March 2014

Diversity in the Economy and Local Integration (DELI)

context & concepts

SUPPORT TO MIGRANT-OWNED

BUSINNESSES

Why support migrant-owned businnesses? (I)

20 000

40 000

60 000

80 000

100 000

120 000

1998-2000 2001-2003 2004-2006 2007-2008

Average yearly number of new entrepreneurs, foreign-born, 1998-2008 - OECD

Austria

France

Germany

Italy

Netherlands

Spain

Sweden

United Kingdom

Because more and more migrants create businesses:

Why support migrant-owned businnesses? (II)

Because more migrant-owned businesses means more jobs for all:

100

200

300

400

500

600

700

800

1998-2000 2001-2003 2004-2006 2007-2008

Persons employed in firms of immigrant entrepreneurs, 1998-2008, thousands - OECD

Austria

France

Germany

Italy

Netherlands

Spain

Sweden

United Kingdom

Why support migrant-owned businnesses? (III)

Because migrant-owned businesses have a decisive impact on the

local economy:

Companies with a migrant backgroundmake up 30% of the local economy in Vienna

In Munich, there are over 12,000 immigrant-run businesses that have resulted in the employment of

over 100,000 people from all sectors of life

Not just ‘pizza & kebabs’: immigrant entrepreneurs work in ICT,

consultancies, transport, financial services, etc.

Why support migrant-owned businnesses? (IV)

• Because helping immigrants to fulfil their business aspirations and

to be part of the mainstream economy fosters their social

and cultural integration; strengthens their potential to

contribute to democratic life in society as active citizens; and

provides inspiring role-models to future generations.

• Because setting the conditions for entrepreneurship to strive

among immigrant communities help to make cities more

open and dynamic and strengthens their international

outlook.

Support migrant-owned businnesses: how

• Mapping and needs assessment of immigrant entrepreneurs

• Support from leadership and inter-departmental work for

immigrant entrepreneurs

• Services offered by a business support centre (coaching,

financing, mentoring, training etc), including their monitoring and

evaluation

• Cooperation with external stakeholders

• Recognition of immigrant entrepreneurs (awards, prizes, etc),

including role-model activities

SUPPLIER DIVERSITY

‘Supplier diversity’ is the proactive activity undertaken

by purchasing organisations to ensure that all relevant,

potential suppliers, including immigrant entrepreneurs,

have the fair and equal opportunity to compete

for business within their supply chains.

Supplier diversity is not about preferential treatment or

quotas.

Introducing ‘supplier diversity’

Supplier diversity…

• …addresses inequalities in visibility and access to information

• …seeks to ensure that all businesses have free and fair opportunity to

compete for places in a supply chain.

• …includes but is not limited to micro and small migrant-owned

businesses:

A migrant-owned business is an independent business that is at least

51% owned and controlled by one or more migrants; and whose

management and

Daily operation is controlled by one or more of the migrant owners

A micro business is comprised of less than 10 employees

A small business is comprised of less than 50 employees

Supplier diversity: benefits for cities (I)

From a socio-economic perspective:

• It helps to bring economic growth to deprived areas

• It provides economic opportunities to the migrant population

• It builds harmonious communities through social inclusion

• It creates good public relations for municipalities (as a large

employer in an area) and demonstrates investment in the migrant

community – as an economic asset rather than a drag on public

provisions.

From a procurement perspective:

• Migrant suppliers’ knowledge about their communities; they are well-placed to

appreciate and satisfy their community’s preferences -this is particularly

relevant where specialised products and services are concerned

• It creates a wider candidate pool brings wider choices which brings access to

innovation and flexibility into supply chains

• It aligns supply chains, products and services with increasingly diverse

communities and service users

• It extends workforce equalities and diversity activity to the supply chain

• It stands as a tangible example of Social Return on Investment

Supplier diversity: benefits for cities (II)

Supplier diversity: benefits for the private sector

• It aligns supply chains, products and services with increasingly diverse consumers

and potential clients

• It creates a wider candidate pool which provides wider choices which in turn brings

access to innovation and flexibility into supply chains

• It extends workforce equalities and diversity activity to the supply chain

• It mitigates reputational risk and enhances reputation

• It stands as a tangible example of Corporate Social Responsibility (CSR)

• It supports EU and national legislation on anti discrimination, equality and diversity

policies and internal equality and diversity policies

• Public sector clients may require private sector suppliers to push certain social

obligations through their supply chains e.g. social issues, equalities and

sustainability

• The local knowledge of migrant suppliers about their communities means that they

are well-placed to appreciate and satisfy existing and potential customer needs

• Migrant businesses often lack the relevant information and capacity to bid for

public or private sector contracts.

• There is a lack of awareness among large purchasing organisations, including

public sector organisations, of the potential migrant-owned supplier base and

an inability of these businesses to identify and exploit opportunities in

mainstream corporate and consumer markets.

• There is a perception among established migrant entrepreneurs that contract

opportunities are not being made available to them even though they have the

capability to deliver contracts

Supplier diversity: benefits for migrant businesses

DIVERSITY & EQUALITY CLAUSES IN PUBLIC CONTRACTS

Public procurement – why should we care? (I)

Thresholds – EU rules & national rules

Public procurement globally accounts for about 17% of EU

GDP - a sum equivalent to half the GDP of Germany

Local authorities issue 30% of procurement notices that

fall under EU rules

Public procurement – why should we care?

Buying goods and services in a socially

responsible way is a democratic duty for public

authorities. People expect governments to spend public

money in a way that serves the public good, particularly at times

of economic crisis.

Using social clauses…

‘Social clauses’ require contractors to employ persons who are in a

disadvantaged position on the labour market.

• No EU statistics on socially responsible procurement.

• In France, social clauses are included in 4.3% of public contracts

above 90K€ in 2012, up from 1.9% in 2009. Local authorities are

in the lead: 7.3% of their contracts include a social clause.

…and diversity and equality clauses

Diversity and equality clauses require contractors to change

their employment practices and to develop diversity and

equality policies that prevent discrimination and promote equal

opportunities.

Thank you for your attention

www.migpolgroup.com