Why buy innovation?
Public procurement accounts for about 14% of the European Union's (EU) gross domestic product - meaning it has enormous potential to guide new developments in a range of sectors, help to stimulate future markets and address key societal challenges. And public authorities who support the process of innovation or purchase innovative goods and services are often directly awarded with improved services at optimised costs.
What is innovation procurement?
Innovation procurement can involve buying the process of innovation, or buying the outcomes of innovation.
- Pre-Commercial Procurement (PCP): the public buyer describes their need, and procure businesses and researchers to develop innovative products, services or processes to meet the need.
- Public Procurement of Innovation (PPI): instead of buying 'off-the-shelf' solutions, the public buyer acts as an early adopter or launch customer of innovative solutions new to the market.
For further information on what innovation procurement is, and how to do it, see the European Commission's 2018 Guidance on Innovation Procurement.
Benefits of innovation procurement
There are meany reasons to do innovation procurement. It can help to:
- Improve public service effectiveness and efficiency,
- Solve problems and meet new needs with solutions not currently available on the market,
- Support start-ups and innovative SMEs to launch and grow.
So get started today with the support of the Innovation Procurement Platform - your one-stop-shop for the latest news, events and resources on innovation procurement!
EU Legal Framework
In January 2014, the European Parliament adopted new public procurement directives. These included changes to procurement procedures which were designed to facilitate the increase of innovation procurement. Changes included:
- Increased flexibility and simplification on the procedures to follow, negotiations and time limits;
- Clearer conditions on how to established collaborative or joint procurements which, through bulk purchasing, can provide the necessary demand to launch new solutions;
- Strengthening the use of life cycle costing, which describes all the phases through which a product passes from its design to its marketing and the discontinuation of its production;
- The creation of innovation partnerships which enable a public authority to enter into a structured partnership with a supplier with the objective of developing an innovative product, service or works, with the subsequent purchase of the outcome;
- The exemptions for procurement of R&D services currently included in the new Directives (which are the basis for PCP) will be maintained. Public procurers can therefore continue to undertake pre-commercial procurement.
For more information, visit the European Commission's website.