Competing Agendas in Public Procurement: An Empirical Analysis of Opportunities and Limits in the UK for SMEs

Abstract

Introduction In the aftermath of the global economic crisis, the public sector is likely to face a prolonged period of fiscal austerity, with potentially significant consequences in its procurement of private sector goods and services. We deal with an important related aspect of the public procurement regimeönamely, that, whilst the primary aim of public procurement is likely to remain value for money, procurement policies can also promote the development of small and medium-sized enterprises (SMEs) through strategic purchasing decisions. Support for SMEs has become an important component of many economic policies to promote sustainable competitive advantage (see, for example, Greene et al, 2008). There has also been an increasing recognition that public procurement is an important way by which governments can assist SMEs (see EEF, 2010), simultaneously reducing the need for direct financial support and improving the delivery of government services (Loader, 2007), as well as promoting diversity (CBI, 2009). Beaver and Prince (2004), for example, see procurement by public authorities as a key instrument to maximise the SME contribution to UK economic growth in general, and to local and regional economies in particular (Storey, 1994). UK central government policy makers have also stressed the role of SMEs in public sector procurement processes in broader terms, in particular as a means to develop sustainable communities (ODPM, 2003). Elder and Georghiou (2007) also argue that the UK has the``most systematic and advanced approach'' (page 952) to public sector demand-influencing innovation, through policies expressed by the

The rhetoric and reality of SME-friendly procurement

“…A number of studies have averred to the uneasy mix of policies and competing agendas that govern the procurement field (Erridge, 2007;Fee, 2002;Pickernell et al 2011;Schapper et al 2006). In practice this means that public buyers are under pressure to maximize value for money while complying with laws and directives and supporting socio-economic goals.…”

Anchoring the innovation impacts of public procurement to place: The role of conversations

“…These impediments differ from place to place and at different levels of government (Pickernell et al, 2011). Cities and regions (or small states) often lack sufficient administrative and financial capacities to undertake PPI, and are more likely to depend on nation-state level regulation and financing, and to be exposed to rentseeking and other corrupt practices (Dale-Clough, 2015;Georghiou et al, 2010;Lember et al, 2011).…”

“…The last decade or so has seen a renewed interest in the potential of public procurement to stimulate business innovation and accelerate the diffusion of new technologies (Edler and Georghiou, 2007;Pickernell et al, 2011). The literature has actively engaged with definitional issues and typologies around what precisely constitutes PPI, in an effort to better conceptualize and categorise PPI related interventions (e.g.…”

“…However the geographical dimension of these practices is seldom discussed. There is a limited understanding of what public procurement can achieve at multiple levels of government (Pickernell et al, 2011), and the potential role (if any) that public procurement can have in local and regional competitiveness (Lember et al, 2011). Sub-national levels typically have key budgetary and decision-making responsibility for the provision of public services, yet they are seen as lacking the scale, capabilities and resources to drive innovation through public procurement (see e.g.…”

“…Sub-national levels typically have key budgetary and decision-making responsibility for the provision of public services, yet they are seen as lacking the scale, capabilities and resources to drive innovation through public procurement (see e.g. Lember et al, 2011;Pickernell et al, 2011;Ferreira da Cruz et al, 2013).…”