Edited by Charles Edquist, Nicholas S Vonortas, Jon M Zabala-Iturriagagoitia and Jakob Edler
Chapter 6: Innovation and public procurement in the United States
The public sector accounts for a significant part of economic activity in Organisation for Economic Co-operation and Development (OECD) member countries. The average share of government expenditures in gross domestic product (GDP) is above 40 percent, varying from over 50 percent in Sweden and France, to about 35 percent in Japan and the United States, to around 20 percent in Mexico (OECD, 2009). The performance of the public sector, along with its efficiency in providing public services, has been a major concern in democratic societies since ancient times. The primary source of this concern is the relative size of the public sector and the fact that it administers taxpayer funds. Pressures on the public sector for increased efficiency and productivity of resource use have mounted in recent years resulting in many calls for innovation, both process and product and service innovation. As far as the public sector is concerned, process innovation means providing more (perhaps marginally improved) services at the same (or even lower) cost. Product innovation means providing new or significantly improved services. In either case, public expenditures for acquisition can influence the ability of the rest of the economy to produce new and significantly improved products and services, or to produce them more efficiently.
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