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OECD (2018), SMEs in Public Procurement: Practices and Strategies for Shared Benefits , OECD Public Governance Reviews, OECD Publishing, Paris.
https://doi.org/10.1787/9789264307476-en
Governments are increasingly using public procurement as a strategic governance tool for promoting inclusive and sustainable growth while ensuring value for money. Public procurement represents approximately 12% of gross domestic product (GDP) and 29% of total government expenditures in OECD countries; as such, its potential impact on a range of policy objectives is significant.
SMEs can play a pivotal role in helping governments ensure that the benefits of globalisation, open markets and digitalisation are broadly shared across societies. SMEs account for more than half of employment globally and, on average, 50% to 60% of national GDP in OECD countries, while being strongly connected to local economies. They are thus significant players in the economy as well as important agents of social cohesion and integration. Consequently, governments strive to provide supportive business conditions, including in terms of public procurement, that allow SMEs to achieve their growth potential by participating in domestic and global value chain.
This report takes stock of the policy options used in OECD and non-OECD economies to integrate SME considerations in public procurement. This first analysis of countries strategies and practices in helping SMEs thrive through public markets complements existing work on the use of public procurement for pursuing broader policy objectives, from reinforcing integrity in the public sector to promoting innovation and environmental sustainability.
The OECD 2015 Recommendation on Public Procurement lays out guiding principles for countries on how to strike the right balance so that public procurement systems both support SMEs and facilitate access to public procurement markets for competitors of all sizes. In practice, this raises many challenges that can be addressed through a wide array of policies ranging from explicit measures promoting SMEs to strengthening SMEs capacity to win public contracts.
The report identifies the major components of a public procurement system that is conducive to SMEs participation while accounting for their heterogeneity. It further demonstrates how broader development programmes can bolster SMEs capacities to better respond to the needs of public entities. Yet, highlighting the limitations of existing strategies and practices, it also calls upon countries to reinforce their efforts to support SMEs through public procurement markets as well as to exploit potential synergies with other government initiatives to promote SMEs.
Marcos Bonturi
Director
OECD Public Governance Directorate
This report was prepared by the OECD Directorate for Public Governance as part of its mission to be the leading international source of policy solutions, data, expertise and good practice for governments and other stakeholders seeking to strengthen public policymaking and the strategic capacity of governments.
Under the direction and oversight of Marcos Bonturi, OECD Director for Public Governance, and Jnos Bertk, Head of the Public Sector Integrity Division, this report was prepared by Minjoo Son, Policy Analyst, guided by Paulo Magina, Head of the Unit, and Matthieu Cahen, Deputy Head of Unit, from the Public Procurement Unit of the Public Sector Integrity Division. Preliminary works on building the evidence base were carried out by Kjersti Berg, Senior Adviser on Public Procurement and Innovation, Agency for Public Management and eGovernment, Norway, who was seconded to the OECD from January to October 2017. Inputs were also provided by Andy Cochrane, Kenza Khachani, Lena Diesing, Agnieszka Szczypiska, Fleur DSouza and Lara Gruben. Editorial assistance was provided by Andrea Uhrhammer and Randy Holden. The report was prepared for publication by Meral Gedik, Thibaut Gigou and Laura McDonald. Alpha Zambou provided administrative assistance.
This report was prepared in close consultation within the OECD, especially with the Centre for Entrepreneurship, SMEs, Regions and Cities, as well as the Directorate for Financial and Enterprise Affairs, Economics Department, Trade and Agriculture Directorate, and Directorate for Science, Technology and Innovation. In particular, it benefited from valuable comments by Lucia Cusmano, Peter Hoeller, Chris Pike, Despina Pachnou, Silvia Appelt, Fernando Galindo-Rueda, Julien Gourdon and Pinar Guven.
This report integrates data and evidence collected through 2017 OECD Survey on Strategic Use of Public Procurement to Support SMEs. Responses were received from 32 OECD countries Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Mexico, the Netherlands, New Zealand, Norway, Poland, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom and 5 non-OECD countries Bulgaria, Colombia, Costa Rica, Thailand and Ukraine. Some SME and business associations were consulted through questionnaire disseminated through the Business and Industry Advisory Committee (BIAC) to the OECD.
It benefited input from senior public procurement officials participating in the OECD Working Party of Leading Practitioners on Public Procurement. The report was approved by the Working Party on 6 September 2018 and declassified by the Public Governance Committee on 24 September 2018.
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