OECD: Public Procurement "Strategic Tool" to Strengthen Industry, Economic Resilience

Public procurement on goods and services has evolved beyond its traditional purchasing function into a strategic policy instrument that countries are increasingly using to bolster domestic industries, encourage innovation and strengthen economic resilience, according to a new report by the Organisation for Economic Co-operation and Development (OECD).

The report highlights public procurement as a key driver of industrial policy, noting that governments are leveraging their purchasing power to support local businesses, foster technological development and reinforce the security of critical supply chains.

Rather than serving solely as a mechanism for acquiring products and services, public procurement has become an important economic policy tool capable of stimulating private-sector activity, creating jobs and reducing reliance on imported goods. The OECD said these measures can help strengthen national economies while delivering broader benefits for businesses and citizens.

According to the report, many governments have adopted procurement strategies that prioritize domestic suppliers, promote innovative products and technologies, or enhance the resilience of essential supply networks. However, the organization cautioned that such policies should not create unjustified barriers to international trade or undermine fair market competition.

The OECD noted that recent global disruptions, including the COVID-19 pandemic and rising geopolitical tensions, have prompted policymakers to reassess industrial and trade strategies in an effort to safeguard supply chains and improve economic preparedness. At the same time, it warned that excessive trade restrictions could increase costs, weaken competitiveness and weigh on long-term economic growth.

The organization concluded that striking the right balance between advancing national industrial priorities and preserving open, competitive markets will be critical to building more efficient, resilient and sustainable public procurement systems in the years ahead.