Dynamic capabilities for SME participation in public procurement

Purpose: Although small- and medium-sized enterprises (SMEs) play major roles in most economies in terms of job creation, innovation and contribution to national income, they are often underrepresented in public procurement markets. This paper aims to explore how the dynamic capabilities theory can improve SME participation in public procurement. Design/methodology/approach: Through a systematic literature review, the paper identifies common barriers to the effective participation of SMEs in public procurement and explores the applicability of the dynamic capabilities theory in addressing these barriers. Findings: A theoretical analysis was conducted to identify possible relationships between the factors reported in the literature as barriers to SME participation in public procurement and different components of the dynamic capabilities of firms (i.e. sensing, seizing, reconfiguring and learning). Seven key propositions were generated to guide future research. Research limitations/implications: Despite its contributions, this paper is based solely on a systematic literature review and theoretical analysis. Future studies could use meta-analysis to review multiple studies relating to the nexus between SMEs and public procurement, hence improving methodological rigour. Practical implications: The paper contributes to the ongoing debate about whether and how SMEs can leverage their resources and capabilities to develop self-help strategies to improve participation in public procurement, an area yet underexplored in the literature. Originality/value: This is one of the few studies examining the implications of firm-level capabilities of SME activity in public procurement markets. The findings may be beneficial to SME managers/owners, particularly regarding firms' ability to leverage resources and capabilities to participate effectively in public procurement.