Typology of regional public procurement markets for SMEs: an approach based on combined clustering

Objective: to cluster Russian regions based on two independent typologies (by the nature of SME participation in public procurement and by the macroeconomic profile) in order to identify regional heterogeneity and substantiate the need for a differentiated SME support policy.

Methods: to typologize regions by indicators of SME participation in procurement, we used the rule-based clustering and an upgraded version of agglomerative clustering, similar to CHAMELEON. The clustering according to macroeconomic conditions applied a k-means algorithm with subsequent expert correction. The analysis used data from the Unified Information System of Public Procurement and the Federal State Statistics Service for 2023 for Russian 85 subjects.

Results: the analysis identified five stable regional clusters of SME procurement activity and five clusters by macroeconomic profile. The economic structure of the region sets the fundamental framework, but does not predetermine the model of procurement activity. Regions with a similar economic profile exhibit opposite procurement patterns, which proves the significant independent role of the regional institutional environment and management policy.

Scientific novelty: for the first time in the Russian context, cluster analysis focused not on general SME indicators or the socio-economic condition of the region, but on specific indicators of SME participation in public procurement. The proposed methodology for separate analysis of SMEs’ procurement activity and the macroeconomic context allows distinguishing the influence of the economic structure from the influence of regional policy/ It also helps to identify regions where the potential for attracting SMEs to public procurement is implemented highly efficiently, rationally, or with low efficiency.

Practical significance: the obtained typology serves as the basis for a differentiated public procurement policy adapted to the specific features of each cluster of procurement activity and the business environment. The study results can be used in designing targeted measures to support SMEs and evaluating the effectiveness of existing incentives.

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