The future of public procurement in the era of digitalization
Photo: World Bank
Why digitize public procurement?
Many countries have an opportunity to digitally transform public procurement systems to achieve enhanced efficiency, accountability, transparency, and participation of small and medium enterprises (SMEs). Digitally transforming public procurement would also accelerate national development objectives, such as enhancing public service delivery, developing human capital and the private sector, and gender empowerment.
For example, the digitalization of public procurement may yield benefits and savings due to streamlining administrative processes and increasing competition, up to 20 percent in cost and 80 percent in time. Digitalization may reduce barriers for participation of SMEs (including those owned by women and disadvantaged groups) in public contracting, supporting their development and job growth. Use of Mexico’s e-procurement system helped increase SMEs’ winning of public contracts by 19.2 percent relative to the annual goal in 2017.
However, we see a digital gap between countries around the world, particularly in public procurement. While some countries lack even a portal to post information about government contracts, other countries, such as those in the OECD, are employing artificial intelligence and blockchain. For countries that use these new technologies, their public procurement processes become more efficient and they have more business opportunities. This growing gap stresses the fact that other countries have a lot of catching up to do.
So how do countries address the technological and digital gap?
The World Bank Group organized a conference co-hosted by the Government of Tunisia called the “Future of Public Procurement in the Era of Digitalization” on June 18-20, 2018 in Tunis, Tunisia.
Serving as a knowledge exchange between countries with advanced procurement systems (Scotland, Chile, Brazil, Mexico, the United States, and Portugal/European Commission) with participants from Middle East and North Africa, and Sub-Saharan African countries, the conference highlighted key lessons for countries around the world on addressing the digital gap in their procurement systems: