Blockchain Technology in Innovation Ecosystems for Sustainable
Purchases through the Perception of Public Managers
1VICTOR ANDRADE DA SILVEIRA, 1STELLA REGINA REIS DA COSTA, 2DAVID RESENDE
1Technology and Business Management Laboratory of the School of Engineering
Universidade Federal Fluminense
BRASIL
2Águeda School of Technology and Management (ESTGA-UA)/GOVCOPP Research Unit /PICTIS
University of Aveiro
PORTUGAL
Abstract: The success of organizational processes is increasingly related to sustainable innovation. The concern
with sustainable public purchases has been gaining strength over the years. However, several barriers are found
to implementing this practice. At the same time, blockchain advances as technology part of the innovation of
industry 4.0 and as a proposal to solve these difficulties. The study aimed to identify the perception of public
procurement managers on the use of information systems with characteristic features of this technology, to
reduce these barriers and elaborate a proposal for the use of blockchain in open innovation systems. The
research developed is qualitative, quantitative and applied, being carried out through the application of a
structured questionnaire to purchasing managers using the 92 prefectures of the State of Rio de Janeiro, located
in Brazil, with subsequent analysis through descriptive statistics. The results of this work present relevant
findings for public procurement through innovation and blockchain technology with the possibility of tracking
the entire supply chain, allowing the verification of possible environmental and social damages such as the use
of child or slave labor, the use of deforestation wood, counterfeit products, unethical agents, in addition to
providing more transparency to the process of acquisition.
Key-Words: sustainable procurement; public sector; blockchain; smart contract; innovation 4.0
Received: June 25, 2021. Revised: February 11, 2022. Accepted: February 25, 2022. Published: March 14, 2022.
1 Introduction
The activities of public institutions are considered
essential to leverage and maintain the reduction of
the environmental impact on the economy,
participating directly in the balance of the market
and operating both as a consumer and as an
intermediary agent [1]. Governments' purchasing
power is increasingly used as a strategic tool to
achieve broader objectives such as promoting
innovation, sustainability, social inclusion, and
supporting small and medium-sized enterprises
[2].As the public sector is concerned with social
welfare, it may have a greater propensity to pursue
sustainable issues compared to the private sector [3].
After World War I, the use of government contracts
was already used as a mechanism to meet the
specific needs of people with physical disabilities in
the post-war period. In some countries, public works
financed by the government have been used as a
social policy against unemployment [4]. In South
Africa, after Apartheid, public procurement had
already been seen as an important lever for social-
political actions. Research shows that through
public acquisitions it is possible to achieve
consistent results in society and that public agencies
are encouraged to acquire sustainably [5], while
many citizens are concerned about the quality and
form of public spending[6].
Insofar as the world population is becoming more
aware of the powerful influence of production and
consumption on the environment, economy, and
society, sustainable development becomes
progressively more relevant [7]. The increase in this
awareness of environmental depletion has also
driven innovation towards sustainability in the
technological and consumer domains, resulting,
among others, in eco-innovations with positive
impacts at various levels in society [8].
The demands of the general population and
governments on sustainability in the supply chain
motivate investigations of how blockchain
technology can solve problems and help achieve
sustainable goals [9]. Nowadays, consumers
demand sustainability requirements and traditional
models of price competition are insufficient [8].
This technology is seen as one of the trends that will
influence business and society in the coming years
[10] and has the potential to provide benefits to the
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
government and society in addition to presenting the
next step in the development of electronic
government, allowing to reduce costs, share reliable
processes and improve auditing [11].
The OECD created the Global Blockchain Policy
Forum, the main international event that aims to
bring together ministers of state, academics, policy
makers, and other stakeholders to discuss the main
issues and applications of this technology [2]. The
State Administration of Taxation (AET) of Beijing
in China recently announced the implementation of
an application for issuing electronic invoices by the
blockchain. The basic benefits of blockchain allow
for data integrity and irrefutable transactions, which
can result in tracking and transparency that support
the reduction of corruption and fraud [10]. The
blockchain supports the transparency that has
become essential to rebuild trust [12] and can be
considered a sustainable measure against corruption.
2 Literature Background
It’s been sought first to understand what was
produced on the themes, through a systematic
review of the literature, following the steps and
recommendations suggested [13]: selection of
sources, access to databases, adoption of keywords,
use of eventual search filters, reading the title,
reading the summary, downloading the articles
resulting from the search, reading the articles,
archiving and searching for the next article as shown
in figure 1.Initially, there was a search for databases
of multidisciplinary interest. A result of 31 (thirty-
one) databases belonging to this area was obtained,
out of 272 (two hundred and seventy-two)
databases.
After identifying the bases, individual access to each
was carried out and proceeded to the next step.
Search for keywords: In the search for articles, the
following word relationships were used:
• ("blockchain" and "public sector").
• ("blockchain" and "government").
• ("sustainable procurement" and "blockchain").
• ("sustainable procurement" and "public
sector").
Fig.1: Stages of the search for the theoretical
framework
Source: Own work.
To choose the keywords, the initial stage of using
the blockchain in public purchases was taken into
account. Filters for selection were applied
individually to each database. For this, the types of
document articles and articles "in press" were
considered, the types of sources "journals" between
the years 1996 to 2019. Going through the steps
suggested in Figure 1, the next steps were followed:
Reading the title and abstract, downloading of
articles, dynamic reading of articles, archiving, and
searching for the next article based on repeating the
steps already mentioned. In order to further deepen
the key concepts, after identifying frequently cited
authors, the "snowball" method was adopted. This
method allows, through a sample, to identify other
authors of the same population [14].
2.1 Bibliometric Analysis
In the search process, articles were returned in 13
(thirteen) databases, with the largest number being
returned in the Scopus database, representing
33.94%, followed by the Web of Science and
Compendex databases, both with 18.72%. The three
databases together represented 71.38% of the
selected documents. The total distribution of results
is shown in Figure 2.
Start
Sources
selection
Database access
Keywords
Adoption
Use of search
filters
Title reading
Summary
reading
Article
Download
Article reading
Archiving
Search next
article
Calibration
Keywords
and Filters
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Walid Omar Owais,
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Fig.2: Number of database documents
Source: Own work.
Performing a keyword comparison, the association
("sustainable procurement" and "public sector")
returned 67% of the results. While ("blockchain"
and "government") got 26%, ("blockchain" and
"public sector") 8% and ("sustainable procurement"
and "blockchain") got no result. These data are
illustrated in numbers in figure 3.
Fig.3: Number of keyword results
Source: Own work.
Of these documents, the journal with the highest
number of articles found was IEEE Access, with 8
publications, followed by Computer law & security
review with 4 publications. It can also be seen that
there was no author with a large number of
publications on the topic during the consultation
period. But authors Jong Hyuk Park and Pradip
Kumar Sharma, both from South Korea, even
published 3 (three) articles in this interval
considering the search method described above.
Of the articles returned, 102 (27%) were related to
blockchain technology. Graph 5 represents the
distribution of selected articles over the years. It is
seen that the beginning of the publications found,
through the filters applied in the searches, took
place from the year 2015 and was accentuated in the
years 2017 and 2018, reaching a total of 54
published documents. It is also observed that this
peak in publications occurred 10 (ten) years after the
publication of [15], the initial milestone of the
technology. For the year 2019, publications up to
the date of access to the databases were considered,
however, due to the trend in the graph, the
possibility of a growing number of publications in
the year is seen.
Fig.4: Number of articles on blockchain per year of
publication
Source: Own work.
Reading the title and summaries of the documents
also made it possible to catalog them according to
the area of interest and activity. Figure 5 presents
the areas with the greatest relevance on the subject
and confirms the position that most academic work
has focused mainly on cryptocurrency in general
and for Bitcoin in particular [16]. However, it is
050 100 150 200
SCOPUS
COMPENDEX
WEB OF SCIENCE
REAXYS
EBSCO
CABI
ACM
RSC
SCIELO
BEWHERE
BVS
MEDLINE
zbMATH
185
102
102
56
40
29
15
5
5
2
2
1
1
Number of documents
Databases
0
50
100
150
200
250
300
350
400
450 403
155
47
0
0
5
10
15
20
25
30
35
40
2015 2016 2017 2018 2019
1
4
19
36
1
0
3
18 18
2
Blockchain Public Blockchain
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Walid Omar Owais,
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observed that research on this topic is
comprehensive and diversified.
Fig.5: Number of articles on blockchain by subject.
Source: Own work.
It was considered for the theoretical foundation of
this work, articles on smart contracts, supply chain,
technology advancement, social solutions, smart
city, digital identity, fraud prevention, benefits and
implications, public sector, voting, case study, and
double taxation were considered, totaling 42
articles, given the direct interest of the practical
application of blockchain technology in the public
sector. This stage concludes with the initial stage of
research on blockchain technology in the public
sector between 2017 and 2019. However, the scope
of the technology's areas of activity can be seen,
which allows us to believe in its potential and the
growth in the study of this tool. It is also possible to
observe the great focus of studies on the blockchain
is related to cryptocurrencies.
As for the topic of sustainable purchases, 182 (47%)
resulting articles are related to the public sector and
37 (10%) to application in other sectors. It is also
possible to observe, according to the list of the most
cited periodicals (figure 5), that regarding
sustainable purchases, this represents 57% of the
total of articles searched. Of these 219 (two hundred
and nineteen) articles, 20 articles were published by
the Journal of Cleaner Production. The second
journal with more publications was the Journal of
Construction Engineering and Management
representing 4%. Graph 7 shows the classification of
journals.
Fig.6: Number of articles found on sustainable
acquisitions per journal
Source: Own work.
Regarding the areas of knowledge of sustainable
acquisitions, public-private partnerships (PPP), case
studies, the search for sustainability in infrastructure
and civil construction works with a focus on waste
reduction and the use of sustainable materials, in the
reduction of energy consumption.
2.2 Sustainable Public Procurement
Public contracts refer to acquisitions made by
governmental organizations or the public sector,
being a policy with multiple objectives, mainly the
guarantee of the quality of services and responsible
010 20
Double Taxation
Case Study
IA
Financial Sector
Voting
Governance
Public Sector
Transport Sector
Use in Vehicles
Benefits and Implications
Bitcoin
Fraud Prevention
Digital Identity
Smart City
Energy Consumption
Regulation
Social Solutions
Technology…
Supply Chain
Medicine
Smart Contract
Internet Security
IoT
Criptocurrency
2
2
2
2
2
3
3
3
3
4
4
4
4
4
5
5
5
5
6
6
6
8
11
20
Número de Publicações
0 5 10 15 20
Journal of Cleaner Production
Journal of Construction
Engineering and…
Sustainability
British Food Journal
Energy Policy
Supply Chain Management
Engineering, Construction
and Architectural…
Institution of Civil Engineers
International Journal of
Operations & Production…
Journal of Purchasing and
Supply Management
Public Health Nutrition
20
8
5
4
4
4
3
3
3
3
3
Number of Publications
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Walid Omar Owais,
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consumption [3]. Economically, public procurement
is recognized as a means of efficiency and
effectiveness of public spending. Broader political
objectives, such as innovation, sustainability, social
inclusion, and support for small businesses, should
also be considered. This purchasing power amounts
to more than 1 trillion Euros, 12% of the Gross
Domestic Product, in the European Union
[2].Developing countries, on the other hand, spend
25 to 30% of GDP on public purchases[17].
The concept of sustainable procurement is
associated with the idea of sustainable development
cited by the 1987 UN report passing through Rio 92,
and the World Summit on Sustainable Development
in 2002 in Johannesburg. This interest in
sustainability was reflected with the emergence of
the 2008 Dow Jones Sustainability Indices and the
2001 indices series FTSEGood[3]. It can be
understood as the process through which public
authorities seek to acquire goods and services with
reduced environmental impact throughout the life
cycle [1], aiming to meet development objectives
through the purchase process, incorporating social,
environmental, and economic aspects [2]. It then
means achieving a good cost/benefit ratio based on
the product's life cycle, generating benefits not only
for the organization but also for the society, the
environment, and the economy [18].
As an example, governments have formulated
sustainable procurement goals, staff training, and
product listings on websites as an incentive [5]. Like
other countries, they have adopted national action
plans for sustainable public procurement [19]. Most
countries in the European Economic Area have
developed specific National Action Plans on this
purchasing model in the last decade. The
government procurement entity in Chile has
published recommendations for public institutions
to follow when making procurement decisions [20].
Thai government initiatives in establishing a
national roadmap on sustainable consumption and
production 2017–2036 [21], as well as studies
carried out in Russia [17], Sweden [22], Bangladesh
[23], China [24], and in five Asian countries and
Hong Kong [25]. Research on the subject is also
seen in the Indian territory [26] as well as in
Lithuania [27]. The UK, as well as local
governments in Italy, have issued guidelines for
sustainable procurement, developing detailed
standards that affect all public sector procurement
activities [6]. The Indonesian government has
established relevant regulations for economic and
environmental development through procurement
[28]. As for the social pillar of sustainability,
purchases can also be considered an umbrella of
issues [19] such as application of social policies, a
requirement of a minimum percentage of workers
with physical disabilities, preference for local
employees, ensuring compliance with labor
requirements, personnel hiring policies that aimsthe
reduction of racial and gender inequality and
religious discrimination [4]. Requirement of criteria
aimed at reducing gender inequality, security,
philanthropy and guaranteeing human rights
[26][29], ethics in the execution of the procurement
process [20][29], guaranteeing access to public
health [6 ], encouragement for the creation of
internship programs by suppliers and preference for
hiring social organizations (SO)[30], a guarantee of
housing and provision of shelter and social inclusion
[31][32], policies for logging as a measure of
protection for people who depend on forests [33]
and criteria for including immigrant companies as
public sector providers [34].
2.3 The Blockchain Technology
Satoshi Nakamoto, outlined a new protocol for a
point-to-point system using a cryptocurrency called
Bitcoin, called blockchain, originated in 2009 when
Nakamoto described cryptocurrency as a model of
peer-to-peer transactions [35]. In this model, with
each new record, copies of the data are created [9],
solving a fundamental problem of transactions on
the internet that is trust. The easiest way to
understand blockchain is to think of it as a database
on the internet to store value, where all participants
in the network keep an identical copy [36]. It aims
to create a decentralized environment where no
intermediary is in control of transactions and data
[37].
The objective of the technology is to create a
decentralized environment where no intermediary is
in control of transactions and data [37][38]. Unlike
traditional databases, they do not use the client-
server network controlled by a designated central
authority.[39].This distributed ledger stores
transaction data in “nodes” [35], which are
interconnected computers around the world[40].
This decentralization is an important property since
the same information is in different nodes and is
only confirmed when there is a consensus on the
information between the nodes[41]. New
transactions are added, but previous information
cannot be removed [10], thus maintaining a growing
list guaranteeing the integrity of the system, even in
the face of dishonesty [9]. Its structure is chained,
composed of a header, including a hash (encrypted
header), containing its value, the data of the block,
and the hash of the block connected to it. The
creation of a new block is known as "mining" [10].
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Once the effort has been spent to satisfy a job test,
the block cannot be changed [15]. All nodes are
constantly updated with the information from the
most recent transactions, therefore all information is
available anywhere, on any node, at any time [36].
Each transaction generated by the nodes of the
network is a "block", and the cumulative set of
transactions across the entire network is the chain of
blocks: "blockchain" [42][43]. Its data structure is
linked, each part consisting of a header, including a
hash, containing the value of the hash itself, the
block data, and the hash of the block linked to it
[47][48].
Creating a new block is known as “mining” [10][38]
and no block can be created without this step [39].
To attach a new block to the blockchain, “miners”
have to go through a cryptographic function and
calculate a unique hash that meets certain criteria.
Solving this algorithmic challenge is what
represents a “proof of work” [35]. Nodes are
rewarded at each work test and there is a consensus
among all nodes [37][39]. Once the effort has been
spent to satisfy the proof of work, the block cannot
be changed [15]. All nodes are constantly updated
with the latest transaction information, therefore all
information is available anywhere, on any node, at
any time [36]. This is the crucial step to maintain
the integrity of the data registered in the blockchain,
protect the transaction and order of blocks [39].
In addition to the core functionality of distributed
reason, blockchain technology implementations
differ in their technical details and features [16].
Broadly speaking, there are currently two types of
blockchains: public and private. The Bitcoin
blockchain is an example of a public blockchain.
These networks are open to anyone [42]. The idea is
that if you have so many people on the network that
this unlimited number of computing power spread
around the world, theoretically available to the
network, is greater than the computing power of an
attacker [36]. A private block chain, on the other
hand, also registers the exchange of value between
the parties in a network, but access to the network is
restricted because not everyone can participate [42].
In this model, only authorized users have access to
the database, either for reading or writing, but they
offer transparency, privacy, and control within the
group [43]. In a private blockchain, the parties know
each other and there is no anonymity, as in a supply
chain network with known entities working to
produce and distribute products[9].
The blockchain enabled the creation of smart
contracts, computer programs that reside in this
technology, executed automatically [44].Designed
in 1997 by computer scientist Nick Szabo, the
application of smart contracts has gone without a
concrete use for more than a decade due to the lack
of a reliable source for its application, which has
been supplied with blockchain technology [45]. The
concept of smart contracts outlined so far will only
achieve its goal if it is combined with blockchain
networks. This is because you can only be sure of
the impartial execution of contractual rules if there
is a central agent in control[36].With the
blockchain, these computer programs can
automatically execute the terms of a contract
[10][44], store rules and policies of the terms and
actions negotiated between the parties [9].
Integrating these two concepts is to allow, in a
distributed manner, automatic workflows, which can
be as simple as "sending the product after receiving
payment" or even "distributing dividends to
shareholders after their declaration", with the
possibility of auditing and guaranteeing compliance
with the terms of the contract [42].
These contracts give rise to the concept of
"decentralized autonomous organizations" (DAOs),
the most complex form of a smart contract [45].
They operate autonomously without human
intervention, based on programmed rules, and
capable of even signing new contracts [36], enabling
aspects of traditional corporate governance using
software, enabling the benefits of formal corporate
structures, and at the same time flexing the scale of
informal groups [45].
2.4 Blockchain Technology and Public
Procurement
Various barriers hamper sustainability across supply
chains. Inefficient transactions, fraud, theft, and
mismanagement lead to a lack of trust and therefore
a need for better information sharing and
traceability [9]. However, the blockchain is a
technology that can be used to discourage fraud and
increase transparency and efficiency [35][39]. The
blockchain's ability to ensure trust, traceability, and
authenticity of the information, coupled with smart
contracts, means rethinking the management of
supply chains [9].
Blockchain together with other technologies can
perform traceability with reliable information
throughout the supply chain [39][46]. It is suggested
to use the blockchain in the supply chain, combined
with tags with an intelligent chip (RFID - radio
frequency identification) on the products that would
inform the origin, ownership, warranty, and other
necessary information [40]. With the incorporation
of the Internet of Things (IoT) in the blockchain
contractual fraud will be easily detected and
prevented [39].
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Today's supply chains rely heavily on centralized
information management systems, sometimes not
integrated and independent, and that have their own
pitfalls [9]. A system with a centralized database is
more likely to attack, corrupt data, and fail [46].
Blockchain follows a decentralized network model,
instead of storing all information in a database, as in
conventional cloud-based applications, information
is distributed and synchronized across all network
nodes [10][47]. The proposal of other systems with
a direct impact on the supply chain has already been
cited in [9][38][39][40][42][46][47][48][49][50].
Technological advances have caused a review of
sustainability practices [41]. However, data from
interviews with government officials emphasize the
difficulty in promoting transparency and traceability
in current procurement systems [49]. It is suggested,
for example, the inclusion of sustainable
procurement criteria in formal planning processes so
that it is properly implemented [5]. An integrated,
online system could solve this problem, assuming
that suppliers would keep their data up to date [49].
In research on the drug supply chain, it is observed
that products move through a chain that involves
several participants, which makes them complex
[47]. The blockchain also makes it easy to track
products as they move and change hands in the
supply chain [39].
The basic benefits of blockchain are related to
improving data integrity and transactions that are
irrefutable, which can result in information
traceability, transparency, which support the
reduction of corruption and fraud [10]. With this
technology, frauds can be avoided due to fidelity
and transparency, and it is also possible to ward off
unethical agents and hold the corrupt responsible for
social harm [9]. Impure or counterfeit products
waste resources of the population and governments,
in addition, it can diminish the general public
confidence in the effectiveness of the products [47].
Transparency and trust, data immutability, and
having a distributed database shared by society can
also influence sustainable supply chains[9].
3 Methodology
This work started with a systematic review of the
literature, to provide greater familiarity with the
problem, intending to make it more explicit.
Subsequently, a structured questionnaire was
applied and the data was analyzed using descriptive
statistics. The units of analysis were 92 prefectures
in the state of Rio de Janeiro, in Brazil, with a
sample population of 90 purchasing and bidding
managers. The data were obtained from primary
sources, by sending the questionnaire. The
questionnaires, adequate to the research objectives,
allow standardized questions and an analytical
approach to exploring the relationships between
variables [14]. The statements were based on the
literature, seeking to understand the barriers to the
use of sustainable public procurement. After
obtaining the emails from the responsible
departments, shipments took place from September
2019 to January 2020.
The questionnaire statements were elaborated as
questions, based on the literature, and in order to
seek later the understanding of possible barriers for
the use of sustainable public purchases. For this, the
variables that corresponded to the barriers related to
the application of sustainable public procurement,
the respective authors, and the correlation between
them, were identified in the bibliographic review, so
that the questions were in accordance with the
research questions.
In order to get closer to the managers' perception
regarding the statements, for ordinal classification
of responses and subsequent analysis of the results,
the Likert scale was used, composed of 5 multiple-
choice items from which the manager can choose
one of the five options: (1) totally disagree; (2)
disagree in part; (3) neither agree nor disagree; (4)
agree in part and; (5) totally agree. Each item
received a weight of 1 to 5 which were used for
statistical analysis of the results. The Likert scale
was developed with the objective of measuring
attitude, values, and beliefs about different aspects.
With the principle that the attitude follows a linear
continuum (positive or negative), this method of
creating items is widely used [51]. In these cases,
sociometric and psychometric scales are often used,
which are generally made up of a set of ordinal
items [52].
4 Analysis and Discussion of Results
The questions in the applied questionnaire sought to
identify the practices used in public purchases in the
organizations surveyed, elucidate the perception of
managers about barriers in public purchases and
how they could hinder more sustainable purchases.
The answers to the completed questionnaires were
tabulated in an electronic spreadsheet so that it was
possible to carry out their analysis using descriptive
statistics.
4.1 Information Sharing
Among the results found, what was most relevant
was the difficulty in specifying sustainable
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
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Walid Omar Owais,
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Volume 19, 2022
standards and criteria in terms of reference and
bidding documents due to the lack of knowledge of
the professionals. When examining this lack of
knowledge, it was found that 90% of the
respondents said they agree or totally agree that
there is difficulty in specifying sustainable criteria,
as shown in figure 7.
Fig.7: Lack of knowledge on how to specify
sustainability standards.
Source: Own work.
This result exposes that disinformation is a barrier to
sustainable acquisitions. It is through the technical
specifications of the products that the government
agencies describe the necessary characteristics for
the acquisition, therefore, it requires from the
employees knowledge and information in the
description of the documents which will be
requirements to be fulfilled by the competitors.
Their research on the main barriers of this
acquisition model [53], that one of the most
important issues is related to the lack of knowledge
of employees and collaborators about regulatory
information and technical knowledge in these
practices [17]. The answers show the conception
that there is a lack of information on technical
specifications that lead to a more sustainable
acquisition. As shown in the graph, none of the
respondents selected the options disagree or totally
disagree for this question, which demonstrates a real
feeling that there is a lack of knowledge on how to
specify sustainable products and equipment, which
somehow becomes a barrier to these acquisitions.
The responses on the difficulty in finding these
specifications in documents and websites, totaled a
proportion of 81% by the selection of I agree and I
totally agree also due to the lack of information on
the composition of sustainable materials and
products (figure 8).
Fig.8: Difficulty in finding technical specifications
about products and services that meet sustainability
standards.
Source: Own work.
Complementing this perception, point out that
intensifying information and raising awareness
about sustainable public procurement can strongly
support sustainable procurement [1]. As with studies
already mentioned a lack of information about
products with influences on the supply chain as a
major problem [54].
A barrier to the purchase of sustainable products is
the lack of knowledge of the buyer to assess the
characteristics of a specific product and recognize
the existing advantages in relation to the others.
Sustainability does not come in itself, it requires
sufficient resources and capabilities [8].
The second question with the highest proportion of
agreement was if there is difficulty to obtain
information about the value chain of products, since
the manufacturing and supply process. The
information needed for the selection of suppliers
and manufacturers is seen by industry and academia
as a critical issue for long-term success[41]. Careful
distinction and supplier assessment in the early
stages are necessary to ensure the sustainability of
these chains. A solution to this problem would be
communication between the interested parties about
the technical specification before the purchase [19].
The barriers found in the literature review and
corroborated through the issues discussed above
allow us to understand that there is a consensus on
the difficulty in obtaining knowledge about
sustainable criteria and standards as well as, if this
information is still available, the difficulty in
verifying it in the act from bidding to the
requirements related to the manufacturing process
and the supply of products along their path through
the supply chain. Studies suggest the use of tools
Totally
agree;
45%
Agree;
45%
Neither
agree nor
disagree;
10%
Disagree;
0%
Totally
disagree;
0%
Totally
agree;
36%
Agree;
45%
Neither
agreer nor
disagree;
9%
Disagree;
9%
Totally
disagree;
0%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
that encourage those responsible for opting for this
purchase model, helping both in consulting the
criteria to be specified and charged in the bidding
process and in verifying them, as suggested by
[54][55]. Future research is aimed at investigating
dissemination systems for sustainable public
procurement practices [56] and also proposes the
use of electronic procurement systems (B2B) for
government procurement[57].
Historical supplier performance and sustainability
data can be made available through this technology,
thus making it easier for employees to examine
internal energy savings and pollution abatement
practices and records to determine suppliers'
environmental activities, as suggested [56].
Therefore, with the use of blockchain, information
on product sustainability standards could be shared
with confidence among government agency
employees, reducing the difficulty of finding these
standards on the internet.
It’s been sought then to understand the managers'
perception of the use of a single system among the
members of the value chain and if this tool would be
useful in verifying the specifications and sustainable
criteria required in the bidding process. The answers
to this statement reached the highest proportion of
agreement (63% - totally agree and 32% - agree)
among all the questions presented, totaling 95% of
the approval options, as shown in figure 9.
Fig.9: Usefulness of a single purchasing system,
integrating producers and suppliers with the city
hall.
Source: Own work.
Organizations should design tools that can assist
sustainable procurement [54]. The barrier of
misinformation can be effectively alleviated using
blockchain technology [41].
The key success factor in sustainable public
procurement is based on the knowledge necessary to
support the information and training needs of the
personnel involved in related tasks [1], as public
procurement managers are not very sure how
sustainable procurement can be implemented and
what type of product is available on the market [54].
Considering that each product can have several
specifications, this information can be recorded on
the blockchain, along with its historical data. For
example, Ikea has a table made of wood cut in a
sustainable forest. The wood must be followed from
cutting to manufacture to the final product to ensure
that the tables were actually manufactured with that
specific wood. This process is complex, but it can
be managed with blockchain technology [9].
The aim was also to assimilate the idea of managers
about this complexity and specificity of the
composition of the various products and how they
become a barrier to transcribing them in the bidding
documents. Only 5% disagreed that there is no
difficulty and 68% agreed that it is complex, as
illustrated in figure 10.
Fig.10: The complexity and specificity of the
composition of products and services to be
purchased.
Source: Own work.
Government agents express concern about the
complexity of product components [49]. Even
though it is generally difficult to obtain information
about products, as well as to verify the
manufacturing process, blockchain can be used to
guarantee the purchase of sustainable products [9].
An integrated and online system could solve these
problems from the moment that suppliers would
keep their data available [49]. A proposal then
would be to use a system, based on blockchain
technology that integrates several members of the
Totally
agree;
64%
Agree;
32%
Neither
agree nor
disagree;
4%
Disagree;
0% Totally
disagree;
0%
Totally
agree;
27%
Agree;
41%
Neither
agree nor
disagree;
27%
Disagree;
5%
Totally
disagree;
0%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
value chain and society, forming an ecosystem of
open innovation. This model consists of a dynamic
and interactive network inserted in an innovation
mindset, a configuration focused on the creation and
diffusion of knowledge, including governments, the
value chain, and users [8]. The knowledge shared by
the blockchain could provide organizations with
information on the catalog of products and
suppliers, which would be an advance for this model
and purchase [55].
Innovation is strongly linked to problem-solving
and, currently, challenges are related to complex
problems that require structural changes in
individual and collective life, such as sustainable
development [8]. The historical record remains
forever unchanged [41]. It can also be understood
that the traceability of products would facilitate the
location of scarce products. Taking as an examplein
the context of pandemics such as that of Covid-19
[50], government officials would be able to locate
suppliers of masks, gloves, and other equipment and
materials to fight the disease. It is suggested that
companies can track hard-to-find products [41], as
well as more sustainable products [5], among other
examples already cited. It is possible to verify
products with a higher or lower level of greenhouse
gas emissions [9]. The traceability of medicines as a
solution to avoid counterfeit products in the supply
chain [47]. It is cited for controlling cannabis
production [58], for controlling meat production
[49], and agricultural production [46][48].
Blockchain can help supply chains detect unethical
suppliers and counterfeit products as all information
can only be registered by members with permission
[9]. It can also assist in monitoring, developing, and
selecting suppliers. These, in turn, must also take
care of the environment at all stages of production,
from the point of purchase to the point of sale [54].
The verification of this information by the
purchasing sectors could be facilitated through this
shared system, integrating the interested parties,
allowing inquiries such as the origin of the wood
and whether the food comes from family farming,
for example. By recording product data along the
supply chain, the blockchain allows the chain to be
inspected from raw material records to the final sale
[9]. This tool model allows transparent and efficient
control of raw materials and products, according to
production standards [38]. The ability to trace the
origin of products, in line with concerns about the
environment and the contribution of products to the
conservation of resources, are two cases that affirm
the blockchain's role in ensuring the sustainability of
products [41]. There is also the difficulty in tracking
the origin of the products in the case of the outbreak
of salmonella in the United States and E. Coli in
Chipotle Mexican Grill establishments, which
together made hundreds of people sick and it was
not possible to identify all the contaminated
products [9]. When a person becomes ill, it can take
days to identify the product, the shipment, and the
supplier. That said, Walmart has implemented a
blockchain tool that can obtain crucial data,
including suppliers, details about how and where
food was grown, and who inspected it, from a single
receipt [38]. Using a similar system, the
governments can be just as careful with school
feeding. Crops can be packaged, labeled with RFID
tags, and entered into a system that allows for the
storage of relevant information [38]. This same
model could be used by wood buyers who demand
that the products come from verifiable and
sustainable (or at least legal)sources for the timber
trade to maintain credibility in public opinion[33].
4.2 Product Life Cycle
It was also possible to identify that 55% of the
managers indicated that they do not carry out the
life cycle analysis to make the purchase decision, as
illustrated in figure 11.
Fig.11: Analysis of the life cycle of products, from
acquisition to disposal.
Source: own work
Public procurement awareness can mean changing
from a strategy focused only on cost to an
orientation on the cost of the life cycle [1].
In the context of sustainable public procurement, it
is essential to demonstrate that purchasing processes
and decisions need to go further, as the purchase
price does not reflect the financial and non-financial
gains offered by environmentally and socially better
assets. The possibility of tracing a product from its
production to disposal via the blockchain also
Totally
agree; 5%
Agree;
23%
Neither
agree nor
disagree;
18%
Disagree;
41%
Totally
disagree;
9%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
allows, through this history, to facilitate the
calculation of the value of the entire life cycle of the
product, and to create a base with increasingly safe
estimates [18].
It is noteworthy that not all the necessary
specifications for the analysis of the life cycle are
contained in the product labels [28]. The need for
reliable product comparisons also requires the
development of information-sharing instruments
[59]. The possibility of tracking a product from its
production to its disposal by the blockchain also
allows, through this history, to facilitate the
calculation of the value of the entire product life
cycle, and to create a base with increasingly safer
estimates [18]. It is quite challenging to carry out
the lifecycle analysis without a database to register
the products [28]. Using blockchain technology,
lifecycle analysis of products can be completed
using actual product data rather than estimating
values, as in current life-cycle analysis methods.
The total cost of the product can be related to the
production processes or any other stage of the cycle,
for example, the consumption of water during
manufacturing, the capacity for recycling, or
biodegradation at the end of its useful life [18]. This
accurate and real information is a great contribution
of blockchain technology in the domain of lifecycle
analysis.[41].
4.3 Unethical and Malicious Employees
With 77% agreement, the managers pointed out the
influence of unethical and malicious employees on
sustainable acquisitions, which are responsible for
the preparation of the public notices, as a barrier, as
shown in figure 12. The managers transmitted the
perception that there is a negative influence of these
malicious people on the specification of products
and services. In the study on sustainable
procurement in Malaysia, they found that political
corruption is one of the serious problems for
sustainable public procurement, given the favoring
of some suppliers [60].
A revolution has occurred by blockchain technology
in unreliable processes by replacing unethical
intermediaries with smart contracts, excluding
corrupt agents from the value chain [44]. Malicious
employees and intermediaries take advantage of the
fact that procurement processes are difficult to be
audited by control bodies or interested citizens,
however, the basic benefits of blockchain are related
to improving data integrity and transactions that are
irrefutable, which in turn can result in information
traceability and transparency, which support the
reduction of corruption and fraud [10].
With this technology, fraud can be avoided due to
fidelity and transparency, and it is also possible to
remove unethical agents and hold the corrupt
responsible for social damage [9].
Blockchain-based smart contracts eliminate human
judgment on transactions and the role of
intermediaries as professionals involved in
traditional contracts can be minimized [41]. The
breach of agreements in a blockchain chain is more
difficult than in traditional centralized systems, due
to the sharing of data and the possibility of auditing
and transparency [9].
Fig.12: Unethical and malicious employees being
responsible for purchasing documents.
Source: own work
Disintermediation, which is a crucial effect of
applying blockchain technology, can mitigate
potential opportunistic behavior [9]. However, the
basic benefits of blockchain are related to improving
data integrity and transactions that are irrefutable,
which, in turn, can result in information traceability
and transparency, which support the reduction of
corruption and fraud [10].
From the understanding of the respondents, 73%
agreed that the concept of decentralized autonomous
organizations (DAO) is a useful system model.
Totally
agree;
50%
Agree;
27%
Neither
agree nor
disagree;
18%
Disagree;
0%
Totally
disagree;
5%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
Fig.13: Utility of an autonomous computerized
system for the storage and management of purchase
data.
Source: own work
After choosing the products and materials necessary
for administration, a DAO could take over the
operationalization of purchases, already with a panel
of suppliers and products, with prices based on the
cost of the life cycle. The purchasing process can be
automated, integrating the stages of electronic
auctions, eliminating the favor of suppliers and
prices. With this technology, fraud can be avoided
due to fidelity and transparency, and it is also
possible to ward off unethical agents and hold the
corrupt accountable for social damage [9].
5 Conclusion
This work pointed out some sustainable public
procurement actions, their possibilities of providing
a better quality of life for society, and the barriers to
its implementation. With the advancement of
innovation 4.0 and blockchain technology, it is
possible to understand the proposals and
possibilities to reduce barriers related to public
procurement. After these observations and the
analysis of the results, we return to the problem
initially raised and it can be concluded that
blockchain technology has a great potential for
transformation for governments and in the
promotion of sustainable actions, in the creation of
an innovation ecosystem, and the requirements of
the activities of suppliers and actors in the value
chain.
The perception of public procurement managers
made it possible to verify that one of the main
difficulties of these managers is related to the lack
of knowledge and information that ends up making
public procurement unfeasible with a good
economic result and that meets the environmental
and social perspectives. However, studies are found
that cite examples and models of actions that meet
these objectives through government acquisitions.
The creation of an open innovation ecosystem, on a
distributed basis, integrating prefectures and other
government agencies, would make it possible to
share this knowledge.
The feeling about transparency and confidence in
public procurement has also been seen by this work.
Both variables were very well evaluated by the
participants as to their relevance in public
procurement. The transparency required from public
bodies is seen as a relevant factor for sustainable
procurement. The need for consensus on the
blockchain network for data changes and an
ecosystem through a distributed network, where
interested parties could actively participate in the
network, would guarantee the required transparency
in public administration. In other words, control and
inspection bodies, courts of accounts, and members
of organized civil society could be part of this
ecosystem and would have full visibility of the
products and services being purchased, in addition
to being nodes in the network and part of the
consensus needed to the data alteration.
This work did not reach the study on the application
of cryptocurrencies or tokens in the solution of the
proposed method.
It is therefore suggested that future studies and
research are focused on the practical application of
these findings on blockchain technology in
sustainable public procurement processes.
It is possible to conclude that innovation has
disruptive potential for sustainable public
procurement, allowing to meet economic and
environmental aspects, but also to attend mainly to
the pillar of social interests, giving the possibility of
reducing social inequalities and unemployment and
improving the quality of life of the population, made
blockchain an agent of change for governments.
Acknowledgement:
This work was supported by the Technology and
Business Management Laboratory of the School of
Engineering, Universidade Federal Fluminense and
by a research unit on Governance, Competitiveness
and by the Fundacaopara a Ciencia e a Tecnologia
of University of Aveiro, Portugal.
Totally
agree;
32%
Agree;
41%
Netiher
agree nor
disagree;
23%
Disagree;
0%
Totally
disagree;
4%
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
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Volume 19, 2022
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Sources of Funding for Research Presented in a
Scientific Article or Scientific Article Itself
This work was supported by the Technology and
Business Management Laboratory of the School of
Engineering, Universidade Federal Fluminense and
by a research unit on Governance, Competitiveness
and by the Fundacaopara a Ciencia e a Tecnologia
of University of Aveiro, Portugal.
Creative Commons Attribution License 4.0
(Attribution 4.0 International, CC BY 4.0)
This article is published under the terms of the
Creative Commons Attribution License 4.0
https://creativecommons.org/licenses/by/4.0/deed.en
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WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.69
Walid Omar Owais,
Marwan Mohammad Abu Fadda
E-ISSN: 2224-2899
804
Volume 19, 2022
