Last week's National Economic Development Conference (NEDC20) brought together some of the world’s most experienced and innovative economic development pros to share knowledge, learnings and achievements and show how their frameworks can apply to the Australian context.
Unsurprisingly, given that 60-80% of new jobs and investment are generated by local businesses, a focus of many discussions was on how to create stronger local ecosystems. Roderick Miller, CEO of Invest Puerto Rico, drew on his experience as CEO of the Detroit Economic Growth Corporation and the New Orleans Business Alliance to provide practical advice for recovering from an economic crisis. He framed Australia’s current recession as an opportunity for cities to build more resilient ecosystems that benefit from inclusivity and diversity, foster competition & innovation, and ultimately attract investment and enable growth.
Key to economic recovery and resilience is, of course, local procurement. Rod provided a couple of case studies as models. One he was personally involved in, was to facilitate procurement activity between 23 of Detroit’s largest organisations and the city's SMEs. Business opportunities would often need to be repackaged to suit SME bidders, but the approach worked. In three years the collective spend of the 23 companies with local businesses rose by 66%.
In Australia, large organisations in the public and private sectors are leveraging procurement technology to increase their spend with local businesses. VendorPanel CEO, James Leathem, in his NEDC20 Ignite talk said, “The big opportunity [for local economic development] lies in low value operational procurement, where the majority of activity occurs. These low value jobs are the ones that SMEs want and historically they’ve been hidden in email. When we’re able to unlock and target this spend, we can drive significant value to local economies.”
James provided an audited case study of 26 local governments using VendorPanel Marketplace that found work was awarded to local vendors in, on average, 84% of cases. It showed that increased visibility of the local market directly impacted local spend. Referring to a post-covid rollout of the technology to Councils in WA, James said, “Since May the local government sector in WA has raised more than $20 million [in RFPs on VendorPanel] to the local market, and growth in numbers on both buyer and supplier sides of the Marketplace continues steadily week on week”, adding, “by geolocating suppliers, buyers see who is close to them, and - through open API - we can also identify indigenous, social and disability businesses to help buyers diversify their supply chain.”
Economic inclusivity, Rod Miller emphasised, must be a key component in an economic recovery plan. He pointed to a recent Deloitte study that found that $12.5 billion in additional economic output would occur annually in Australia if the economy was more inclusive. It’s an astonishing finding, and again - just as technology has proven to help increase local spend - it can also help to unlock this value by highlighting supplier’s statuses so buyers can make better informed decisions in line with economic inclusion policies.
The pandemic has created an opportunity for us to rethink how we engage in the market, and last week, NEDC20 provided a valuable platform for experienced eco dev professionals to share their strategies and review lessons from regions that have suffered and recovered from severe economic recessions.
To find out more about how procurement technology can help to strengthen economies and create jobs, reach out to us here.
Watch VendorPanel CEO, James Leathem's, NEDC20 Ignite talk here.
