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 9: Closing the loop: examining the case of the procurement of a sustainable innovation

Jillian Yeow, Elvira Uyarra and Sally Gee

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


The potential of public procurement of innovation to address ‘grand challenges’, such as sustainability, is increasingly acknowledged in both policy and academic circles (Edler and Georghiou, 2007; Edquist and Zabala-Iturriagagoitia, 2012). Procurement is indeed increasingly being used to address multiple policy agendas and objectives, be these social, environmental or otherwise (Erridge, 2004; McCrudden, 2004). This chapter explores the potential of the public sector to pursue specific sustainability goals through the procurement of innovation. This is done through an examination of a UK government initiative to collect and recover its own paper waste and produce a ‘closed-loop’ recycled copier paper. The model involves the shredding of confidential paper waste on-site, and the subsequent processing of this waste into recycled copier paper off-site, which is then sold back to government departments for their use. A key innovation in this process is the earmarking of paper supply for return to the (contributing) client organization. Creating a ‘closed loop’, the paper introduced traceability into waste disposal, ensured data security, stabilized expenditure on paper, reduced associated costs, and enabled both supplier and government client to capitalize on a burgeoning paper market. We detail how the parties involved also stimulated organizational, environmental and supply chain innovation through their procurement (purchasing) activities to achieve a more efficient, more sustainable and more cost-effective outcome. This chapter therefore deals with the process leading to the development and co-design of the ‘closed loop’, and addresses the main drivers and barriers influencing this particular innovation.

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