Chapter 15: Public procurement of innovation
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Recent years have witnessed a renewed interest, both in academia and in policy discussions, in the influence of public procurement on the development and introduction of new goods and services. Public procurement – understood as the acquisition of goods and services by government or public sector organisations – has also been an integral part of recent demand-side innovation policy initiatives. Edler (2010, p. 177) defines demand-side policies as ‘a set of public measures to increase the demand for innovations, to improve the conditions for the uptake of innovations and/or to improve the articulation of demand in order to spur innovation and the diffusion of innovations’. Whilst debates about the influence of ‘demand’ on innovation are not new, the broad interest in the use of public demand as a driver of innovation is a significant development in innovation policy design. For instance, procurement for innovation was an element of the European Commission’s Action Plan to raise R & D expenditure to the 3 per cent Barcelona target. Subsequent programmatic European innovation policy papers (Kok et al. 2004; Aho et al. 2006) emphasised a need to promote policies driving demand for innovation, including public procurement. Consequently, the EU Commission set up the European Lead Market Initiative (EU COM 2007a; CSES and Oxford Research 2011), focused largely on sectors in which the state is an important purchaser, and considered public procurement to be one of the key instruments for the creation of ‘lead markets’ in Europe.

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