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Public Procurement as a Demand-side Innovation Policy in China - An Exploratory and Evaluative Study
[Thesis]. Manchester, UK: The University of Manchester; 2013.
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Abstract
There has been increased interest internationally in using public procurement as an innovation policy. China too has employed innovation oriented public procurement (IOPP) to implement its ‘indigenous innovation’ strategy. This thesis explores China’s IOPP policy processes, evaluates the appropriateness of these policies, and explains key issues identified.Literature strands on innovation, policy, public procurement, and IOPP are drawn upon to analyse IOPP and related policies. IOPP processes are conceptualized as dynamics shaped by the institutions, actors and interactions of innovation and public procurement systems. IOPP policies are framed as horizontal mixes of cross-domain interventions, and vertical mixes of goals, rationales, instruments, designed implementation structures, actual implementation processes, and outcomes. A criterion for evaluating policy appropriateness is coherence between the various dimensions. Macro-level policies impact on micro-level processes which in turn provide evidence of implementation. A multi-level case study methodology is adopted to link up macro/national, meso/regional and micro/local levels of policy design, articulation and implementation.Implementation is characterized through three IOPP policy channels, a channel being a characteristic group of policies to promote IOPP. Channel 1 employed ‘innovation catalogues’, which was unexpectedly terminated in 2011 in response to concerns from other countries over China’s perceived protectionist tendency. Channel 1 was found to be a centralized mechanism to implement general IOPP across all regions, sectors and levels of governance. As a one-size-fits-all approach requiring cross-domain, cross-level coordination, it failed to achieve coherence with the institutional fragmentation of China’s innovation and procurement systems. The other two channels were implicit, strategic IOPP approaches i.e. commercialization projects for ‘major technological equipment’ with a rationale of pre-commercial procurement (Channel 2), and demonstration programmes for emerging technologies with a rationale of creating lead markets (Channel 3). These two channels realized better coherence with China’s systems as both were targeted at specific sectors and levels. Cross-case analysis suggests that micro-level IOPP processes were more frequently shaped by local contexts of stakeholders, interactions and informal institutions rather than IOPP policies. Interventionist local governments and proactive suppliers played stronger roles than procurers in initiating IOPP. IOPP cycles followed diverse and informal pathways not always competition-based, which might have breached de jure procurement regulations but China’s weak formal institutions allowed this flexibility. Informal institutions sometimes mitigated flaws of formal ones and facilitated IOPP, but could easily play competing roles (notably regional protectionism) that hinder policy implementation.This thesis contributes to IOPP knowledge by: offering a conceptual approach to IOPP policy analysis concerning implementation and appropriateness evaluation; uncovering China’s IOPP dynamics based on which the understanding of IOPP as a research subject is deepened. Policy implications include lessons for catching-up countries emphasizing institutional capacity and government capability, and more general issues highlighting policy differentiation and complementarity, and intermediation.