Social Procurement: Working towards Sustainable Regional Development in Queensland

Written by Dr. Narayan Gopalkrishnan, James Cook University

Regional Queensland is unique in terms of the strengths that it can draw on as well as the issues it faces. Our regions are extremely rich in natural resources on land and in the sea but are also particularly impacted on by changes in the climate and biodiversity loss. Much of Queensland’s economic wealth emerges from the regions in the form of agriculture and mining as well as tourism to a more limited extent. We have relatively small populations that are spread out over a vast land mass, leading to the need for self-reliance and innovation at the local level. This also means increased difficulty in accessing basic services such as health and education. Gaps in energy infrastructure and digital connectivity are also among the many challenges faced in the regions when they work towards a more sustainable form of development that supports most regional Queenslanders.

One of the important ways towards meeting these challenges while building on the strengths of regional Queensland is to develop more social enterprises in the regions. Briefly, social enterprises are organizations that:

Are led by an economic, social, cultural, or environmental mission consistent with a public or community benefit;

1. Trade to fulfil their mission;
2. Derive a substantial portion of their income from trade; and
3. Reinvest the majority of their profit/surplus in fulfilment of their mission.

Unlike commercial organizations that look towards maximizing profits, social enterprises work towards addressing a social, cultural, environmental or economic issue while maintaining a business model that enables them to sustain their mission in the long term. This form of enterprise is of extreme importance to the vulnerable sections of society, especially in the regions. The worth of social enterprises is widely documented in research studies that show, for example, that 12% of all jobs in social enterprises are held by previously long-term unemployed people, a significant issue in most countries across the world. Research in 2017 by Castellas and Barraket found that social enterprises employed people with disabilities and female managers at twice the rate of mainstream small businesses. While the primary stated focus might be in working with one kind of social issue, such as lack of health, they often help with a number of other issues such as youth crime, delinquency or lack of education, to name a few.

There are a wide range of social enterprises already working in the regions, ranging from those that provide services such as lawn mowing and house cleaning, to those processing bush food to supply to gourmet restaurants, and many others such as real estates, medical clinics, IT service provision, and construction services. All of these are a vital contribution to the local community and to society in general, as they address a gap that needed to be filled. However, most of the social enterprises in the regions are in the area of small business and there is much that needs to be done to enable them to function more effectively. Social Procurement can play an important role in terms of supporting the work of these enterprises. Social procurement refers to the use of the purchasing power of an organization towards the achievement of social benefit.

These could be government, private sector or not-for-profit organizations leveraging their buying power to generate an outcome beyond the immediate goods or service purchased. By effectively using social procurement, larger organisations can help to nurture social enterprises that are making a difference in the local communities. The State Government in Queensland is a strong supporter of the use of social procurement in government buying and their position can be viewed at https://www.forgov.qld.gov.au/finance-and-procurement/procurement/procurement-resources/consider-social-procurement. Local councils are also beginning to adopt social procurement policies such as the one recently adopted by Logan City Council.

In the regions however, we need to go beyond just the adoption of social procurement policies and practices. As mentioned earlier, most of the social enterprises here are not at the scale that they can benefit directly from procurement policies. While they are providing vital goods, services, and jobs, they are not necessarily able to go through accreditation processes and large contractual obligations because of their size and maturity. While this can be viewed as a problem, it is also an opportunity for local councils to be able to make a difference. It is also an effective way to break down some of the silos that inevitably appear in organizations, silos that cause barriers to information flow and integrated functioning. Engagement with social enterprises is both a community development activity and a procurement activity.

It provides a space for diverse areas of local government such as the community development team, the small business team and the procurement team to work together in an integrated way to identify social enterprises and nurture their work till they can be independent enough to avail of existing social procurement policies. This would be an effective way to build more jobs in the regions while also supporting environmental, cultural and social goals.

As we move closer to the 2032 Olympic Games in Queensland, many aspects of sustainable development are gaining momentum, such as clean jobs, a circular economy, and inclusive development. Supporting social enterprises is one very important area in which local councils can work towards addressing their larger obligations. An integrated approach of adopting social procurement policy and practices, supported by active engagement with social enterprises would work a long way towards achieving local government objectives in the area.