The Role of Public Procurement Framework in Stimulating SMEs Innovativeness in Tanzania

Abstract

This study examined the role of public procurement framework in
stimulating SMEs innovativeness. By using a sample of 208 firms and
interviews three identified variables, namely, competition, cooperation
and specifications of designs were observed to have a positive effect
on SMEs’ innovativeness. In other words an increase in these variables
in processes of tendering results into an increase in innovation among
the SMEs. Despite the observed positive impact of the examined three
indicators, respondents highlighted different challenges they
encountered in the process of tendering in public institutions. They
included difficult conditions like requirement of very high turnover,
delay in payments of already delivered services and limited
transparency. From findings, it is recommended that governance issues
are very important in the process of assuring that public procurement
framework will stimulate SMEs’ innovativeness. Specifically, each part
should honour the contract agreements. SMEs should be involved in
the process of designing work specifications and also public institutions
should reduce the unnecessary long procuring process as well as delay
in payments.
Keywords: SMEs, Public procurement, Innovation.