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

Abstract

This study examined the role of public procurement framework instimulating SMEs innovativeness. By using a sample of 208 firms andinterviews three identified variables, namely, competition, cooperationand specifications of designs were observed to have a positive effecton SMEs ' innovativeness. In other words an increase in these variablesin processes of tendering results into an increase in innovation amongthe SMEs. Despite the observed positive impact of the examined threeindicators, respondents highlighted different challenges theyencountered in the process of tendering in public institutions. Theyincluded difficult conditions like requirement of very high turnover,delay in payments of already delivered services and limitedtransparency. From findings, it is recommended that governance issuesare very important in the process of assuring that public procurementframework will stimulate SMEs ' innovativeness. Specifically, each partshould honour the contract agreements. SMEs should be involved inthe process of designing work specifications and also public institutionsshould reduce the unnecessary long procuring process as well as delayin payments.Keywords: SMEs, Public procurement, Innovation.