Helping public bodies procure innovative solutions

Research at The University of Manchester has helped to design sustainable public procurement policies and stimulate innovation across the EU, Latin America and beyond.

Using public procurement as a catalyst for innovation

Public procurement is the process by which government departments purchase goods and services from the private sector. As it accounts for 14% of EU GDP and 20% of Latin-American GDP, it has the potential to be a huge market for innovative products. If used strategically, public procurement of innovation (PPI) can help governments boost productivity and address pressing societal problems, but so far, its potential has not been realised.

Professors Jakob Edler, Elvira Uyarra and Luke Georghiou from The University of Manchester conducted research to investigate how large-scale public procurement budgets can become catalysts for more responsible innovation. The aim of the research was to understand how government actions, in the form of sustainable procurement policies and practices, incentivise innovative behaviour in firms.

The team conducted a survey of 800 companies selling goods or services to the public sector in the UK in order to identify the factors that enable or hinder PPI. Based on the results, the researchers were able to make suggestions as to which policy interventions were best placed to support and boost the procurement of innovative goods and services.

Shaping innovation schemes

As a result of the research, public procurement is now an enabler of innovation in the EU, Latin America and beyond.

The research team provided expert advice and guidance to the European Commission in the design of their new Innovation Procurement Broker scheme. The scheme facilitates commercial connections between suppliers of innovative goods and public buyers, increasing PPI capacity across Europe and leading to significant savings in public budget.

The scheme holds important economic leverage in the European Single Market where public procurement represents approximately 14% of European GDP, equating to two trillion euros every year.

Meanwhile in Latin America, the researchers advised on the creation of a new PPI funding mechanism at the Inter-American Development Bank and established national guidelines on PPI in Chile.

This resulted in the creation of a new online platform – the Chilecompra Innovation Platform – that matches 850 Chilean government agencies with national innovators, helping to mobilise large-scale public budgets to drive competitiveness in the private sector.