Every year, a staggering amount of capital, estimated to be in the order of $10 trillion globally, flows through public procurement systems. These systems are established by governments to source, buy and deliver public goods and services to their citizens. They are essential for providing health, food, water, education, transportation and national security, and for building public infrastructure. Public procurement systems are an integral part of any functioning society and therefore must operate as efficiently as possible.
Although often not in the spotlight, effective procurement systems are the primary means by which some of humanity’s greatest accomplishments have come to fruition; some would go so far as to say that because of them we put a man on the moon. Although most countries don’t intend to go to the moon anytime soon, it is becoming increasingly evident that transforming the way public goods are provided can yield tremendous development outcomes.
Procurement plays a vital role in development and humanitarian work. When constructing a bridge, it is about securing the land, sourcing materials and hiring engineers; when starting a schooling program, it is about hiring the teachers, procuring desks and chairs and renting classrooms. Procurement is the activity where ideas often meet reality for the first time, and how procurement is conducted often has a lasting legacy on the costs, quality and impact of a development intervention. Good procurement practices are a prerequisite for the success of countless programs, so finding new, better and more effective ways to buy goods and services, minimize costs, assure value for money, lessen the impact on the environment and advance social goals is the basis for innovative procurement.
Over the course of the past few decades, there have been numerous approaches by policymakers around the world to use public procurement systems to stimulate innovation in the economy. These approaches have ranged from introducing legislation to promote innovation, as was done in Brazil, to the establishment of a capability training program and communication platform for industry in Australia. Understanding which procurement for innovation options best align with the development goals of each country can ensure that positive outcomes are achieved.
Innovative procurement also has the ability to enhance sustainable procurement. As sustainable development must be nationally owned and locally implemented for optimal results, these options provide new paths for development, especially for lower- and middle-income countries. If properly applied to the local context, these innovations in procurement can be used to combat fraud and corruption, promote research and development or even increase industrial capacity.
This week, the Sustainable Procurement Practice Group of the United Nations Office for Project Services has published a compelling flagship report showcasing recent examples and studies on innovation and procurement in the context of sustainable development. The report presents articles on a variety of topics, including best practices for procurement in the field, academic trends in public procurement for innovation and case studies from developing economies.
Ban Ki-moon, the secretary-general of the United Nations, opens the report by outlining the importance of procurement to drive innovation, stating that “Innovative procurement offers tremendous opportunities to use government buying power to shape the world around us for a better tomorrow.”
Raj Kumar, president and editor-in-chief of Devex, continues by providing his personal insight on the topic, mentioning that “It’s time for the billions of dollars that flow through procurement systems to be used to help bring innovative approaches to ending global poverty to scale.”
In terms of mapping the knowledge landscape of public procurement for innovation, our flagship report includes articles that demonstrate how policies that encourage innovative procurement have changed over time and geography. With examples from over a dozen countries, including developing economies and economies in transition, the articles demonstrate that any country can adopt new and better means of achieving public service delivery. It’s simply a question of determining which plan to follow and implementing it correctly.
Finally, the report includes exciting case studies on how public procurement innovations have been implemented in a number of countries. Successful examples from South Africa, Wales, China, Brazil and Nepal provide a global picture for all development professionals on the importance of innovation and procurement. If you are interested in getting to know more about the current state of procurement and innovation, please visit our website to view the entire report.
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About the author
Therese Ballard
Therese Ballard is the director of the Sustainable Procurement Practice Group at UNOPS headquarters in Copenhagen, Denmark. She has extensive experience as a senior manager, adviser and change strategist, with over 35 years of experience including time at the World Bank, International Monetary Fund and in the private sector in the procurement, purchasing and supply chain fields.
