SMEs in Public Procurement

Practices and Strategies for Shared Benefits

image of SMEs in Public Procurement

The relevance and economic implications of public procurement – which represents 12% of GDP and one-third of government expenditures in the OECD area - make it a powerful tool for improving public service delivery. At the same time, governments are increasingly using their purchasing power to pursue strategic objectives in different policy areas such as sustainability, innovation or providing support to small and medium-sized enterprises (SMEs). Making it easier for SMEs to access public procurement opportunities improves the general economic environment, promotes inclusive growth and supports principles such as equal treatment, open access and effective competition. This report takes stock of the approaches adopted in 37 OECD and non-OECD countries to help SMEs perform better in public procurement markets, including removing barriers to their participation. The report also describes the main features of a public procurement system that benefits both the public sector and SMEs.



Public procurement and SMEs: Why the relationship matters?

This chapter discusses the rationale behind promoting SME participation in public procurement policies, and countries’ efforts to support their involvement. Given their considerable purchasing power, governments can avail themselves of sizeable funds to pursue diverse public policy objectives while using taxpayers’ money efficiently. SMEs meanwhile form the backbone of economies worldwide and are often the primary focus of economic policies. This chapter unveils the linkages between comprehensive public procurement strategies that countries implement and the development of SMEs, highlighting the mutual benefits achieved through closer and greater engagement between small businesses and the public sector. The chapter demonstrates that while SMEs’ access to the public procurement market constitutes one of many elements that are essential for their performance, the wide array of efforts developed by countries through public procurement reforms in fact diffuses beneficial effects across the entire SME business environment, and affect multiple policy areas.


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