The Future of Public Procurement: Innovation and Blockchain Technology

Glavanits, Judit (2019) The Future of Public Procurement: Innovation and Blockchain Technology. In: Law 4.0 - Challenges of the Digital Age. Széchenyi István University - Deák Ferenc Faculty of Law and Political Sciences - Department for Public and Private International Law, Győr, pp. 38-48. ISBN 978-615-5837-45-6 (print); 978-615-5837-46-3 (pdf)

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Abstract

According to the latest statistics of the OECD, the sheer size of public procurement, approximately representing 12% of GDP in OEDCD countries, makes it a key economic activity - it ranges from 5.1% in Mexico to 20.2% in the Netherlands.2 Spending such an amount on construction, buying goods and services for education, defense and social protection and on economic affairs in general, effectiveness is crucial from the aspect of the public interest. The design and principles of governmental spending can play a role model for the business sector: if we put the focus on innovation and transparency it can make the whole supply chain more trustworthy. In the last decade governments and regional, global regulators made significant efforts towards the general application of e-procurement to make the process much cost-effective and easier for small and medium sized enterprises to join. However, it is worldwide known that the mismanagement and the corruption are still basic risks of the public procurement system, and for this reason the innovation in supply methods, such as the blockchain technology can be a solution for a better public spending in the future.

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