Fostering Small and Medium-sized Enterprises through Public Procurement in Canada: A Data Analytics Approach

Abstract

Abstract Public procurement has been considered as a policy tool to foster small and medium-sized enterprises (SMEs), while the effectiveness remains unclear. This study aims to assess the participation and performance of SMEs in Canadian public procurements. We adopt a data analytics approach in assessing the tenders’ data from the Government of Canada over a ten-year period (2009–2019). We analyzed key factors, identified patterns and profiles in winning contracts, compared the performance between SMEs and large enterprises (LEs), and developed prediction models for contract value. Contract value is found to vary across firm sizes, levels of competitiveness, and supplier’s locations and industries. SMEs are top performers and are strongly complementing LEs with diverse and specialized offerings. A majority of public contracts with SMEs are awarded with relatively small value, short terms and limited to certain service contracts. The random forest regression model is shown to be the best in predicting contract value. The findings provide insights for both governments and SMEs in using procurement more effectively as a policy tool. Future work may validate this research in other countries with traditional method and primary data.