In reading an article about Canada’s new procurement policy promoting more opportunities for female entrepreneurs, I came across the term “social procurement”. For those unfamiliar, “Social procurement involves using procurement processes and purchasing power to generate positive social outcomes in addition to the delivery of efficient goods, services and works.” It is a federal policy currently used to diversify the government and ultimately business supply chains in the countries of Canada and Australia. While it may sound similar to the idea of Supplier Diversity, there are key differences.
Instead of an organization employing a purchasing goal of 20% of total spend going towards diverse suppliers, social procurement looks at the entire 100% and asks, “how are we ensuring EVERY dollar we spend is reflecting our organization’s policy goals.”
For starters, a social procurement policy in Texas would be different then a social procurement program in New York or California. Yes, small and diverse businesses would encompass the core of these initiatives, but it would also cover processes like employing local workers, purchasing fair trade products from domestic or foreign countries, and ethical supply chain support. Social procurement connects a governments social, economic, and business goals to expand opportunities to targeted areas and groups.
The idea of social procurement is so new, it doesn’t even have its own wiki (yet), but it essentially looks at a government’s policies and connects it with the community. The practice of social procurement is in existence in America today, but it currently isn’t as connect as in places like Canada and Australia.
It’s a new way to look at procurement (similar to social entrepreneurship), but I believe it’s an exciting new idea that more corporations should consider. It has the potential to revolutionize how businesses purchase products and services and may be the future.