Who should drive the procurement of innovation policy? by Dr. John Rigby

Posted on July 18, 2012


We have got to an interesting point now in the debate over the procurement of innovation. The major question for policy makers is who should be implementing this policy. As I said on the show the other week, pre-commercial procurement is at the moment relatively little used but it does form the basis for for technology transfer organiations to help out user departments in government. And on the other side, the various techniques and options within the existing directives make it possible to encourage the procurement of innovation by user departments where there is no R&D needed. However, in multi-level governance systems – federal states are a good example – it’s not easy to see at what level these kinds of schemes should operate.

This is so particularly when it comes to pre-commercial procurement. Should these schemes operate at the top level only, bringing the best ideas from the whole of the regulatory and economic area together in one place? This might get the best ideas, but it would be hard to make sure that the solutions proposed were attractive and could actually meet the needs of all of the users beneath them. And if you made the wrong turning, the level at which you made the error would have big economic social and political implications. And this would have bad implications for the policy. Every big innovative procurement scheme that fails makes it harder to do procurement of innovation next time. We know that the higher up you run these programmes, the more they can lose touch with actual procurers and their needs. Run these programmes too low down and you have duplication, and the competitions might not offer enough reward to gain the interest of companies.

At the moment, in the European context, we do have two levels. National schemes can deliver some things, and there is an option of doing some of the procurement of R&D at a higher level. As a counterpoint to the national schemes which are very locally focused and don’t get quite enough cross-border interest, higher level schemes could inject some useful variety. But the advice here is probably going to be “don’t make these procurements big, you will produce innovations that won’t work locally.” Another way of making these procurements work at the European scale is to work within industries and services that have common provision. There are signs that this may be happening.