21 December 2017

Governments should use public procurement policy as a strategic lever to accelerate gender-inclusive economic growth through the application of state spending power.

Authors

Susan Harris Rimmer

Susan Harris Rimmer

Associate Fellow, Global Economy and Finance

Entrepreneurs at Women in Kind in Denver USA

Entrepreneurs Virginia Santy (left) and Melanie Ulle at Women in Kind, a co-working space aimed at small businesses run by women in Denver, US. Photo by AAron Ontiveroz/The Denver Post via Getty Images
Entrepreneurs Virginia Santy and Melanie Ulle at Women in Kind, a co-working space aimed at small businesses run by women in Denver, US. Photo: Getty Images.

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  • Governments need to rethink public procurement policy. They need to use it as a strategic lever to accelerate gender-inclusive economic growth through the application of state spending power, while maintaining rigorous governance standards. Reform of public procurement to make it more gender-inclusive could create a ‘diversity dividend’ through increased job creation and economic growth. Gender-smart procurement policies could also mitigate economic and business risk by rendering supply chains more diverse.
  • In 2014, G20 members agreed to reduce the gender gap in the labour market by 25 per cent by 2025. Procurement policy is one of the most powerful tools governments have to achieve this goal. All G20 members, regardless of the differences in their legal frameworks, can implement measures that will increase the ability of women to benefit from procurement policy.
  • Public procurement accounts for around one-fifth of global gross domestic product (GDP). It is estimated that women entrepreneurs supply only 1 per cent of this market. Women’s businesses face considerable barriers to accessing procurement tenders and winning procurement contracts. The inadequate design of many procurement processes prevents more inclusive gender outcomes for citizens. Governments should redefine procurement policies to make explicit the requirement that increasing women’s workforce participation, through greater use of female suppliers, is a key objective when selecting bids for procurement contracts.
  • Through the use of policy and spending levers, governments can play four primary roles in encouraging procurement from enterprises owned by women, or from businesses committed to promoting female labour participation. These roles are:
    - To direct reforms of government procurement – reviewing procurement policies and practices to ensure sustainable and inclusive procurement;
    - To reduce barriers to women’s participation in the economy – creating the support mechanisms to ensure an environment in which businesses owned by women can flourish;
    - To help scale up gender-smart procurement in the private sector – expanding government’s role in encouraging private companies to spend more of their procurement budgets with women’s businesses; and
    - To encourage increased transparency on the issues – creating and sharing procurement databases and lessons learned, especially at the regional level.
  • Companies can also benefit from having more diverse supply chains and volunteering for accreditation schemes. They can start conversations with government about national regulation that encourages diversity in procurement, leading by example.
  • The G20 should set measurable and time-bound targets in the area of gender-smart procurement, to build on the momentum of UN reforms and incorporate good practice in supply chain management.

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