Procurement with Purpose: How Diverse and Small Suppliers Are Shaping the Future of Inclusive Supply Chains

In today’s rapidly evolving business landscape, supplier diversity has become a cornerstone of ethical sourcing, innovation, and inclusive economic development. Particularly in the UK and Europe, procurement professionals are shifting from traditional CSR models to strategic sourcing initiatives that intentionally support small and diverse suppliers—including women-owned, ethnic minority-owned, LGBTQ+-owned, disabled-owned, and veteran-owned enterprises. 

The recent episode of the Art of Procurement podcast, titled “Real Talk about Supplier Diversity in 2025,” spotlights a major shift in corporate language and strategy. Many corporations are now avoiding the term “diversity” altogether and instead framing their programmes around “small and underrepresented suppliers.” This rewording reflects a cautious reaction to political and social pushback—particularly in the U.S.—but also opens new doors for platforms like GoDiverse to redefine supplier diversity messaging around equity, accessibility, and growth for all. 

The Rising Role of Small and Diverse Suppliers 

Small and Medium Enterprises (SMEs) account for 99.9% of all UK businesses and employ over 16 million people, according to the Federation of Small Businesses (FSB). These enterprises are not only the backbone of the British economy but also powerful drivers of local job creation, regional investment, and community development. Yet, despite their importance, many SMEs—especially those owned by underrepresented groups such as ethnic minorities, women, LGBTQ+ individuals, and people with disabilities—remain significantly underrepresented in public and corporate procurement pipelines. 

This underutilisation presents both a challenge and a strategic opportunity. According to Procurement Tactics (2024), businesses that actively incorporate small and diverse suppliers into their procurement strategy experience a 133% greater return on procurement investment compared to those that don’t. Moreover, organisations with inclusive supplier networks report 20% lower procurement costs, driven by improved innovation, competition, and responsiveness. 

Unlike larger suppliers that often follow rigid structures, small and diverse suppliers tend to be more agile and adaptable, allowing them to deliver tailored solutions and respond quickly to shifting market demands. They often offer specialised knowledge, particularly in niche areas, and are deeply embedded in their local communities—enhancing supply chain resilience and promoting inclusive growth. 

Engaging with these suppliers also aligns with ESG (Environmental, Social, Governance) and social value objectives, especially as the Procurement Act 2023 mandates public sector buyers to maximise community impact. Supporting small and diverse suppliers is no longer a moral obligation—it’s a business imperative. 

Social Value in Public Procurement: The 2023 Act 

A major game-changer in the UK procurement landscape is the Procurement Act 2023, which officially came into effect this year. This new legislation builds on the foundation laid by the Public Services (Social Value) Act 2012, but goes several steps further. While the 2012 Act merely encouraged public bodies to “consider” social value, the 2023 Act makes it mandatory for contracting authorities to “have regard to the importance of maximising public benefit” in every procurement decision. 

This means that social value—especially around sustainability, inclusivity, and economic equity—is no longer optional. It’s baked into the procurement process and places greater responsibility on buyers to go beyond lowest-cost criteria. The Act aims to drive fairer, more transparent procurement that boosts innovation, regional economies, and access to opportunity—especially for small businesses and diverse suppliers. 

Public sector bodies must now evaluate bids not only on cost-effectiveness and quality but also on the social impact created. This includes support for local employment, environmental responsibility, ethical sourcing, and community wellbeing. Platforms like GoDiverse play a key role in enabling this shift. By offering a centralised and verified database of diverse and small suppliers—including those self-certified or certified by organisations like MSDUK, WEConnect International, OutBritain, and Social Enterprise UK—GoDiverse makes it easy for buyers to meet social value requirements while sourcing from suppliers aligned with their ESG goals. 

This is not just a compliance measure—it’s an opportunity. By aligning procurement with purpose, UK businesses and public authorities can ensure that every pound spent generates meaningful, long-lasting impact. 

Why the Shift in Language Matters: From “Diversity” to “Inclusion” 

In 2025, the language of procurement is evolving. Across global markets, especially in the UK and Europe, corporations are moving away from using the term "diversity" in procurement messaging. This shift is largely influenced by sociopolitical changes in the United States, where supplier diversity programs have been increasingly politicised. As a result, UK-based companies are adopting broader, more inclusive terms like "supplier inclusion," "small business engagement," and "ethical sourcing" to maintain alignment with procurement best practices without triggering political sensitivities. 

However, this isn’t a retreat from the core values of inclusive sourcing—it’s a strategic pivot. Companies remain deeply committed to engaging small businesses and underrepresented suppliers such as women-owned, ethnic minority-owned, LGBTQ+, disabled, and veteran-led enterprises. By framing these efforts within the broader umbrella of inclusive procurement, organisations can continue to meet their ESG and social value goals while navigating evolving public and stakeholder expectations. GoDiverse, with its flexible platform, recognises this change and allows diverse and small suppliers to connect with buyers regardless of whether they hold third-party certifications, enabling greater accessibility and visibility. 

Innovation and Agility: The Untapped Strength of Diverse SMEs 

Diverse and small suppliers are uniquely positioned to offer value beyond traditional procurement metrics. Numerous studies, including those by McKinsey and the Hackett Group, highlight that diverse supplier networks foster innovation, increase adaptability, and promote sustainable growth. Unlike large corporations that may be hindered by rigid hierarchies, small businesses tend to be more agile, capable of implementing new ideas quickly and adapting to change with minimal lag. 

This was especially evident during the COVID-19 pandemic, where companies with a diversified supplier base, including small and minority-owned businesses, reported greater operational stability. These SMEs demonstrated the ability to swiftly pivot, adopt digital tools, and modify sourcing strategies in response to global disruptions. In an increasingly uncertain world, this resilience makes small and diverse suppliers indispensable partners in future-proofing supply chains. 

The GoDiverse Advantage: Streamlining Inclusive Procurement 

GoDiverse stands at the forefront of the shift towards inclusive procurement. Our UK-based platform is designed to lower the barriers that traditionally prevent small and underrepresented businesses from entering corporate supply chains. Suppliers can register and self-certify within minutes, allowing them to build professional profiles and get discovered by companies actively looking to diversify their sourcing. 

What sets GoDiverse apart is its use of intelligent matchmaking tools. Suppliers are matched with corporates based on business category, service area, and inclusion goals. Corporate buyers, in turn, gain access to real-time insights such as supplier engagement, certification timelines, and whether a business is already in their ecosystem. With the UK’s Procurement Act 2023 putting social value at the heart of public sector contracts, GoDiverse ensures that buyers can meet their obligations while creating economic opportunity for underserved communities. 

The Social and Economic Imperative of Inclusive Procurement 

Inclusive procurement is not just ethically responsible—it’s economically strategic. A 2023 report by the Department for Business and Trade stated that increasing SME participation in public procurement by just 10% could inject an additional £30 billion into the UK economy each year. Small suppliers—particularly those from underrepresented backgrounds—tend to reinvest in local communities, create employment, and fuel innovation across industries. 

By engaging diverse SMEs, organisations build more resilient supply chains, reduce over-reliance on a limited number of vendors, and reflect the communities they serve. This alignment also supports brand reputation, helps businesses win tenders with social value scoring, and positions them as leaders in ethical sourcing. 

Moreover, research from Social Enterprise UK shows that social enterprises—many of which fall into the diverse SME category—are twice as likely as traditional SMEs to be led by women and significantly more likely to be operating in economically disadvantaged communities. Supporting these businesses through procurement channels doesn’t just drive equality; it contributes directly to levelling up regional economies and closing opportunity gaps. 

For corporations, working with a wider network of small, diverse suppliers can also improve supplier innovation, customer alignment, and operational flexibility. Inclusive procurement is not a compliance checkbox—it’s a smart business strategy that delivers tangible impact and long-term value. 

Looking Ahead: Procurement in 2025 and Beyond 

As the conversation shifts from diversity to inclusive sourcing, the core principles remain intact: equitable opportunity, resilient partnerships, and sustainable business practices. Small suppliers are gaining more attention, not just as a diversity metric, but as essential contributors to long-term supply chain health. With the Procurement Act 2023 and growing pressure from socially conscious consumers, the future of procurement lies in collaboration, transparency, and inclusion. 

GoDiverse is proud to champion this movement. Whether you're a diverse supplier seeking visibility or a buyer pursuing inclusive procurement goals, our platform is here to bridge the gap. The rise of supplier inclusion marks the beginning of a new chapter in procurement—one that places ethics and equity at the core of business success.