Procurement Are Being Reshaped by ICV Certification

How Supplier Strategy and Procurement Are Being Reshaped by ICV Certification

In today’s competitive and rapidly evolving economic environment, businesses are no longer assessed solely on financial performance and operational efficiency. With national visions focusing on economic diversification and sustainable development, local value creation has become a key priority—particularly in regions like the Gulf Cooperation Council (GCC). At the center of this transformation is the In-Country Value (ICV) certification, a mechanism that is significantly reshaping supplier strategies and procurement practices.

What Is ICV Certification?

ICV certification measures the value a company brings to the local economy through its operations. This includes factors like local sourcing, Emiratization or national workforce employment, investment in local assets, and overall contribution to domestic GDP. In countries like the UAE and Oman, ICV has become a cornerstone of government and semi-government procurement policies, designed to support national economic agendas.

Shifting Procurement Priorities

Traditionally, procurement departments have focused on cost, quality, and delivery timelines when selecting suppliers. However, with the rise of ICV, a supplier’s local contribution is now a vital part of the evaluation process. Public and private sector entities are revising their tendering processes to give preference to suppliers with high ICV scores. This shift is compelling suppliers to reevaluate their own strategies—focusing more on local sourcing, hiring local talent, and investing in local infrastructure.

Impact on Supplier Strategy

To stay competitive, suppliers are now integrating ICV objectives into their core business strategies. This includes:

• Forming local partnerships with manufacturers and service providers

   

• Training and hiring local talent, often in collaboration with government initiatives

   

• Investing in local facilities, R&D centers, and supply chain infrastructure

   

These actions not only improve a supplier’s ICV score but also deepen their integration into the local market, fostering stronger, more sustainable business relationships.

Driving Long-Term Value

The ICV framework encourages long-term thinking. Procurement is no longer just about immediate needs—it’s a strategic lever to build local capabilities and reduce reliance on foreign suppliers. This is particularly important in sectors like oil & gas, construction, manufacturing, and renewable energy, where localization of services is crucial.

Moreover, companies that embrace ICV early often find themselves ahead of the curve, gaining preferred supplier status and increased access to large-scale government and corporate contracts.

Challenges and Opportunities

While the benefits of ICV are clear, implementation does come with challenges. Small and medium enterprises (SMEs) may struggle with the initial investments required to boost their ICV performance. However, government support programs and partnership models are emerging to address this gap.

At the same time, ICV opens up opportunities for innovation, skill development, and the growth of local industries, turning compliance into competitive advantage.

Conclusion

The ICV certification is much more than a regulatory requirement—it’s a transformative tool that is redefining procurement and supplier dynamics. As countries continue to focus on local value creation, companies that align their procurement strategies with ICV principles will not only thrive in a changing landscape but will also play a key role in shaping the future of national economies.