Public procurement - Public purchasers as first customers
Why public procurement is important for innovation
Public procurement accounts for some 19% of GDP in the EU and offers an enormous potential market for innovative products and services. For spending on construction this figure reaches 40% and for defence, civil security and emergency operations almost 100%. At the same time there is a "market failure". On one hand, the demand is not able to encourage the market to answer to its needs: it is not giving the right signals. On the other hand, the offer is not known. Moreover, in a time of severe economic, social and environmental crisis, entrepreneurs and investors are more exposed to risk taking. This makes it even harder to develop new markets and to support innovation transfers. That is where the power of public purchasing has to play a role. For the latest news on public procurement of innovation visit the Procurement of Innovation Platform .
Improved public procurement practices can help foster market uptake of innovative products and services. At the same time these practices will raise the quality of public services in markets where the public sector is a significant purchaser. Public authorities should act as "launch customers" by promoting the use of innovation-friendly procurement practices. Member States are encouraged to take specific measures to stimulate innovation and research through improved public procurement practices. That requires changes in the administrative processes typically used by national, regional and local public procurement offices in preparing calls for tenders.
The Europe 2020 flagship initiative Innovation Union underlines the importance of Public Procurement of Innovation: "From 2011, Member States and regions should set aside dedicated budgets for pre-commercial procurements and public procurements of innovative products and services. This should create procurement markets across the EU starting from at least €10 billion a year for innovations that improve the efficiency and quality of public services, while addressing the major societal challenges. The aim should be to achieve innovative procurement markets equivalent to those in the US. The Commission will provide guidance and set up a (financial) support mechanism to help contracting authorities to implement these procurements in a non-discriminatory and open manner, to pool demand, to draw up common specifications, and to promote SME access."
The new guide on Public Procurement of Innovation is out: "Public Procurement as a Driver of Innovation in SMEs and Public Services"
This guide is available as a "Flipbook" version (please click on the image) and as a PDF: Public Procurement as a Driver of Innovation in SMEs and Public Services
The guide shows to policy-makers in the European regions and at national level what they can do to support innovation procurement. It presents potential tools to unlock the "power of the purse" of public procurement that can be used by regions. Examples from some regions illustrate these suggestions and should inspire other regions to engage in innovation procurement.
It will be soon available in all 23 languages of the European Union.
Find other PPI guidance material on the PPI platform.
Public Procurement of Innovation Award 2014
High precision cleaning robots, similar to the set-up employed by car manufacturers, disinfecting beds.
On 25 September, in Ghent (Belgium) during the "EcoProcura" conference, the winner of the Public Procurement of Innovation Award 2014, Erasmus Medical Centre Rotterdam (the Netherlands), was announced by the European Commission, Directorate General Enterprise & Industry.
The Dutch hospital, which overcame competition from five other finalists, was praised by the jury for its "innovative robotic bed washing facility".
The Erasmus University Medical Centre asked the bidders to design a more cost and environmentally efficient solution to disinfect the hospital's 70,000 beds and mattresses. The contract was won by the small spin-off SME IMS Innovations, who proposed a creative approach - high precision cleaning robots that disinfect the beds in a conveyor belt format, similar to the set-up employed by car manufacturers. Through the facility, the cleaning costs per bed were lowered by 35 percent compared with the existing solution, and the CO2 footprint reduced by 65 percent.
The City of Oslo (Norway), Région Rhône Alpes (France), and A Coruna City Council (Spain) were given honourable mentions during the ceremony.
The jury also praised the private companies who supplied the innovative solutions, with each company involved in the procurement processes commended for contributing to a more efficient and competitive Europe. "Public procurement has a significant role to play in stimulating innovation to ensure that Europe successfully meets future economic, social and environmental challenges. Procurement requirements that demand innovative solutions can stimulate new sources of jobs and growth in Europe. I warmly congratulate the winner of the PPI Award and I hope that the procurement practices of the winner and the nominees will act as an inspiration to others", said European Commissioner Ferdinando Nelli Feroci.
More information at: http://www.innovation-procurement.org/award/
The 2014 Award Winners: the supplier, IMS Innovations (M. Aren Mijs) and the procurer, Erasmus University Medical Centre (M. Jeroen Veenendaal) with Mr Bonifacio Garcia-Porras of DG Enterprise and Industry, European Commission.
Conference "Bridge the Innovation Gap by Innovation Procurement: Enabling new forms of cross-sector", Brussels 26-27 June
Enabling new forms of cross-sector collaboration by Pre-commercial Procurement and Public Procurement of Innovative Solutions.
This high-level event offered an opportunity to hear first-hand from the Committee of the Regions, the European Parliament, the European Commission, Cities and Regions how they are supporting the implementation of Public Procurement of Innovative Solutions (PPI) and Pre-Commercial Procurement (PCP). In other words, how public purchasers are enabled to buy better and/or cheaper products and services while at the same time boosting innovation. From a European perspective, European Commission services will present 2015 calls for proposals as well as future financial instruments (Horizon 2020, CEF, Structural funds 2014-2020) to support the demand for innovation and innovative procurement.
Find the agenda and presentations.
Conference in Krakow on public procurement of innovation (November 2013)
To continue the debate on innovative public procurement the European Commission, together with the Polish Ministry of Economy and Małopolska Region, have organised a conference on Public Procurement of Innovation (PPI) & Pre-Commercial Procurement (PCP) in Kraków, Poland on 14-15 November 2013.
This high-level event offered an opportunity to hear first-hand how European Commission, Member States and regions are supporting the implementation of Public Procurement of Innovative Solutions and Pre-Commercial Procurement. In other words, how public purchasers and private procurers can buy good value products and services while at the same time boosting innovation. A special focus was placed on recent developments in the support of innovation procurement in Central Europe, as well on the basis of Polish experiences from policy makers or practitioners involved in European buyers’ groups of innovative solutions. Find the agenda and presentations here .
Where can you get more information?
For further information, send your request to the unit Innovation Policy for Growth of the Directorate General Enterprise and Industry.
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