Public procurement as a means to increase women's entrepreneurship
Legal considerations and socio-economic perspectives
The purpose of this report is to highlight the potential of public procurement to promote a more inclusive and gender-equal business sector by strengthening women's entrepreneurship in Sweden. Public procurement is a significant tool for the public sector, not only for acquiring goods, services, and works, but also as a potential policy instrument to achieve societal objectives. This report explores the possibility of using procurement more strategically to foster greater gender equality and thereby contribute to a more gender-balanced business structure.
The report was commissioned by the Swedish Agency for Growth Policy Analysis (Tillväxtanalys), which also formulated the overarching research question. The background to the assignment is an ongoing and growing discussion, both in Sweden and the EU, on how public procurement can be used to address various societal challenges – not least in areas such as the environment, social inclusion, innovation, and gender equality. As more contracting authorities aim to achieve secondary goals beyond cost-efficiency, there is a growing need for knowledge regarding the legal and socioeconomic opportunities and constraints involved.
Public procurement to improve conditions for women’s entrepreneurship
The central question examined in the report is: Under what conditions is this legally permissible and socioeconomically effective? Additional questions are addressed concerning how different procurement regimes – for example, the Public Procurement Act (LOU) and the Act on System of Choice (LOV) – affect the possibilities of improving conditions for companies owned and operated by women. The analysis does not focus on the goal of a more gender-equal business sector in itself, but rather on if and how such a goal can be operationalised within the framework of public procurement.
The main conclusion of the report is that, given its scale and strategic scope, public procurement could theoretically and under certain conditions, be used to improve conditions for women’s entrepreneurship. However, in practice, this is associated with significant limitations. The Swedish and European regulatory frameworks for procurement are primarily designed to ensure open competition, transparency, and equal treatment. This makes it difficult to legally target measures directly at supplier ownership structures or gender composition. Nevertheless, there is some scope within the three phases of the procurement process – preparation, implementation, and follow-up – to formulate requirements and criteria that may indirectly contribute to a more gender-equal business sector, for instance by influencing how services are produced or delivered.
Public procurement as a part of a mix of policy instruments
From a socio-economic perspective, the report indicates that public procurement can play a role as part of a broader mix of policy instruments, but that other measures – such as taxes, subsidies, or charges – are likely to be more precise and cost-effective in promoting women’s entrepreneurship. In such cases, public procurement should be regarded as a complementary rather than a primary strategy. The report also identifies that procurement under a system of choice (LOV), which is often used in the health and social care sectors, appears to offer more favourable conditions for smaller enterprises – where women are overrepresented – to participate in public contracts.
Methodologically, the report is based on an analysis grounded in economic theory and, to an even greater extent, in current legislation and legal practice. A significant portion of Swedish public procurement law is based on EU law, primarily through the procurement directives that have been implemented into Swedish legislation.
The focus on the report
The focus is on analysing the socio-economic and legal conditions that determine the feasibility of using public procurement to achieve gender equality goals. The empirical material consists of prior research, legal analyses, policy documents, and examples from ongoing initiatives, such as the EU project GenProcure. The legal analysis covers both Swedish and European law, with particular focus on the principles of proportionality and equal treatment, as well as the opportunities afforded by EU procurement directives to impose social and labour law requirements.
It is important to note that the report is limited in several respects. Firstly, the analysis assumes that a decision has already been made to outsource services in the area where procurement is to be applied; it does not take a position on whether public procurement is generally preferable to in-house provision. Secondly, the question of whether promoting women’s entrepreneurship is socioeconomically efficient per se is not analysed; instead, the report focuses on exploring the potential of using an existing policy tool – public procurement – for a gender equality-related purpose. Furthermore, it does not examine in detail how public procurement interacts with other policy instruments, though it is noted that such interplay is important for achieving optimal governance.
By combining perspectives from law and economics in combination with practical perspectives, this report offers a comprehensive analysis of the conditions under which public procurement can contribute to a more gender-equal business sector. It is hoped that the report will serve as guidance for decision-makers, public authorities, and contracting organisations in their strategic considerations on how procurement can be used to advance societal objectives without compromising legal certainty or competitive neutrality.
