Public Procurement and Innovation

Public Procurement and Innovation

The Role of Institutions

Max Rolfstam

Max Rolfstam examines the increasing emphasis on public procurement as a means to stimulate innovation and the theoretical implications of this policy development. While ‘regular’ public procurement may be regarded as the outcome of anonymous market processes, public procurement of innovation must be understood as a special case of innovation, where social processes, and consequently the institutions governing these social processes, need to be considered. This book contributes to our understanding with a detailed institutional analysis of the public procurement of innovation.

Chapter 6: Public procurement of innovation as endogenous–exogenous knowledge conversion

Max Rolfstam

Subjects: business and management, public management, innovation and technology, innovation policy, politics and public policy, public administration and management


The previous chapter discussed a case of public procurement of innovation where alignment and coordination of the involved rationalities did not happen to the extent required for a successful outcome. In the sense that the role of the procurers was mainly to facilitate the procurement on behalf of the future operator of the power plant the project was also catalytic. The fact that the project ended in the way it did is interesting, as it is implied in the Hommen matrix that coordination is a much more important success factor for cooperative public procurement of innovation than for public procurement of innovation involving a single procurer aiming at satisfying an intrinsic need. In that sense the outcome of the case is consistent with what is implied by the Hommen matrix. Another implication of the case is that any attempt to develop more knowledge on this topic must be based on an understanding of public procurement of innovation as a phenomenon that incorporates many aspects that go beyond the technical procedures related to the tender call and the award process. Thinking of public procurement of innovation as a process where ‘a public agency places a bid’ is simply not enough, as it may neglect many important determinants for success. This chapter attempts to develop this wider perspective further by comparing the case discussed in the previous chapter with another case of public procurement of innovation that took place in Sweden just a few years before the English case.

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