OECD Public Governance Reviews

2219-0414 (online)
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This series includes international studies and country-specific reviews of government efforts to make the public sector more efficient, effective, innovative and responsive to citizens’ needs and expectations. Publications in this series look at topics such as open government, preventing corruption and promoting integrity in the public service, risk management, illicit trade, audit institutions, and civil service reform. Country-specific reviews assess a public administration’s ability to achieve government objectives and preparedness to address current and future challenges. In analysing how a country's public administration works, reviews focus on cross-departmental co-operation, the relationships between levels of government and with citizens and businesses, innovation and quality of public services, and the impact of information technology on the work of government and its interaction with businesses and citizens.


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Public Procurement for Innovation

Public Procurement for Innovation

Good Practices and Strategies You do not have access to this content

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02 June 2017
9789264265820 (PDF) ;9789264265813(print)

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Public procurement offers an enormous potential market for innovative products and services. Used strategically, it can help governments boost innovation at both the national and local level and ultimately improve productivity and inclusiveness. Based on good practices in OECD and partner countries, this report analyses the state of play of procurement for innovation and provides a flexible framework focusing on 9 areas to promote it.

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  • Foreword and acknowledgments

    Governments are increasingly recognising the immense power of public procurement to solve global societal challenges, improve productivity and boost innovation, while ensuring value for money. Public procurement represents 12% of gross domestic product (GDP) and 29% of total government expenditures on average across OECD countries, a clear sign of its potential to support broader policy objectives, including the fostering of innovation.

  • Acronyms and abbreviations
  • Executive summary

    Achieving the best result for the best price, public procurement can also be used by governments as a strategic instrument to promote innovation, achieve socio-economic and environmental policy objectives and address societal challenges.

  • Public procurement for innovation: An overview

    This chapter provides the general background for, and overview of, Public Procurement for Innovation: Good Practices and Strategies. This includes a definition of procurement for innovation for the purposes of this report, an introduction to the methodology behind the findings, and an overview of the findings from the underlying OECD Survey on Strategic Procurement for innovation 2015.

  • The state of play in strategic procurement for innovation

    This chapter presents the state of play with regard to strategic use of procurement for innovation in OECD member countries and non-member economies. It presents the findings in six sections that lead up to the development of a framework to support procurement for innovation: 1) policies, strategies and instruments employed by countries to support procurement for innovation; 2) objectives of, and results following from, procurement for innovation as set out by the countries; 3) partners and beneficiaries of procurement for innovation; 4) challenges pertaining to the implementation of procurement for innovation; 5) lessons learned or successful levers to tackle these challenges; and 6) how different policy objectives can be combined.

  • OECD Framework to Promote the Strategic Use of Public Procurement for Innovation

    This chapter introduces a framework to promote the strategic use of public procurement for innovation. It identifies nine key areas for action to help countries promote the use of procurement for innovation. The framework is based on the OECD Survey on Strategic Procurement for innovation 2015 and the 2015 OECD Recommendation of the Council on Public Procurement.

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  • Expand / Collapse Hide / Show all Abstracts Factsheets from the country responses to the OECD Survey on Strategic Procurement for innovation 2015

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    • Austria

      Austria implemented the “Austrian Action Plan on Public Procurement Promoting Innovation PPPI” as a follow up of the “Austrian Strategy for Research, Technology and Innovation (2011)”. The strategy aims to create a “systemic, modern policy on research, technology and innovation” by using public procurement as a lever. The strategy has linkages to other policy areas, for example education policy and competition policy.

    • Belgium

      There is no dedicated procurement for innovation action plan at the federal level, but ad hoc initiatives exist. The federal administration focused on the development of an eprocurement platform, available to all Belgian public administrations. Other elements are: facilitation of SME participation, sustainability, maximising competition in framework agreements.

    • Canada

      The federal government of Canada has an Economic Action Plan of which the Build in Canada Innovation Program (BCIP) is part of. Industry Canada has Canada’s innovation strategy entitled “Seizing Canada’s Movement”.

    • Chile

      Currently, in Chile there is no strategic framework to manage innovation in public procurement. However, since 2014, the Dirección ChileCompra has been establishing a system for innovation management which focuses on promoting market integrity in public procurement.

    • Colombia

      The National Development Plan (2014-18) specifies procurement innovation as a cross-cutting strategy targeted to generate a higher economic and social value to enhance the conditions for the development of business activities. Procurement innovation is also conceived to provide the demand of good and services for specific needs in a more efficient way through innovation. This part of the governance strategy will be complemented with accompaniment services for the SMEs in the implementation of the necessary processes and investments to achieve higher quality standards.

    • Cyprus

      Cyprus does not have a strategic framework for procurement for innovation and no secondary policy objectives have been set for public procurement. However, in accordance with EU public procurement legislation, public procurement practices demand that every contracting authority assesses the needed innovation parameters of the contract concerned. Contracting authorities can do so at their discretion; the innovation parameters are to be reflected in the technical specifications or other procurement documents. Thus, procurement for innovation is conducted on a case-by-case basis. In addition, Cyprus’s Employers and Industrialists Federation has established innovation awards for certain sectors, including public sector innovation achievements.

    • Czech Republic

      In the Czech Republic there is no single policy document for setting a strategic framework for procurement for innovation (pre-commercial or commercial), and no innovation action plan. Nevertheless, public procurements in R&D and innovation are traditional tools of support to innovation solutions for public sector and an integral part of the Czech innovation policy. A conceptual shift regarding procurement for innovation is envisaged to stem from the key policy document for RDI policy, the “National Research, Development and Innovation Policy of the Czech Republic in 2009-2015 with an outlook to 2020,” updated in 2013. Based on this strategic document, there is interest in improving framework conditions (including legal conditions) for financing research and innovation projects of SMEs through public procurement. Furthermore, by 2016 the European Commission and Council Directive for public procurement will be transposed into the Czech legislation.

    • Denmark

      The framework for procurement for innovation is part of a national procurement strategy. In October 2013 the Danish government launched a “Strategy for Intelligent Public Procurement”.

    • Estonia

      Estonia has not (yet) developed and agreed upon a strategic framework for procurement for innovation. Elements of demand-side innovation policy are included in some initiatives and programmes, but this is not the outcome of systemic policy implementation. Innovation policy as such is governed by two ministries: the Ministry of Economic Affairs and Communications (MEAC) and the Ministry of Education and Research. Both ministries have developed strategies where the concept of and the need for further elaboration of procurement for innovation is presented: “Knowledge based Estonia 2014-2020” and “Estonian Entrepreneurship Growth Strategy 2014-2020.” The Estonian National Reform Programme “Estonia 2020” also indicates a need to transform public procurement regulations into an engine of development in fields important to the state (e.g. innovation).

    • Finland

      There is no stand-alone procurement for innovation action plan in Finland; however, the country has an overall national strategic framework with objectives. The implementation takes place through various sectors and sector strategies. This allows ownership and taking into account sector specific characteristics and demands.

    • France

      The framework of procurement for innovation in France is part of the innovation strategy as a demand-side support tool. The main objective is to support the growth of innovative SMEs by funding the development of their innovations, providing them with access to new markets and quality references. Public procurement is considered a way to increase the public funding of innovation. The innovation policy highlights how public procurement can act as a level for these policy goals.

    • Germany

      Procurement for innovation is part of the overall innovation strategy of the German federal government. The “High-tech-Strategy Germany” encompasses all research, technology and innovation measures of the German government. Innovative procurement is the most important measure under the framework of demand oriented policy instruments. The overall strategic goal is to encourage public procurers to buy more innovative and sustainable products. Recently, the ministers for economic affairs of the federal states (Länder) also decided to put stronger emphasis on innovative and sustainable products and services in public procurement.

    • Greece

      Greece does not yet have an procurement for innovation action plan. However, Greece is taking first measures addressing this issue. Greece’s smart specialisation strategy (RIS 3) 2014-20 includes a programme on Pre-commercial Procurement, conducted by the General Secretariat for Research and Technology (GSRT) and the Ministry of Education, Research and Religious affairs. The programme has a budget of EUR 40 million. A pilot is under preparation.

    • Hungary

      Public procurement promoting innovation has a high position on the Hungarian policy agenda. Both on the European and the national level, it is regarded as an important demand-side instrument. While there is no stand-alone procurement for innovation action plan yet, procurement for innovation is addressed in Hungary’s part of the EU strategy EU2020 as well as in the “Investment into the Future” - The National Research and Development and Innovation Strategy 2013-20 and in the National Smart Specialization Strategy (S3). The S3 has Pre-commercial Procurement as one of its pilot projects to be carried out in 2017-18.

    • Ireland

      As part of the Public Service Reform Plan, the government is reforming the public procurement process to deliver greater value for money through increased use of common procurement frameworks, centralised purchasing, increased professionalism and more innovative use of technology. The government has established an Office of Government Procurement (OGP) as an independent body under the aegis of the Department of Public Expenditure and Reform to drive a new consolidated and integrated approach to public procurement.

    • Italy

      At the time of the OECD Survey, the Ministry of Education, University and Research (MIUR) was about to pass the National Research Plan (NRP) 2015-20. This plan aims at streamlining, simplifying and boosting the national research system by sustaining all research phases with new funds and by offering a stable and innovative policy framework. The NRP fosters policies that sustain research through the promotion of public demand for innovative solutions, and makes pre-commercial procurement an integral part of Italian national research policy.

    • Korea
    • Lithuania

      There is growing attention towards demand-side innovation policies in Lithuania. Lithuania’s procurement for innovation action plan is part of the country’s general innovation and procurement strategy. The importance and potential of procurement for innovation is stressed in the Lithuanian Innovation Development Programme 2014-20. The necessity of the model of pre-commercial procurement was stated in the programme. The Ministry of Economy published Guidelines on Innovative Public Procurement. These guidelines describe how public procurers can buy goods, services or works of better quality, more adapted to their needs, services or goods that could enhance performance of public procurers and quality of their services, and increase demand for innovation on the market. To add, the Ministry of Economy has drafted and the government of Lithuania in 2015 has established the description of pre-commercial procurement. The survey of public purchases for pre-commercial procurement has been carried out recently and the need of approximately 80 pre-commercial procurements were recognised.

    • Malta

      Malta has limited experience with procurement for innovation, and does not have a stand-alone procurement for innovation policy. However, existing procurement structures do allow for procurement for innovation to take place and a number of examples of the application of procurement for innovation exist.

    • Mexico

      In 2013, President Enrique Peña Nieto instructed the Ministry of Economy to create a programme to drive innovation through public procurement.

    • Netherlands

      The Netherlands have a goal to spend 2.5% on innovation. There is a stand-alone procurement for innovation action plan: the programme “Innovatiegericht Inkopen”, which includes the use of PPI, PCP, SBIR and other instruments that stimulate innovation among contracting authorities prior to the actual procurement. The programme focuses on the stimulation of the dialogue between contracting authorities and businesses prior to the actual procurement, the insight in market challenges and demand articulation. Procurement for innovation aims at providing room for innovation in public procurements and actively challenging businesses to deliver innovation.

    • New Zealand

      New Zealand is committed to open, transparent and competitive government procurement that: delivers best value for money, does not discriminate against suppliers (whether domestic or international) and meets agreed international standards.

    • Norway

      Procurement for innovation has been a priority of the current government since 2013 and was formulated in the government platform. Implementation is the responsibilities of the ministries and agencies. The previous government had a separate action plan (2013). This action plan is was voted and approved by parliament as a measure in a white paper.

    • Poland

      Poland does not have a stand-alone procurement for innovation action plan nor is the procurement for innovation action plan part of the country’s general innovation or procurement strategy. The National Action Plan on Sustainable Public Procurement 2013-16 is a document in the process of implementation targeting strategic procurement, however its scope is limited to green and social procurements.

    • Portugal

      Portugal does not have a specific strategic framework for procurement for innovation or a stand-alone procurement for innovation action plan. Nevertheless, the general legal system in Portugal supports procurement for innovation. The most important regulation in Portugal’s legal framework related to procurement is the Public Contracts Code (2008). The legal framework specifies the scope for procurement for innovation policy. This code makes e-procurement mandatory and is in this regard a motor of innovation. As a result of implementing e-procurement, SMEs (either alone or as part of an association) have better access to public markets because tender submission is easier. The code also sets the “most economically advantageous tender (MEAT)” criterion, which enables the contracting authority to consider criteria that reflect technical, innovative and sustainable aspects in addition to price. To facilitate access by SMEs, the code provides for measures like division into lots, adoption of regional criteria, and multi-access criteria.

    • Russian Federation

      The Russian Federation specifies requirements related to procurement for innovation in the law, including obligations (as percentage shares) for innovation products to be procured. State-owned enterprises (SOEs) are obliged to purchase innovations and to publish their plans for procurement for innovation. Initially, the target is set at 2.5%; this target will be increased to 5%. The government will issue regulations on how to calculate the target. Than the plans for procurement for innovation should be published by the middle of the next year. An official must be named in every SOE who is in charge of innovation programmes and procurement. The value for innovation might be 20-25% (under discussion).

    • Serbia

      Considering that there is no strategic framework on procurement for innovation in Serbia, the country follows on World Bank procedures, slightly modified and simplified to be more tailored to the best practice and well-established private sector procurement methods. These amended procedures (i.e. the commercial practice) are described in a manual.

    • Slovak Republic

      The Slovak Republic does not have a strategic framework yet, and there is no standalone action plan. However, there are initiatives in support of procurement for innovation planned.

    • Spain

      Spain does not have a stand-alone procurement for innovation action plan, the procurement for innovation action plan is both part of the country’s general innovation strategy and part of the procurement strategy:

    • Sweden

      Sweden does not have a specific procurement for innovation action plan. Instead, procurement for innovation is embedded into the National Public Procurement Strategy (2016). The public procurement strategy is mostly directed to governmental agencies since regional and local levels of government are independent in Sweden. The strategy does however give guidance on a wide variety of procurement for innovation aspects to national, regional and local levels of government as well as suppliers. It was also embedded into the Swedish innovation strategy (2012). Some regions, county councils and larger municipalities also include procurement for innovation in their strategies on development, innovation and procurement.

    • Switzerland

      Switzerland does not have a specific strategic framework for procurement for innovation nor a stand-alone procurement for innovation action plan.

    • Turkey

      Tukey’s “Programme for Technology Development and Domestic Production through Public Procurement” is one of the 25 primary transformation programmes within the frame of 10th National Development Plan (2014-18). The Grand National Assembly of Turkey approved the programme in 2013. The aim of the programme is to use public procurement to promote innovation, domestic production, technology transfer and innovative entrepreneurship. The programme’s scope comprises several aspects: considering a domestic R&D and innovation contribution requirement in public procurement and establish a right to use allocations; promoting innovation, domestic industry and technology transfer; and increasing foreign direct investment (FDI) by policies implemented in public procurement. The programme is co-ordinated by the Ministry of Science, Industry and Technology.

    • United Kingdom

      The United Kingdom’s main vehicle for taking forward procurement for innovation is the Small Business Research Initiative (SBRI).

    • United States

      The United States has a stand-alone action plan on procurement for innovation, issued by the Office of Management and Budget in 2010, and titled “25 Point Implementation Plan to Reform Federal Information Technology Management”. The plan contains a number of quantified targets, such as: terminating or turning around at least one-third of underperforming projects in the IT portfolio; increasing cloud usage; reducing the number of federal data centres by at least 800 by 2015. In addition, the plan envisions to solidify and consolidate funding, introduce flexible budget models, increasing the professional capacity, and launching an interactive platform for agency/industry collaboration.

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