How to Open $500bn of City Spending to Small Business

Sascha Haselmayer
Nov 2, 2019 · 3 min read

City leaders everywhere: Innovation in procurement matters! Leave the narrow specifications for past solutions behind. Already today, a new generation of procurements is open to new ideas that deliver better outcomes and savings. Small businesses, start-ups, and disadvantaged businesses all shine when you give them a chance to compete for better ways of doing things.

In 2019, U.S. cities are on track to publish 750 such innovative procurements according to our survey on the state of procurement, small business and innovation. A deeper dive into the data shows that Long Beach (CA), Pittsburgh, L.A. and Austin already lead by example, with a concerted effort to create opportunities for new ideas, small business and start-ups.

It is not too late to make a notable improvement in 2019. See where your city ranks on innovation and small business accessibility. (Tell us if you would like us to cover your city).

For 2019, we suggest you focus on two questions:

1. How many procurements should we aim to open up to new ideas and start-ups?

Innovative procurements don’t have to be rocket science, they should offer flexibility on how you best meet the city’s need. They can happen in any category — take a look at these three examples.

2. How much can we improve our Small Business Accessibility Score (SABS)?

The good news is, that there are going to be a lot of simple ways for you to improve your SABS, and chances are that you can make a difference. Check the metrics that SABS uses to identify the low-hanging fruits to get tangible improvements, fast.

In ten years, we hope to see a lot more cities performing like Pittsburgh and Long Beach. In that future cities like yours could open up 2.5% of GDP to small businesses and innovators — that is $500 billion a year in the US alone!

For 2029, we recommend four steps to plan your strategy & goals

  1. Break down the barriers for new ideas and small business to win contracts in your city today to develop your roadmap for a zero-friction experience that should become the norm in 2029. Take into account the voice of small businesses, including those that don’t even know they could work with you.
  2. To open 2.5% of GDP to procurement, about 25% of your procurement spend should be innovative = open to new ideas and small business. If you start today, you can achieve or exceed this goal by 2029.
  3. Develop your City Procurement Strategy — a 5 year strategy can begin to set your interim goals toward your 10 year ambition and help you build a strong business case to harvest the commercial and civic value of procurement. See what others have done.
  4. If you don’t measure it, you can’t manage it! Steps 1–3 should give you clarity on what metrics you should be eyeing to achieve your goals. Metrics help you steer the conversation toward achieving the desired outcomes, celebrate progress and focus on what works.

Setting goals for procurement makes sense. Your city stands to get millions in extra value and will create a more rewarding experience for city staff, residents and businesses. At Citymart we have supported over 120 leading cities to do just that. Get in touch if you want to start a conversation.


Innovation in Cities, Public Procurement, Government and…

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