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.

Governments are increasingly taking steps both to give SMEs better access to public markets and to remove barriers preventing SMEs from winning public contracts. Engaging SMEs in public procurement is beneficial both for the companies and for the public sector. On the one hand, public procurement contracts give SMEs better access to markets and help them strengthen their own capacities. On the other, the public sector can better meet its procurement needs by working with innovative, responsive and flexible SMEs. However, specific characteristics of public procurement – such as the complexity of procedures, administrative burden and high technical and financial capacity requirements – disproportionately affect SMEs and hamper their access to the market. This report highlights the main elements of a public procurement system that facilitates SME participation and supports SME development more broadly.