- 15 Dec 2015
- new york,
- CITY AS CUSTOMER
In the first of our series on City Leaders turning insight to action, we present three key takeaways on “City...
Is procurement accessible to small businesses, and does it actively seek out innovation?
Every business needs customers. And city governments are big customers, spending $4.5 trillion globally.
However, historically it has been difficult for young firms to win business from public bodies like cities. Legacy processes, a preference for large integrated contracts and an aversion to working with unproven ideas or suppliers have all created barriers to new players accessing this market.
High-performing cities increasingly recognise the value of acting as customers of innovation. Opening up procurement mechanisms to make them accessible to younger, smaller businesses allows cities to access a wider range of new ideas and technology than traditional market procurement has allowed for.
It also opens up commercial opportunities for local entrepreneurs and provides them with a living urban lab in which to test and validate their products and services.
Ensure the visibility of procurement opportunities through a single portal
Ensure that pre-qualifying requirements are achievable by new businesses
Define targets for spend on new businesses
Use problem-based procurement methods
Use open innovation methods to engage the ecosystem
When tendering for public sector contracts, companies in São Paulo only need to display their tax compliance at the time of bidding to pre-qualify for the contract. Furthermore, SMEs are given preferential treatment as long as their bid price no more than 10% higher than non-SME bidders.
CHIdeas was launched by the mayor to engage Chicago’s residents and businesses in improving city hall services and to create neighbourhood programmes. The Chicago CleanWeb Challenge, a year-long hackathon, challenged developers to use city data and create technological solutions for environmental issues.
Helsinki, using the Hack at Home concept, uses a collaboration platform that brings developers and mentors together over a four-month period with the task of using open data from the city to create apps to solve city challenges.