Future Citie - Catapult City as Customer

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About

Is procurement accessible to small businesses, and does it actively seek out innovation?

 
Tier 1 - Top performers
 
Tier 2
 
Tier 3
 
Tier 4
Why it's important

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.

What we looked for in cities
Open and accessible procurement
Procurement as a lever for innovation
1

Ensure the visibility of procurement opportunities through a single portal

A single portal makes it easier to access opportunities and for the city to increase its reach.
2

Ensure that pre-qualifying requirements are achievable by new businesses

Pre-qualifying requirements such as stipulating annual turnover can restrict new entrants from accessing opportunities.
3

Define targets for spend on new businesses

Public targets signal intent to the entrepreneur community and prioritisation of SME spending helps ensure objectives are met.
4

Use problem-based procurement methods

Challenge Prizes enable city governments to define complex problems and leverage entrepreneurs to develop and test new solutions.
5

Use open innovation methods to engage the ecosystem

Often used in tandem with open data initiatives, city hackathons encourage the creation of new products and services from public datasets.
Open and accessible procurement
1
Ensure the visibility of procurement opportunities through a single portal
A single portal makes it easier to access opportunities and for the city to increase its reach.
2
Ensure that pre-qualifying requirements are achievable by new businesses
Pre-qualifying requirements such as stipulating annual turnover can restrict new entrants from accessing opportunities.
3
Define targets for spend on new businesses
Public targets signal intent to the entrepreneur community and prioritisation of SME spending helps ensure objectives are met.
Procurement as a lever for innovation
4
Use problem-based procurement methods
Challenge Prizes enable city governments to define complex problems and leverage entrepreneurs to develop and test new solutions.
5
Use open innovation methods to engage the ecosystem
Often used in tandem with open data initiatives, city hackathons encourage the creation of new products and services from public datasets.
INSIGHTS FROM LEADING CITIES
Future Citie - Catapult

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.

Future Citie - Catapult

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.

Future Citie - Catapult

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.