EC support to Innovation Procurement
The 2012 Spring European Council agreed that efforts must be stepped up to make demand-led innovation a main driver of Europe’s R&D policy. In this context public authorities have a very significant role to play in stimulating growth and jobs via the use of public procurement of innovation.
Considering that 19% of EU GDP is spent by different levels of government, public bodies and utility service providers on procurement of goods, works and services, public procurement of innovation offers tremendous potential. The procurement of innovative products/ services can be a key driver of modernising the public sector. It can also accelerate the market uptake of innovative products/ services by finding first customers for innovative companies.
However, the European Public Sector innovation scoreboard 2013 shows that the public sector does not sufficiently exploit its potential as a driver of business innovation through public procurement. Public procurers need to change their traditional cautious stance and trigger industry’s interest in developing innovative solutions based on specific needs of public procurers. At the same time, enabling innovative companies and particularly SMEs to find their first clients is important. Both pre-commercial procurement as well as public procurement of innovative solutions are methods for doing innovation procurement.
In its Innovation Union Communication the EC calls on Member States and regions to set aside budget for innovation procurement equivalent to at least EUR 10 billion per year.
Some Member States have already adopted legislation in order to foster the development of innovation procurement. A few categories have been identified:
1. Binding or indicative targets at national level for innovation procurement, e.g. Spain
2. Programmes at national level to procure innovation, e.g.UK
3. Developing guidance and PPI action plans, e.g. Austria, Sweden, Norway, Denmark and Finland.
There are also still reasons why innovation procurement is not already taking place on a larger scale:
- Public authorities have no or the wrong incentive to buy R&D or innovative solutions from a new company.
- Public procurement markets are fragmented in Europe, making it more difficult to reach critical mass and missing opportunities for fostering more standardizsed or interoperable solutions.
The EC itself has provided financial support to pilot projects in innovation procurement since 2009 with significant amounts. The EC intends to give financial support to innovation procurement on a larger scale in Horizon 2020 projects, starting from 2014.
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