Natalie Madeira Cofield, a former assistant administrator for the Office of Women’s Business Ownership at the U.S. Small Business Administration (SBA), made the business case for Diversity, Equity and Inclusion (DEI) in her keynote address at the Foundation for Education Education's DEI Conference on Jan. 25, saying that DEI can lead to increased market share.

Cofield was the highest ranking African-American woman at the SBA. The founder and former CEO of Walker’s Legacy, a digital platform for entrepreneurial women of color, she brought her perspectives based on her 25 years of experience “colored and painted by my intersection of government, business and nonprofit.”

“My hope is that, in 2023, we understand the reason, rationale and value behind DEI,” she stated at the outset, asserting that it provides ways to understand and engage, giving businesses the “benefit of being able to leverage and increase market share.”

“Diversity is an appreciation of and prioritization of different backgrounds, identities and experiences that people and collectively share as individuals, and it basically emphasizes a need for representation of communities,” she said. “The beauty of diversity is that everyone should be engaged and should be heard and should be a participant. We all have something to learn from one another.”

Equity provides “levels of support based on a need to achieve fairness and what it means to have an outcome for a group,” she said. “Equity empowers communities impacted by some forms of oppression.”

Cofield expanded on the importance of equity with an anecdote that conveyed the significance of understanding those who may have experienced some form of oppression. She told the attendees that it was not until 1988 that women no longer needed a co-signer on certain financial forms, such as those needed to take out loans or life insurance policies. She termed that an example of systemic oppression, one that had direct implications for how women could become entrepreneurs and business owners.

Once those regulations ended, the number of women-owned businesses grew from 400,000 to 11 million, out of a total of 32 million small businesses in the United States. “Now, [women] are [also] well represented in leadership roles in education and [are an] increasing presence in leadership roles in Corporate America.”

Cofield had worked with women who had tried to start businesses in the mid-1980s and, in her dealings with them, found that "they felt seen when I told them that I was aware of that regulation. ... It is a fact and it did have implications as we engaged that community. Be aware of that as you may meet women who may have had that experience.”

Defining inclusion as “a state of belonging when people belong to different backgrounds, experiences and identities,” she then talked about new ways in which DEI is playing out in the world.

“A person can fit into many different spaces and categories at once,” she said, using the examples of gender identity and gender neutrality. “There are not just two kinds of spaces in which people want to be seen. Be respectful of that.”

She also said that there are forms of diversity beyond religious affiliation, gender (which she noted is not synonymous with sexuality), and ethnicity (which she noted is not synonymous with race), such as culture, language, food and professional experience. “All of these things are ways in which diversity is being defined,” she said.

“Why this matters now is because the majority of millennials and below [such as Generation Z] are identifying as being multicultural—and, so, this is the new broad general market,” she said.  “More than 50 percent of Gen Z-ers and millennials identify as being multicultural. Understanding these nuances is important and is required for the continuous existence of a business.”

Changing demographics are also important for that continued existence, Cofield said. To illustrate, she listed projected changing demographics within the country: By 2050, the Hispanic population is estimated to double from 15 percent to 30 percent of the U.S. population, and the Asian population from 5.1 percent to 9.2 percent. In addition, the African-American population is expected to increase from 41.1 million to 65.7 million. These populations represent the general market now, she said, with nearly $3 trillion in spending power.

“It is impossible to bring anything to market without there being an international incorporation of a diversity of perspectives, ideologies, thoughts and considerations in doing so,” she said.

That incorporation extends to the workplace, she said.

“What smart folks say is that workplace diversity is the most important predictor of a business’s sales revenue, customers and profitability,” she said. “You will make more profit, make more revenues, increase your sales, [and] increase the success trajectory of the organization by incorporating diversity equity inclusion initiatives, practices and considerations.”

Building a diversity pipeline is also a talent issue, she said.

Despite recent layoffs in technology industries and sectors, she said, “There still remain high-skilled labor and high- skilled jobs that are unfilled in the United States today, and the talent pipeline for those skills [is] going to be cultivated amongst the very diverse groups of people across the country,” she said. “It increases your supplier development and growth, it increases market penetration, and it diversifies your brand visibility and awareness—all of which are critical and important functions.”

Diversity is also tool of business sustainability, she said because a diverse team can challenge entrenched perspectives and business practices. For example, Xerox developed the graphical user interface (GUI), but “gave up on it because the company did not see the commercialization capabilities of it," she said. Apple and Microsoft were created by young individuals who were excited about taking such innovations to the next level,” she added.

Another Rochester, N.Y.-based industrial mainstay, Kodak “did not monetize digital images or bring them to market. …The next thing you know, you’ll see a business like Instagram being sold for billions and Kodak going under, … impacted by lack of innovation.”

“[That is] what happens when you have an insular community not engaging outside of its four walls and not bringing voices of the future to the table,” she said.

Cofield concluded by encouraging “all to think about how to increase our cross-cultural social capita quota. In business, … building relationships is about the language that you use, the values and the etiquette that you have, the tone that you take with people, and the clustering that happens.”

“Diversity presents a strategic and long-term [return on investment] potential and, therefore, diversity is about growth and market,” she said. “A diversified staff can create the gateway to global connections that you don’t want to miss out on.”