Public Procurement for Innovation

Public Procurement for Innovation

Eu-SPRI Forum on Science, Technology and Innovation Policy series

Edited by Charles Edquist, Nicholas S Vonortas, Jon M Zabala-Iturriagagoitia and Jakob Edler

This book focuses on Public Procurement for Innovation. Public Procurement for Innovation is a specific demand-side innovation policy instrument. It occurs when a public organization places an order for a new or improved product to fulfill certain needs that cannot be met at the moment of the order. The book provides evidence of the potential benefits to public and private actors from the selective use of this policy instrument and illustrates the requirements and constraints for its operationalization. The book intends to significantly improve the understanding of key determinants of effective public procurement aiming to promote innovative capabilities in the supplying sectors and beyond. It provides both case studies and conceptual contributions that help extend the frontier of our understanding in areas where there are still significant gaps.

Chapter 7: Public procurement for innovation elements in the Chinese new energy vehicles program

Yanchao Li, Luke Georghiou and John Rigby

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation, innovation policy, politics and public policy, public administration and management


China began to use public procurement as an explicit instrument of innovation policy (that is, public procurement for innovation or PPI) in 2006 when the National Medium-and Long-Term Program for Science and Technology Development (2006–2020) (hereafter MLP (2006–2020)) was announced. During 2006–2009 the central government launched further policy measures to implement PPI (for a detailed account see Li, 2011). The main (intended) approach to implementation was through ‘innovation catalogues’. These were lists of innovative solutions, accredited by the Ministry of Science and Technology (MOST), contained within ‘PPI catalogues’. They were to be produced by the Ministry of Finance (MOF) to guide government procurers in buying innovative solutions (Li and Georghiou, 2014). A second instrument, ‘signalling catalogues’, that is, lists of technologies that are identified as being much needed in China by the central government, were recognized as a complementary instrument to better link demand and supply (ibid.). This catalogue approach can be regarded as being what Edler and Georghiou (2007) termed ‘general procurement’, that is, an organized, ‘routine’ PPI mechanism where innovation becomes an explicit criterion in the tendering process. The implementation of this approach in China has, however, come to a standstill, as a result of both domestic obstacles and international pressures.

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