple businesses and regions without having to onboard them, and the LGBT+ entrepreneurs can supply to large corporations without having to worry about scale,” he added.
Backed by the Pride Chamber of Commerce (PCC), Rainbow Bazaar remains a free and fair platform with no listing caps, while also ensuring 100% anonymity if one wishes to simply engage in business growth vs visibility.
“Rainbow Bazaar helps LGBT+ entrepreneurs reach B2B, B2C and B2G customers on a single platform. The ecommerce portal provides retail buyers (B2C) across India a way to buy from LGBT+ entrepreneurs, helps companies (B2B) meet their supplier diversity goals and also aims to engage with the government (B2G),” Ram said.
PCC is a bridge between organisations and the LGBT+ community. Since 2018, the institution has been enabling the story of LGBT+ owned micro and small business through a number of offerings — including growth and transformation via supplier diversity programs. The PCC can help you structure an inclusive supplier diversity program, drawing from businesses owned and run by members of the LGBT+ community.
How you can get involved
For organisations looking to support the LGBT+ community in more meaningful and sustainable ways, beyond Pride Month, Rainbow Bazaar serves as a tremendous opportunity to empower queer entreprenurs and their businesses. Changing social media logos won’t cut it anymore. Let’s talk about economic growth, employment and entrepreneurship.
If you are wondering where to begin and how to diversify your supply chain, Rainbow Bazaar yet again presents a catalogue of LGBT+ owned businesses that your organisation can engage with for various purposes.
As the pink economy continues to grow and organisations recognise the need for greater supplier diversity, a lot remains to be done to ensure authentic inclusion over pink washing.
Here are some immediate actions that organisations can undertake:
- Support LGBT+owned businesses
- Identify potential offerings to diversify the pink economy
- Say no to tokenistic queer-friendly branding. Concentrate efforts towards on-ground year-round inclusion, over pride month branding.
- Work towards tackling homophobia and discrimination in the supply chain
- Educate, empower and involve the LGBT+ community
The road to change is surely a long one. But inaction only delays that much needed shift in mindset and access to opportunities. By initiating action on the intent of equity for all, the corporate world can be the accelerator of economic progress for LGBT+ community, driving not just inclusion but fostering an ecosystem that invites innovation and celebrates uniqueness.
Rightly said by Ram, “Inclusion is not about doing 5 things differently, but the 1000s of things we do, review it with a lens of inclusion and tweak it if need be. Let’s pledge to find actionable ways to foster inclusion in all spheres of work."