Social impact and sustainability: thinking big about supporting small business

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The “CSR” space is awash with initiatives run by large businesses to support and upscale small enterprises.

This is a good thing: SMEs are the backbone of the UK economy. In 2012 they employed 14.1 million people, nearly 60 percent of private sector employment. Since the economic downturn almost 9 out of 10 unemployed people who found work in the private sector either started up or worked for an SME. And they are extremely important to the economy and the communities in which they operate.

Yet, SMEs are struggling to access finance to start up and grow and get into larger company supply chains.

Past CSR initiatives have been relatively good at awarding start-up capital and teaching skills to build business, but the supply chain challenge has often highlighted the point where CSR programmes end and core business functions – such as procurement – begin.

It’s therefore commendable that Business in the Community (BitC) last week unveiled plans to change the culture by bringing procurement inside the tent when it comes to enterprise development activities that support corporate responsibility ambitions.

The campaign is backed by an impressive array of large businesses (IBM, Santander, RBS, Goldman Sachs, Anglo American, Deloitte, Lloyds TSB) and aims to support SMEs through real commercial opportunities.

The approach is emphatically not about positively discriminating in favour of small business – but in seeking to level the playing field to allow SMEs to compete for contracts. The areas businesses are asked to address range from simplifying and making tender processes more transparent, signing up to the Prompt Payment Code to assist SMEs with cashflow challenges, and being more proportionate when it comes to non-critical tender requirements e.g. not stipulating a supplier have multi-million pound insurance cover for a £25,000 contract.

The campaign is being supported by a range of programmes designed to connect suppliers and large customers through Meet the Buyer/Supplier activities whilst articulating the business case for greater engagement with SMEs (strengthened supply chain, enhanced innovativeness, increased financial return, improved reputation).

Of course, the encouraging thing about this initiative is not the “triumph of CSR over core business”, but the symbolic step towards ensuring corporate vision and values are jointly owned and creatively implemented across a business – not merely narrowly “addressed” by one, inevitably castrated, part of it.

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