Public Procurement and Innovation
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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.
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Chapter 5: Public procurement of innovation as collaboration

The Role of Institutions

Max Rolfstam


The analysis in the previous chapter essentially considered the whole NHS as an organization containing different endogenous institutions. The exogenous component consisted of the ambition to diffuse a certain innovation while different endogenous institutions at play effectively provided ‘resistance’ to the envisaged change. Little attention was given to the extent to which any of these institutions could be considered as embedded in specific organizational sub-units within the NHS. The institutions themselves, rather than the organizational connection with specific organizations within the NHS, were at the core of the analysis. Such an approach is convenient, because it enables a discussion on institutions not clearly associated with a specific organization. One institution that belongs to that category is organized scepticism among physicians. Regarded as an institution, organized scepticism is more strongly connected to the medical community of physicians than to a specific organizational unit, such as a ward. It is an institution that transgresses formal organizations. To have a look at the other option, then, this chapter develops a perspective on endogenous institutional set-ups where the focal level is organizational. The underlying assertion is that organization-oriented institutional analysis may be particularly important for understanding how institutional factors may affect the success or failure of multi-organizational collaborations in public procurement of innovation. Although the basic theoretical foundations are the same as in previous chapters, the starting point here is an understanding of organizations as containers of a certain institutional set-up or rationality. The underlying idea is that any organization would undertake actions reflecting its rationality, which does not necessarily correspond to actions undertaken by any other organization.

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