Current Debates
OPINION 23
Current Debates
Or take the Local Enterprise Growth Initiative( LEGI). Announced by the Chancellor in his 2005 Budget, it aims to release the economic and productivity potential of the most deprived local areas across the country through enterprise and investment. Through three national-level outcomes- increasing total entrepreneurial activity, supporting sustainable growth and reducing the failure rate of locally-owned business, and attracting investment and franchising into deprived areas- the LEGI programme resonates with the wider aim of ensuring that businesses, especially from economically under-represented groups, are able to access and maximise public and private investment channelled into creating and sustaining employment and enterprise.
Evidently, the relevance of SD is not limited to supply chain efficiency projects or the LEGI: workforce development initiatives, promoted by the Learning and Skills Council, can help under-represented businesses situate themselves in wider supply or value networks; City Growth strategies, which encourage businessled regeneration, provide an opportunity to ensure that SD is an organisational theme for public intervention when promoting community renewal; the New Deal for Communities programme can help facilitate local SMEs, especially BAME- and women-owned companies, access contracting opportunities in the re-development of places; and spatially focused programmes and actors such as Business Improvement Districts( BIDs) standard to meet‘ Best Value’. And in a global economy there are often parallel and competing drivers and policies in process- Ford champions SD through various initiatives across the world and
“ Supply chain development can help maximise efficiency and influence the nature, scale and participation of target businesses in economic activity- a clear aim of Supplier Diversity.”
and Urban Regeneration Companies( URCs), offer the chance to identify and assess how cross-cutting concerns- crime and sustainability, for instance- can be linked to diversifying local economies.
The context within which SD is being promoted, however, is characterised by a number of tensions. For example, the latest Budget highlights the value of SD. And yet it also points to an additional £ 200 billion in Public Finance Initiatives( PFIs) which may reduce the use of SMEs and sub-contactors in delivery.
There also remain some demand-side barriers: some public purchasers maintain that the European Procurement Directive and wider EC competition policy do not easily accommodate SD or some public purchases maintain that there are insufficiently diverse businesses to deliver goods and services of the necessary quality and yet its closing of a car manufacturing concern in the Midlands last year had severe implications for under-represented businesses in the region.
In many respects, the promotion of SD in the UK is still at an early stage. Nevertheless, as a policy and practical tool for enhancing economic development it offers enormous potential. Naturally, the test will be in applying further the‘ theory’ of SD in practice. But if stronger links with current initiatives to promote employment, enterprise and community renewal are forged, SD will have a lasting impact.
Dr Kemal Ahson is the Managing Consultant of Lifeworld Ltd. For further information about economic development, supplier diversity and procurement he can be contacted on kemal @ lifeworld. info
SPRING ISSUE 2006 engage