Governments around the world have become increasingly interested in fostering the social economy in order to address pressing social problems. One of the ways to do that is through their procurement of goods and services. The public sector represents a significant market. Approximately 250,000 public authorities spend more than 14 percent of the European Union’s €15 trillion annual GDP on procurement. If governments can use social impact as an important criterion in purchasing decisions it can help grow the social economy.

The Department of Vendee, France, for example, has been employing socially responsible public procurement (SRPP) to provide high quality organic food to students in local schools. During the needs analysis the department identified a potential social enterprise, ADAPEI-ARIA 85, that employed 10 people with disabilities and provided services such as the storage, cutting, cleaning, and packaging of organic food. They were awarded the contract in 2011 under French regulation, then in 2015, using the reserved contract instrument, the contract was renewed for six years. This SRPP deal, valued at €105,000 annually, has achieved two impact goals: to support the continued employment of 10 disabled people; and to promote the consumption of local organic food by providing 1.8 million meals per year to students in 34 schools.

The public sector is not alone in finding ways to use procurement to advance social goals. The private sector is also beginning to embrace this approach, presenting a huge market opportunity to social enterprises. The growing interest by businesses is no longer rooted solely in corporate social responsibility. It reflects a recognition that socially responsible procurement may actually increase a company’s competitiveness in the market, often because of growing consumer demand for such practices.

Read the full article about how public procurement can spur the social economy by Eva Varga at Stanford Social Innovation Review.