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.