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From whence the knowledge came: Heterogeneity of innovation procurement across Europe

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To induce innovation in the public sector, Directive 2014/24/EU encourages internal and external consultation during the procurement process. However, little is known regarding the prominence of these practices. Determining the extent of knowledge sourcing in innovation procurement across 29 European countries, this paper presents an institutional cluster analysis, examining heterogeneity across knowledge sourcing activities, procurement areas, and tender innovation outcomes for 1,505 public procurers from 2008-2010. Building upon existing taxonomies, three types of procuring agencies are identified: Large collaborative agencies practicing public procurement of innovation (31%); supplier-focused pre-commercial procurers (20%); and direct procurers at the municipal level (49%). Validation supports this heterogeneity, using innovation outcomes and policy drivers. At the country level, Spain and the United Kingdom, Italy, and Germany and Poland are most represented in respective clusters. Findings enable predictions regarding impacts on agencies and innovation from the new public procurement directive’s translation into national law by Member States.
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JOURNAL OF PUBLIC PROCUREMENT, VOLUME 16, ISSUE 4, 463-504 WINTER 2016
FROM WHENCE THE KNOWLEDGE CAME:
HETEROGENEITY OF INNOVATION PROCUREMENT ACROSS EUROPE
Anne Rainville*
ABSTRACT. To induce innovation in the public sector, Directive 2014/24/EU
encourages internal and external consultation during the procurement
process. However, little is known regarding the prominence of these
practices. Determining the extent of knowledge sourcing in innovation
procurement across 28 European countries, this paper presents an
institutional cluster analysis, examining heterogeneity across knowledge
sourcing activities, procurement areas, and tender innovation outcomes for
1,505 public procurers from 2008-2010. Building upon existing taxonomies,
three types of procuring agencies are identified: Large collaborative agencies
practicing public procurement of innovation (31%); supplier-focused pre-
commercial procurers (20%); and direct procurers at the municipal level
(49%). Validation supports this heterogeneity, using innovation outcomes
and policy drivers. At the country level, Spain, the United Kingdom, Italy,
Germany and Poland are most represented in respective clusters. Findings
enable predictions regarding impacts on agencies and innovation from the
new public procurement directive’s translation into national law by Member
States.
INTRODUCTION
Directive 2014/24/EU encourages public procurers to induce
innovation in government services and private firms, supporting
efficiency in public spending and societal goals (European
Commission {EC], 2014, p. 65). Changes in the new directive promote
interactions with other governments, potential suppliers, and users
---------------------------
* Anne Rainville, MA, is a Research Fellow and Doctoral Candidate at the
Chair of Innovation Economics, Institute for Technology and Management,
Technical University Berlin. Her research interests are in how to leverage
government-industry interactions in public procurement toward greater
sustainability impacts.
Copyright © 2016 by PrAcademics Press
464 RAINVILLE
that can be achieved by using innovation procurement: an approach
to improve purchasing through process management, which may
“help the market uptake of innovative products and services”
(European Research Area and Innovation Committee [ERAC], 2015, p.
2).
As used here, innovation procurement consists of public
procurement of innovation (PPI), pre-commercial procurement (PCP)
and innovation partnerships. Innovation procurement has received
only limited study (e.g., Edler and Yeow, 2016; Uyarra et al., 2014),
with many more studies instead concentrating on innovative criteria
(EC, 2013; Nissinen, Parikka-Alhola, & Rita, 2009; Wegweiser et al.,
2009). Although public purchasing across Europe amounts to 19% of
GDP (ERAC, 2015), innovation procurement remains uncommon
(Uyarra et al., 2014) and varies across institutions and countries
(ERAC, 2015). The potential of innovation procurement to improve
public services has not yet been realized (EC, 2013), and little is
known regarding differences in practices.
A critical component of consultation in innovation procurement is
knowledge sourcing: drawing upon the “expertise, experience, advice,
and opinions” of others to “supplement” (Gray & Meister, 2006,
p.142) the expertise of a public purchaser such as on technology or
market trends and supplier capability (EC, 2005, p. 27). Examples of
knowledge that can be gathered in procurement consultation are
market information from potential suppliers, requests from users,
learnings or tools from other procurers, and special advice from
experts. Knowledge sourcing is an example of an instrument “to
embed innovation procurement” in organizations, which can increase
awareness of organizational innovation potential, strategy, and
procurer skill (Georghiou, Edler, Uyarra, & Yeow, 2014). The
organizational learning resulting from knowledge sourcing activities
supports professionalization of public procurement, where better
knowledge on behalf of procuring agencies increases efficiency (EC,
2014, p. 88). Knowledge sourcing can also affect product or service
and market evolution when information shared is embedded into
tenders that drive innovation. As such, gathering information through
consultation supports a number of innovation procurement
measures, including tender openness, more innovative demands, and
procurer capability (Uyarra et al., 2014). Wider demand-side influence
of public procurement, such as market signaling (Rolfstam, 2014),
FROM WHENCE THE KNOWLEDGE CAME 465
can also be leveraged through enhanced market dialogue coinciding
with consultation activities. Given this, there exists ample opportunity
for a better understanding of knowledge sourcing within procurement
to support innovation procurement.
Taxonomies can provide a platform from which to study these
consultations in innovation procurement with respect to interactions
at the 1) organizational and 2) product or service and market level1
(Aschhoff & Sofka, 2009; Edquist & Hommen, 2000; Hommen &
Rolfstam, 2009). Hommen and Rolfstam (2009) refer to these
classifications as “learning” and “evolution”, respectively. However,
these concepts have not been tested using empirical data at the
European level (i.e., beyond case studies and national surveys), and
their applicability is limited in the face of novel policy distinctions
between certain innovation procurement mechanisms. Most notably,
Hommen and Rolfstam (2009) provide a taxonomy relevant to
discussions of consultation, including “modes of interaction.” With
the exception of Edquist and Zabala-Iturriagagoitia (2015), no
academic efforts have differentiated between emerging concepts of
public procurement of innovation (PPI), pre-commercial procurement
(PCP), and innovation partnerships, which are distinct in terms of
learning and evolution. As such, there is a need for empirical study of
consultation practices in innovation procurement processes to test
and improve taxonomies.
In addressing this research gap, this paper presents the first
European-wide, survey-based analysis of the extent to which different
innovation procurement mechanisms are practiced according to
knowledge sourcing activities at the agency level. To uncover the
prominence of these practices, this paper tests innovation
procurement taxonomies by conducting a cluster analysis at the
organizational level. Cluster analyses can be used as a tool to classify
organizations into groups according to degrees of similarity across
variables. Here, cluster analysis identifies heterogeneity across
knowledge sourcing practices (consultation of potential suppliers,
users, other procurers, and experts), procurement areas (purchasing
innovations or R&D services), and organizational characteristics of
public agencies. Clusters are validated using tender innovation
outcomes (service innovation or reduced service costs), national
policy frameworks, and countries.
466 RAINVILLE
The findings identify three distinct types of public agency with
respect to different knowledge sourcing in innovation procurement:
Large collaborative organizations practicing public procurement of
innovation (31%), supplier-focused pre-commercial procurers (20%),
and direct procurers at the municipal level (49%). Validation supports
this heterogeneity, using innovation outcomes and policy drivers. At
the country level, Spain and the United Kingdom, Italy, and Germany
and Poland are most represented in respective clusters. The new
directive is predicted to impact these three types of agencies and
their innovation differently, often stimulating interactions between
them.
LITERATURE REVIEW
Taxonomies can be used as identification schemes to identify
heterogeneity within groups. Applied to the study of innovations and
institutions, taxonomies have been used successfully to support
studies of technological regimes (Nelson, 1977) as a reflection of
technical competency (Pavitt, 1984), and for mapping rates, sources,
and types of innovation within organizations (de Jong & Marsili,
2006). However, in comparison with private sector innovation, public
sector innovation has received little analysis, both generally and
regarding classifications. While similarities with private functions
exist, such as cost reduction drivers, differences like profit seeking
versus policy or socioeconomic growth means that innovation
taxonomies for public institutions cannot readily draw parallels with
literature on the private sector. In terms of innovation capacities,
separation of innovation within the two spheres have evolved from
the organizational theory period of the 1960’s to the turn of the
century, during which time the two were viewed similarly (Kattel et al.,
2014). With respect to impacts of public procurement on markets,
however, the European Commission Expert Group on Public Sector
Innovation still deems the public sector as a “Schumpeterian
Innovator” (EC, 2013, p. 12) for its creation of new (and temporary)
markets for private sector innovation. This latter perspective is
reflected in studies of innovation procurement amongst demand-side
measures and its interactions with markets. For example, Edler
(2013) situates public procurement within a typology of such
measures as having the most direct connection to market
stimulation, and Aschhoff and Sofka (2009) find it to be equally as
influential as university knowledge spillovers. While market impact is
FROM WHENCE THE KNOWLEDGE CAME 467
indeed an effect of successful innovation procurement, better
understanding knowledge sourcing within procurement processes
requires a focus on procurer practices.
Innovation procurement taxonomies capture features of public
purchases according to organizational learning and product or service
and market evolution. The concept of learning is marked by
“interactive learning” in non-anonymous market interactions
(Lundvall, 1992, pp. 8-10). Public intervention is necessary for
stimulating innovation in cases of perfect market competition
(Edquist & Hommen, 2000), as is typical of innovation procurement,
where knowledge and information additional to price and quantities is
gathered (Edquist & Hommen, 1999). Viewing innovation
procurement as that which introduces novelty to the purchasing
organization, Edler and Yeow (2016) focus on the enhancement of
organizational capabilities of public procurers including the abilities
to establish linkages between internal and external actors “in the
process of defining needs, exploring solutions, conducting the
procurement and adopting and using innovations” (p. 415). It is this
view which underpins the use of innovation procurement in this paper
to capture a new method or process in procurement by public
agencies. Whether this novelty results in an innovation, and whether
this innovation is introduced to the public buyer, depends in part on
the modality of the procurement.
Three modalities characterize innovation procurement,
distinguished first by evolution: public procurement of innovation
(PPI), pre-commercial procurement (PCP), and innovation
partnerships. Public procurement of innovation is a demand-side
measure which seeks to modify the rate and/or direction of
technological change (i.e., innovation) (Dalpé, 1994; Edquist &
Hommen, 2000; Geroski, 1990) through public intervention. In this
modality, purchasers select criteria for innovations that require at
least some degree of novelty in this paper, underpinned by trends
to more broadly conceptualize innovation, PPI is not limited to
technological change. At earlier stages in product or service life cycles
and ceasing prior to commercialization PCP creates demand for
R&D services that may bring ideas as far as the prototyping and field
testing stage (Edquist & Zabala-Iturriagagoitia, 2012; Izsak & Edler,
2011; Rigby et al., 2012). Pre-commercial procurement is often
required for procurement of radical innovations (Tsipouri, Edler,
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Rolfstam, & Uyarra, 2010), although separate from PPI in that it does
not necessarily entail any product development past a prototype
(Edquist & Zabala-Iturriagagoitia, 2012). In an innovation partnership,
a buyer works together with a single supplier over a multi-year period
toward the purchase of a product or service at the point of
commercialization (Georghiou et al., 2014).
A number of classifications further differentiate these innovation
procurement modalities. Regarding the degree of technological
change induced by a procurement, Edquist and Hommen (2000)
define developmental and adaptive procurement, where the former is
new to the world and the latter is only new to a country, requiring only
small modifications to fit local conditions. This terminology will not be
applied here, however, as while they are attractive concepts they are
incompatible with the modern procurement modalities outlined in the
previous paragraph. In a more process-oriented definition, Edler and
Yeow (2016) distinguish between innovation procurements where
tendering triggers development of a new innovation (e.g.,
PCP/innovation partnerships), and those where the tendering
responds to some innovation already in the market (e.g., PPI).
Other classifications are based on who is the end user. In direct
procurement, purchases are intended to directly meet the needs of
the procuring agency, whereas in catalytic procurement another end-
user is intended and the purchase more directly stimulates markets
(Edquist & Hommen, 2000). Building upon these elements in terms
of learning structures and contexts, demand structure, and needs
addressed, Hommen and Rolfstam (2009) introduce cooperative
procurement, where public agencies work together with other public
agencies toward common goals. Further classifications specific to
knowledge sourcing (learning) and innovation (evolution) within each
of these are given.
DATA
Data for public procuring organizations across Europe were
obtained from Innobarometer 2010 (Gallup, 2011). The survey was
conducted jointly by UNU-MERIT, the European Commission and
Gallup Europe. The Innobarometer 2010 provides the most
comprehensive international dataset available to date that includes
details regarding public procurement, and has been used for analyses
published in highly reputed journals (e.g., Arundel, Casali, &
FROM WHENCE THE KNOWLEDGE CAME 469
Hollanders, 2015). While dedicated datasets on public procurement
allow for better tailoring of questions, these are either national-level
(e.g., Uyarra et al, 2014) or case studies (e.g., Edler and Yeow, 2016).
The Innobarometer 2010 provides a cross-section of public
procurement and associated innovation to gain insight into activities
across and within European countries.
Covering a three-year period, 4,063 public agencies were
interviewed for the Innobarometer 2010 to measure innovation
strategies at the level of their organization from 2008-2010 inclusive,
obtaining 3699 valid responses.2 A random sample of 27 EU Member
States, Switzerland, and Norway was selected from organizations at
each country level. The number of responses obtained from each
country was partially influenced by country size and the number of
institutions available through the sampling bodies. Organizations
served local, regional, and national geographic areas, and ranged
from 10 employees to over a thousand. Interviews were conducted
via telephone, and respondents were general managers or strategic
directors, answering for their immediate institutions (Gallup, 2011).
To conduct the analysis in this paper, a number of steps were
taken to gather a valid sample from the total responses. First, to
better focus on public agencies in this paper, not-for-profit or private
sector organizations were removed from the sample, leaving
respondents representing either a government organization, or one
owned by the government. Next, responses with missing information
or no response to questions associated with any of the fourteen focus
variables (presented in Table 1, below) were removed. These
variables were selected from the survey based on literature for use in
clustering based on knowledge sourcing, tendering areas, and
organizational information. This left a sample consisting only of public
agencies who procured goods or services from private businesses
between 2008-2010, in areas of ICT, technologies, service
consulting, and R&D, as these were the organizations whom were
further questioned regarding consultation practices. A dummy
variable to test for the presence of a domestic innovation policy
framework was introduced from a list of updated innovation
procurement initiatives around Europe (EC, 2015), as further detailed
in the later discussion on variables used for validation.
One notable limitation of the dataset is the comparability between
countries. This is due to the small representation of countries in
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certain subgroups, as well as country-specific factors such as the
degree of public agency autonomy (Gallup, 2011). Due to these
attributes, the results are not suitable for comparisons between
countries, but rather “across broad institutional segments” (Gallup,
2011, p. 7). For this reason, while a number of countries are used in
validating the model presented in this paper, these are not used for
TABLE 1
Variables of Knowledge Sourcing, Tendering Area, and Organizational
Information Used to Develop the Clusters
Variable
Description
Interpretation
Knowledge sourcing
devl_indep
Process/organization innovations
developed independently
Yes=1; No=0
devl_supp
Process/organization innovations
developed in collaboration with
private business
Yes=1; No=0
Info_supp
Importance of information from
enterprises (as suppliers) in
developing innovations
- Dummy variable created by
combining categories of “somewhat
important” with “very important”
Somewhat /Very
important=1
Not important=0
consul_supp
Consult potential
suppliers/contractors before
tendering
Yes=1; No=0
consul_user
Consult service users before
tendering
Yes=1; No=0
consul_gov
Consult other organizations
conducting similar procurements
Yes=1; No=0
inno_imp
Innovation is at least as important as
cost for an applicant to be successful
in winning a tender from their
organization.
- Dummy variable created by
combining categories of “innovation
is more important than cost” with
“innovation and cost are equally
important”
Innovation>=
cost=1
Cost>innovation
=0
FROM WHENCE THE KNOWLEDGE CAME 471
TABLE 1 (Continued)
cluster development, and weightings across clusters are only
compared within countries rather than across countries. A second
limitation is that, while information on the sectors in which these
public entities were purchasing would have provided greater insight,
the ability for respondents to choose up to three sectors of operation
made doing so impossible. Instead, the area in which they tender
provides some insight into their areas of operation.
Clustering Variables
Building upon the literature on taxonomies of innovation
procurers, fourteen variables were selected to test for clusters within
the data. The following explains these variables and contextualizes
them in relevant literature.
Variable
Description
Interpretation
Tendering areas (goods or services)
tender_ict
ICT equipment/ systems
Yes=1; No=0
tender_tech
Other types of technology
Yes=1; No=0
tender_serv
Provide one or more user services
Yes=1; No=0
tender_servi
nno
Consulting to
recommend/design/pilot test service
innovations
Yes=1; No=0
tender_rd
R&D for new technologies and
services
Yes=1; No=0
Organizational information
org_empl
Employee number
- Dummy variable created by
combining categories of 10-49, 50-
99, 100-249, 250-400 to make one
category, and 500-999 with 1000 or
more to make the other category
>=500=1
10-499=0
org_geo
Geographic area served by
organization
- Dummy variable created by
combining regional and national
Regional/
National=1
Local=0
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Knowledge Sourcing
Knowledge sourcing variables measured consultation in terms of
collaboration, information sourcing, consultation practices, and
innovative criteria among public agencies. These were chosen to
identify the learning activities of public agencies in their purchasing.
Knowledge sourcing activities fall under interactive learning, as a
mode of interaction that builds social capital (Hommen & Rolfstam,
2009). In innovation procurement, public sector organizations face
difficulties in connecting the right actors with complementary skills
and interests at an intra and interorganizational level (Edler & Yeow,
2016, p. 415), reflecting upon knowledge sourcing capabilities.
Collaboration
Collaboration is a public sector strategy which supports public
sector innovation (Arundel, Casali, & Hollanders, 2015), where
interfaces between public organizations and external actors in
innovation procurement “shape the innovation process” (Bloch,
2011, p. 18). Institutional proximity is a common theme in public
agency collaboration. Both knowledge flows between actors in
innovation procurement and capacities for collaboration (Huxham &
Vangen, 2005) are facilitated by common institutional environments
(Hommen & Rolfstam, 2009). Greater “institutional closeness” (EC,
2012, p. 37) between public agencies and others helps “maximise
learning and often minimise risks” (Bason, 2010, p. 240).
However, while “the majority” of ideas from the public sector are
externally sourced, most of the ideas generated in this manner are
not often turned into innovations, as found by Hughes, Moore, and
Kataria (2011). This supports the definition of innovation
procurement used here, where innovation outcomes are not
mandatory but possible, such as in the modality of PPI. The variable
devl_supp measured external orientation as collaboration of public
agencies with private businesses in developing process or
organizational innovations, supported by the importance of supplier
information (info_supp). Literature on supplier consultation is
presented in the following section. In contrast, devl_indep measured
the internal orientation and independence of public agencies in
developing such innovations. Extensive internal collaboration can
help to identify solutions (Corbin, Corwin, & Mittelmark, 2012), with
FROM WHENCE THE KNOWLEDGE CAME 473
innovation success influenced by internal diffusion methods (Hughes,
Moore, & Kataria, 2011).
Consultation Practices
Regarding knowledge sourcing in the development of tenders
specifically, variables tested for the prominence of consultation as a
common practice with potential suppliers (consul_supp), service
users (consul_user), and other government organizations
(consul_gov). Consultation of other organizations offering special
advice (consul_spec) was used as a validation variable, and is
discussed in the corresponding section. The relevant question in the
survey was phrased as whether respondents “usually consulted”
each particular party prior to tendering (Gallup, 2011, p. 195), which
is interpreted here as meaning that, in most instances and as a
common practice, procuring organizations sought information from
the specified source.
Potential Suppliers
Sharing information with potential suppliers particularly at early
stages of procuring a radical innovation (such as in the modality of
PCP) is a form of market signaling that enables planning of capacity
and “innovation investment to react to public sector needs” (Tsipouri
et al., 2010, p. 41). Currently, suppliers identify a lack of opportunity
to present unsolicited ideas as an area for concern (Uyarra et al.,
2014), underscoring communication barriers between suppliers and
purchasers. Improving the efficiency and use of procurement
consultation through dialogue with potential suppliers has been an
issue of recent national focus, such as in the UK in improving the
design and delivery of procurement processes (HM Treasury, 2013).
For suppliers, procurement market consultation is increasingly
preferred to competitive dialogues once tenders are open (Uyarra et
al., 2014) where the process is becoming more efficient (HM
Treasury, 2013). In France, procurers have begun networking with
potential suppliers at events since 2014 to connect with high-
potential industry partners and to better find SMEs (ERAC, 2015). As
well, the type of innovation procurement in general should influence
the sourcing of information. For purchasing new technologies, for
example, intensified dialogue between the public sector and firms
active in R&D is widely perceived to influence public sector innovation
(Wegweiser et al., 2009).
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Consultation and collaboration are a prerequisite for public-
private innovation partnerships, which can be used under the new
directive instead of multi-stage tendering with multiple companies in
PCP. Public-private partnerships in procurement are a form of
cooperation under the New Public Management paradigm (Essig,
2005), where government works more closely external organizations
(Walker & Preiss, 2008). In an innovation partnership, which
specifically refers to partnership with a private firm, a buyer works
together with a single supplier over a multi-year period to purchase
the product or service at the point of commercialization (Georghiou et
al., 2014). In the new procurement directive, procurers are advised to
establish innovation partnerships with companies through
procurement mechanisms, particularly for long-term activities in
developing new products or services (EC, 2014). Such public-private
innovation partnerships are “extremely important” for identifying
innovations for significant cost-savings and “improved service quality
and accessibility” (EC, 2012, p. 59). Examining partnerships in smart
city initiatives, EC (2012) found them to be more common in “either
federal or highly decentralized institutional settings” (p. 44) of the UK,
Germany, Netherlands, Italy, and Spain.
Service Users
Users are a driving force in public sector innovation (Bloch,
2011), and user-supplier interaction and co-production are
mechanisms by which procurement helps to induce or diffuse
innovations (Edler, 2013). In innovation procurement literature
focusing on communication with the supply side, the procurer is seen
as the user (Edler & Yeow, 2016, p. 418). However, particularly when
public procurement is seen as first a mechanism to serve the public
rather than to stimulate innovation (Edler & Yeow, 2016; Edquist &
Hommen, 2000), it is not sufficient to only examine suppliers as a
source of knowledge. In examining innovation procurement, users
should be clearly distinguished from suppliers, and much about their
role in driving public sector innovation remains unknown (Bloch,
2011). Extending evaluation to include users of public services
requires recognition of internal processes at public institutions. From
the perspective of the public agency, Bloch (2011) identifies potential
users as enterprises, other public organizations (with the exception of
universities and public research institutions) and citizens (p.18).
Importantly, even within public organizations, public purchasers and
FROM WHENCE THE KNOWLEDGE CAME 475
public users rarely would be the same entities especially at
agencies serving a larger geographic area, where internal
departments exist for buying to concentrate expertise, tasks, and
often demand.
The dataset used in this analysis captures this important
difference, by including purchaser consultation with service users.
Public purchasers consulting with service users in procurement
discussions act as critical connections between users and producers,
accumulating knowledge on both market potential and user needs.
Given this, literature to user-producer interaction in innovation
procurement can still be applied with clarifications, based on
theoretical agreement that user-producer interactions support
innovation through learning (Von Hippel, 1988).
In catalytic procurement, the end-user is a third-party (i.e., not the
public agency who conducted the purchase) and the government
buys a product or service to stimulate a (new) market in a desired
way (Edler, 2013; Hommen & Rolfstam, 2009). In procuring for R&D
services through the modality of PCP, user consultation is critical at
such early stages of innovation. Such market intervention is deemed
by Hommen and Rolfstam (2009) as “user-led innovation” (p. 30),
where the user is referred to as the purchaser. Associations with
solely suppliers during procurement in PCP would help to direct R&D
toward meeting what the market identifies as user needs, without
consulting users directly. Particularly in such a purchase, the
potential for lack of uptake of procured innovations presents societal
risk, challenging the core goal of innovation procurement. A dialogue
process with potential users “helps improve the acceptability of the
marketplace and thus reduce market risks” (Tsipouri et al., 2010, pp.
41-42), whether it be users of new applications, private lead users.
User satisfaction (not limited to the purchasing agency) is a common
objective in Nordic procuring institutions (Bloch, 2011), such as
Denmark, which promotes market dialogue and identification of user
needs in innovation procurement (ERAC, 2015).
Other Innovation Procurers
The variable measuring consultation of other organizations
conducting similar procurement before tendering complemented
other consultation mechanisms. In certain types of procurement,
such as cooperative procurement, collaboration is mandatory as
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procurers work with other public entities to organize the purchase
and specify needs together (Hommen & Rolfstam, 2009). In this
paper, cooperative procurement includes when multiple agencies are
contracting authorities, as well as “joint” procurement (ERAC, 2015),
where multiple agencies have control over provider decision-making
and objectives. Cooperative procurement indicates organizational
innovation practices, as found by Bloch (2011) in the external
cooperation of public administration institutes in Nordic countries.
However, Member States lack coordination and cooperation across
Europe, despite this being a prerequisite for innovation procurement
(ERAC, 2015). To support this collaboration, governments across
Europe are beginning to stimulate connections between procurers.
For example, there is a growing number of examples of cooperative
procurements and those involving networks for consultation, with
European backing like by EAFIP (European Assistance for Innovation
Procurement).
Cooperative procurement concentrates demand, which can
enable the purchase of more innovative products at a lower price.
Knowledge sharing is an important element in achieving these
benefits, which can be accomplished with or without internal
restructuring. In the Netherlands, category managers assigned to
each purchasing sector are tasked with external consultation and
communicating knowledge gained to purchasing agencies. In
contrast, without establishing a new entity, Austria has developed a
clear governance structure across its three ministries cooperating in
PCP and PPI to share knowledge, knowhow, and experience between
purchasers (EC, 2015). Regardless of the structure, collaborations
remain a prerequisite for innovative public finance such as
networking grants (Baliey et al., 2010) that can help remove financial
barriers to innovation procurement. However, the efficiency of
cooperative procurement initiatives is not guaranteed: Metze and
Levelt (2012) identified cooperative procurement across Dutch
municipalities, finding that best interests or innovation expectations
were not always met with by parties.
Importance of Innovation
The variable inno_imp indicates whether innovation was at least
as important as cost for a supplier to win a tender from a public
agency. The question is interpreted here as referring to the
FROM WHENCE THE KNOWLEDGE CAME 477
innovativeness of a potential supplier and/or the presence of
innovative criteria in a tender. Importantly, the results of knowledge
sourcing in innovation procurement should be codified in tenders,
with public agencies recognizing and selecting for product or service
characteristics with novelty in mind. Supporting tender openness
(Wegweiser et al., 2009), innovative criteria can be placed either in
calls for tenders (as technical specifications/requirements, also
referred to as selection criteria) or award criteria (Nissinen, Parikka-
Alhola, & Rita, 2009). Notably, it is assumed that respondents did not
just consider innovation in award criteria, but more broadly in
innovative calls for tenders. This decision is supported by Nissinen,
Parikka-Alhola, and Rita (2009), who found that a number of
requirements set in award criteria, such as specific environmental
management measures and policies, are in reality selection (knock-
out) criteria that should be presented in the tender body.
Tendering Area to Private Suppliers (Goods or Services)
As they reflect upon learning and evolution, examining tendering
areas provided insight into which innovation procurement modality
respondents undertook. Variables were included for whether
agencies purchased particular goods or services in the last three
years. These are for ICT equipment/ systems (tender_ict), other types
of technology (tender_tech), and providing one or more user services
(tender_serv), and consulting to recommend/design/pilot test service
innovations (tender_servinno). Tender_tech captured whether
respondents tendered technologies that they considered primarily
related to neither ICT nor those which improved environmental or
energy performance. These variables are analogous to those used by
Bloch (2011) in a survey of innovative procurement practices in the
Nordic countries. As they all refer to the purchase of an innovation,
they are indicative of the practice of PPI. Another variable introduced
for tendering area was for the conduct of R&D for new technologies
and services (tender_rd). This is analogous to PCP, as the
procurement of R&D services, and differentiated from PPI as no
innovation is necessarily purchased. If the survey data was for a time
period where the new directive applied, this variable might also
reflect developmental stages within innovation partnerships. Such an
interpretation would be akin to Bloch’s (2011) “public private
partnerships” question as an indicator of innovation procurement.
However, as the mechanism was not included in the previous
478 RAINVILLE
directive (Georghiou et al., 2014), the data in this paper is not
interpreted with respect to innovation procurement practices.
Organizational Information
Organizations at similar hierarchical levels may conduct
innovation procurement similarly due to similar institutional drivers.
As well, organizations with more staff may be those better equipped
to conduct enhanced knowledge sourcing activities coinciding with
innovative procurement. To find commonalities regarding
organizational characteristics of the sample, variables for number of
employees (org_empl) and the geographic area served by the
organization (org_geo) are used here.
A number of findings have supported relationships between these
factors and the degree of innovation in public sectors, although not
with respect to innovation procurement. Institutional structure
influences the actions of public sector innovators (EC, 2012).
According to Arundel, Casali, and Hollanders (2015), the likelihood of
service innovation increases with the size of the public institution,
where smaller organizations have less external information sourcing
compared with larger organizations. Other findings corroborate this,
such as Gow (2014), who found larger Canadian institutions were
more innovative in terms of adopting novel processes or
organizations. With respect to applying the results of procurements,
Bloch (2011) found central (i.e., national) government to use their ICT
procurements more often to promote innovation in suppliers.
Variables Used for Validation
A number of additional variables were used to validate the cluster
analysis. These are displayed in Table 2 and described in greater
detail in the following sections.
Consultation Practices: Special Advice
As access to skills is a critical enabling factor of public sector
innovation (Hughes, Moore, & Kataria, 2011), consulting external
organizations for special advice may be more highly associated with
innovation procurement. For example, special skills can help risk
adverse organizations begin innovation procurement in the face of
FROM WHENCE THE KNOWLEDGE CAME 479
TABLE 2
Variables for Special Advice Consultation, Tender Innovation
Outcomes, and Country Criteria Used to Test the Clusters
complex criteria decisions (EC, 2013). The variable consul_spec
captures whether procuring agencies usually consulted external
organizations that offered special advice in this manner.
Tender Innovation Outcomes
Innovation outcomes from tenders measured whether at least
one tender during the 3-year timeframe of the study resulted in
service innovation (a new or significantly improved service provided
by or for your organization) (outcome_inno) or reduced costs of
service provision (outcome_cost). Whether public purchasers offer
entrance to lead markets, or act as experimental or lead users, the
use of innovations is necessary for their diffusion (Edler, 2013). If
public bodies adopt procured innovations themselves, they act as a
first user and help establish demand in new markets, while benefiting
in their own cost reductions or improved services. Acting as an early
user of procured innovations can support the diffusion of cost-
effective technology and services, supporting product improvement
and speeding up cost reductions (Aschhoff & Sofka, 2009). Also
Description
Interpretation
Consult other organizations
offering special advice prior to
tendering
Yes=1; No=0
Tender resulted in service
innovation
Yes=1; No=0
Tender resulted in reduced
service provision costs
Yes=1; No=0
Whether country has developed
frameworks for innovation
procurement
Yes=1; No=0
Whether country is Finland,
Denmark, Sweden, or Norway
Yes=1; No=0
27 EU Member States,
Switzerland, and Norway one
dummy variable per country
used
Yes=1; No=0
480 RAINVILLE
associated with increasing service quality and cost-effectiveness,
tendering for one or more user services indicates outsourcing (EC,
2012) and a better focus on core government mandates. The
presence of positive innovation outcomes from tendering is
interpreted as indicating PPI and direct innovation procurement,
where the purchasing entity implements its purchase. Innovation
partnerships may also be practiced, although due to its long timelines
and multiple phases, this can be concluded with less certainty. In line
with innovation procurement goals of societal assistance defined by
Edler (2016) and Edquist and Zabala-Iturriagagoitia (2012), service
improvement from tendering supports “improved responsivenessto
clients or citizens of public institutions a critical metric for
measuring public sector innovation outcomes (EC, 2012).
Not all tenders from an innovation procurement must result in an
innovation, which is complicated by frequent confusion of PCP, PPI,
and innovation partnerships (Edquist & Zabala-Iturriagagoitia, 2015).
When tenders do not result in innovations benefiting the public
agency, modalities of PCP may be practiced instead. Pre-commercial
procurement is more likely to be based on longer-term and
explorative contracts (EC, 2012), such that it is not inevitable that
these contracts result in innovations. The European Commission
stresses that PCP activities are necessarily for R&D services and
must terminate prior to uptake or commercialization, and therefore
exclude activities such as “integration, customization, incremental
adaptation and improvements to existing products or processes” (EC,
2007, pp. 2-3). As such, public organizations are not allowed to
purchase innovative solutions that have been developed through PCP
mechanisms, as this would be covering the costs of
commercialization, in contrast to innovation partnerships where doing
so is permitted. As well, if the purchase is catalytic, the government is
not the end user and thus would not implement any innovations that
were purchased. Similarly, the implementation of a purchased
innovation through cooperative purchasing with other public agencies
is not guaranteed.
Introducing innovations to public agencies is associated with
learning and evolution. Regarding the former, the extent of internal
change required for a public organization to adopt a tendered
innovation was found by Edler and Yeow (2016) to influence learning
and adaptation costs, as well as intermediation needs. With respect
FROM WHENCE THE KNOWLEDGE CAME 481
to evolution, Bedin, Decarolis, and Iossa (2014) found that many
public R&D initiatives did not require significant effort, and also
resulted in organizational innovations and “incremental applied
research” (p. 12), such that innovation outcomes from innovation
procurement may be quite high. However, Hughes, Moore, and
Kataria (2011) identified the quality of ICT infrastructure as a critical
organizational enabler of innovation, such that improving
infrastructure through the purchase of ICT should be associated with
positive outcomes at the public agency level.
Policy Drivers
The policy environment of the public agency was measured by
testing whether respondents belonged to a country which had
developed frameworks for innovation procurement or not
(count_inno). In developing this variable, countries who have ongoing
or completed PCP projects (the rightmost section in Figure 1) were
said to be “innovative”, as they have moved through the stages from
exploration, to framework development, to identification and pilot
preparation (EC, 2015). This was used as an indicator of whether the
countries conducted PPI as well i.e., not procuring R&D services but
purchasing a new innovative product or service. As the dataset
surveys organizations from 2008-2010, those who are innovative in
2014 would have been in earlier stages of developing policies for this
in prior years, and those who in 2014 had not yet begun projects
would have been farther behind given the longer timelines for PCP
compared with PPI. While remembering that PCP is not the same as
the PPI, this was the best approximator for a policy environment
conducive to innovation procurement given the lack of
comprehensive study in this area. Although the vast majority (94%) of
OECD countries policies or strategies to support innovative goods and
services, green public procurement, or small and medium-sized
enterprises (OECD, 2015), there is currently no data on specifically
innovative procurement among European countries. The 2014
procurement directive must be translated by Member States into
national law by January 2016, when national legislation will vary
across countries dependent upon domestic institutions (Rolfstam,
2014).
482 RAINVILLE
FIGURE 1
Implementation of Pre-Commercial Procurement Projects across
Europe
Source: EC (2015).
Edquist and Hommen (2000) differentiate between direct and
indirect policies for innovation procurement. The latter sets
framework conditions and institutional contexts (such as the EU
Procurement Directive), which is recognized by all Member States in
the sample. In contrast, direct policies directly intervene in active
technology development (Edquist et al., 1998). Both of these policies
must be aligned at national levels in order to both increase domestic
capacities while meeting social needs (Edquist & Hommen, 2000), as
key features of innovation procurement (Edler & Yeow, 2016). The
presence or absence of a national framework for innovation
procurement tests for such policy alignment. National frameworks
uphold “innovation networks” and “knowledge generation” by public
entities (Edquist & Hommen, 2000, p. 3). These concepts are being
recognized in practice: The European Research Area and Innovation
Committee (ERAC) recently recognized the need for countries across
Europe to “create a strategic framework for innovation procurement”
(ERAC, 2015).
For innovation procurement, policy motivation is a top-down
innovation method (EC, 2012). Innovation at the organizational level
is often driven by policy (Petkovšek & Cankar, 2013, p. 1331).
Arundel, Casali, and Hollanders (2015) found new laws and
regulations to be the most important driver of innovation in the public
sector, while Hughes, Moore, and Kataria (2011) found organizations
with innovation strategies to have better innovation measures.
FROM WHENCE THE KNOWLEDGE CAME 483
However, only recently have “dedicated innovation policy
approaches” been targeting demand-side measures (Edler, 2013, p.
5). Policies prompting innovation in public procurement are an
“example of public sector innovation that combines institutional and
administrative aspects (e.g. how bids are evaluated) and
technological skills and innovations in the private sector” (EC, 2013,
p. 15). These policies go beyond primary policy objectives of public
procurement of efficiency and cost effectiveness (OECD, 2015, p.
138).
Countries
To investigate how the cluster analysis mapped according to
countries given variation in innovation procurement practices
one variable for each of the 27 EU Member States, Switzerland, and
Norway was introduced during validation. As the Nordic countries
have been active in innovation procurement initiatives, including
surveying (Bloch, 2011) and academically (e.g., Edquist & Zabala-
Iturriagagoitia, 2015; Hommen & Rolfstam, 2009), a dummy variable
(countnord) was also introduced to test for whether a public agency
belonged to Finland, Denmark, Sweden, or Norway. Country variables
were weighted by their general population size, as provided by Gallup
(2011).
Focusing on 1505 government organizations, a three-stage
exploratory analysis was undertaken to examine similarities within
subgroups, following the approach of de Jong and Marsili (2006) and
Leiponen (2008). While one drawback of cluster analysis is its
subjectivity across different data sets and theoretical lenses, its
rigour can be enhanced by identifying commonalities between broad
categories and clusters in prior analyses. This is intended through
comparison with taxonomies of innovation procurement.
PRINCIPAL COMPONENT ANALYSIS
First, a principal component analysis (PCA) was performed to
reduce the number of variables to be used in the cluster analysis. Of
eighteen potential variables of interest, four variables were removed
due to a low individual Kaiser-Meyer-Olkin measure of sampling
adequacy score, and later used for validation. With the remaining
variables combined, the KMO score was 0.75, and for each individual
variable was above the minimum required of 0.60 (Table 5,
484 RAINVILLE
Appendix). An extraction technique with varimax rotation was used,
and the latent root criterion required that eigenvalues be greater than
one. The six components with an eigenvalue greater than one
explained a cumulative 42.7% of the variance in the dataset, and a
three-dimensional solution explained 33.4% of variance. There was
no indication of issues from high multicollinearity, with all values
below 0.3634. The determinant for the correlations was 0.3613,
which was greater than the necessary 0.00001 (Arundel, Casali, &
Hollanders, 2015).
Cluster Analysis
Using the clustering variables, the cluster analysis was
performed. While cluster analysis is sensitive to outliers, all variables
had standard deviations much lower than the acceptable limit of
between 2 and 3, according to Hair et al. (1998). When considering
the number of potential clusters, between three and six were
considered to be desirable a priori, with fewer than three offering little
explanatory power and more than six requiring greater literary basis
than is available for explanation. Hierarchical and non-hierarchical
techniques were combined to define centroids for a k-means cluster
analysis based on Ward’s Euclidian distances (de Jong & Marsili,
2006; Punj & Stewart, 1983; Singh, 1990).
For the hierarchical component, and following Singh (1990) until
kappa validation stage, a Ward’s linkage with Euclidian distances
as a continuous dissimilarity measure - was generated. Using this, a
dendrogram was developed for visual inspection of an appropriate
number of clusters to test. Due to the high number of observations,
the dendrogram was limited to the top 15 branches (Figure 3,
Appendix). From here, 2-5 clusters were seen to be feasible. A three-
cluster centroid was then developed using the Ward’s linkage.
For the partitional component, this three-cluster centroid was
used as a starting point in performing a k-means cluster analysis with
three clusters. Focus variables were then displayed according to this
new k-means cluster solution, then kappa was calculated between
the cluster analysis solution and the initial hierarchical solution.
Kappa tests for randomness in agreement, and calculates the chance
correlated coefficient of agreement. This process was repeated for
solutions of 4 and 5 clusters, and the percent agreement compared
between the three solutions. The three-cluster solution had the
FROM WHENCE THE KNOWLEDGE CAME 485
highest agreement at 77.54% and a kappa of .6199 (Table 3),
greater than those for either the 4 or 5 cluster solution (with
agreements of 70.96% and 61.53%, respectively).
TABLE 3
Kappa for 3-cluster solution
Agreement
Expected
Agreement
Kappa
Standard
Error
Z
Prob>Z
77.54%
40.92%
.6199
.0191
32.55
0.0000
DESCRIPTIVE STATISTICS
For a three-cluster solution, Column 5 in Table 4, below, presents
the means for each variable used in the cluster analysis and
validation. On average, more agencies develop innovations
independently (72%) than with suppliers (46%), while more than half
value information from suppliers in developing innovations, and
consult them for developing tenders. In comparison, consulting other
governments conducting similar procurements was more common,
and users least common.
More than three-quarters of agencies believe innovation is at
least as important as cost for a company to win one of their tenders.
Before a dummy variable was constructed for this indicator
(inno_imp), only 21% (N=316) of organizations said cost was more
important than innovation in winning a tender, while 65% (N=983)
saw them as equally important and 14% (N=206) as more important.
A higher proportion, on average, conduct PPI, which varies
according to what is purchased: it is most common in tendering for
ICT (78%) services (68%), and other technology (57%), whereas half
tender for consulting to recommend, design or pilot test new or
improved services. Only one-third of the agencies conduct PCP
(tender_rd), in tendering for R&D for new technologies and services.
As may be expected, this indicates that solutions which are readily
implementable are procured by most, meeting organizational
requirements, followed by those which are near to commercialization
but may provide a more innovative solution tailored to the
organization (indicated by tender_servinno). Tenders for earlier-stage
486 RAINVILLE
R&D, requiring greater risk and potentially longer-term investment,
are expectedly least common.
Regarding organizational characteristics, the majority (78%) of
organizations were at the local level, with fewer at the regional (16%,
N=240) and national (6%, N=92). The latter two categories were
combined such that a total of 331 organizations served regional or
national geographic areas. Employee numbers are also quite low: only
19% (N=287) had more than 500 employees. Before a dummy
variable for employee number was created, the most common size
category was 1-49 employees, at 44% (N=655) of the total sample,
supporting the small geographic area served by the many local
organizations.
Between the validation variables, means did not vary as greatly,
as was expected by their lower KMO scores. Almost three-quarters of
organizations had a tender result in a new service innovation,
whereas more than half had at least one resulting in significantly
reduced costs of providing existing services. Three-quarters were
from countries deemed to have policy frameworks for innovation
procurement.
Due to the aforementioned challenges in comparing between
countries using this dataset (Gallup, 2011), country means were not
compared with each other, but rather within countries across
clusters. The shorter list of countries displayed in Table 4, below, was
chosen due to their higher means and significant variance from the
mean (F-Value); the full list is displayed in the Appendix (Section 8,
Table 6). The most represented countries are Spain (N=232),
Germany (217), and Italy (214). The UK (181), Poland (127) and
France (100) are also more highly represented. With the exception of
the Netherlands (51) and Romania (54), the other countries have
under 50 responses in the sample.
TABLE 4
Cluster Analysis and Validation for a Three-Cluster Solution
Variable
Cluster
Mean
F-Value
1
2
3
N
736
473
296
1505
-
Percent
48.9%
31.4%
19.7%
100%
-
FROM WHENCE THE KNOWLEDGE CAME 487
TABLE 4 (Continued)
Variable
Cluster
Mean
F-Value
1
2
3
Knowledge sourcing
devl_indep
0.65
0.84
0.70
0.72
27.29***
devl_supp
0.25
0.77
0.48
0.46
192.67***
info_supp
0.49
0.76
0.82
0.64
80.71***
consul_supp
0.47
0.81
0.65
0.61
80.21***
consul_user
0.50
0.83
0.32
0.57
125.16***
consul_gov
0.69
0.97
0.20
0.68
364.39***
inno_imp
0.73
0.87
0.81
0.79
17.96***
Tendering area
tender_ict
0.65
0.90
0.90
0.78
74.38***
tender_tech
0.37
0.83
0.67
0.57
154.00***
tender_serv
0.49
0.88
0.86
0.68
156.43***
tender_servinno
0.19
0.83
0.76
0.51
453.90***
tender_rd
0.05
0.54
0.70
0.33
405.26***
Organizational information
org_empl
0.06
0.47
0.07
0.19
212.33***
org_geo
0.14
0.37
0.21
0.22
50.40***
Validation variables
consul_spec
0.53
0.74
0.75
0.64
41.83***
outcome_inno
0.65
0.84
0.71
0.72
25.50***
outcome_cost
0.48
0.70
0.53
0.55
29.88***
count_inno
0.68
0.92
0.82
0.78
50.26***
countnord
0.07
0.11
0.03
0.23
9.18***
ES
0.05
0.30
0.16
0.15
86.03***
UK
0.08
0.23
0.03
0.12
38.55***
DE
0.21
0.11
0.02
0.14
19.40***
NL
0.03
0.06
0.01
0.03
5.13**
IT
0.13
0.05
0.31
0.14
46.70***
FR
0.07
0.04
0.10
0.07
5.04**
SE
0.02
0.03
0.00
0.02
6.63**
PL
0.13
0.02
0.07
0.08
38.19***
RO
0.05
0.01
0.05
0.04
4.61**
EL
0.02
0.02
0.04
0.02
2.84*
BE
0.02
0.01
0.02
0.02
0.48
PT
0.02
0.01
0.06
0.02
10.98***
IE
0.01
0.01
0.01
0.01
0.30
Notes: * A significance level of 10%; ** A significance level of 5%. (<.05);
*** A significance level of 1%. (<.01).
488 RAINVILLE
Cluster Analysis
The results of the cluster analysis are presented in Table 4.
Cluster 2 is discussed first due to the explanatory power derived from
its high scores on most variables. Cluster 3 is discussed next, to focus
on the many similarities with Cluster 2 and then point to significant
divergences. Finally, Cluster 1 is presented, with the lowest
performance in most variables across the clusters.
Cluster 2: Collaborative Innovation Procurers
Public agencies in this cluster have the highest score on almost
all variables compared with the other two clusters. They comprise
31.4% (N=473) of the sample. Almost half of these organizations
have 500 or more employees, making them much larger than the
other two clusters. Their geographic area served also reflects this, as
they are more regional and national than the others. Overall, for
knowledge sourcing for both public procurement and innovation, they
rank highest, with the exception of consulting enterprises (as
suppliers) in developing innovations when compared with Cluster 3.
Their knowledge sourcing is a common practice and sources are
varied. An equal proportion consult potential suppliers and service
users (81% and 83% of organizations, respectively) when developing
calls for tenders. Similarly, they consult private businesses when
developing processes or organizational method innovations (77%),
while at other times relying solely on internal knowledge. This
suggests an external orientation and significant knowledge seeking
practices from multiple sources. Strikingly, nearly all usually consult
other organizations conducting similar procurements, at 97%, in
particularly sharp contrast to those in Cluster 3, as detailed below.
This strongly signifies cooperative procurement.
Most agencies in this cluster procure ICT equipment or systems
(90%), supported by tenders for the provision of user service (88%).
In this profile, they are nearly identical to Cluster 3. However, these in
in Cluster 2 rank much higher in procuring other types of technology.
Notably, across all clusters there are more agencies in Cluster 2 who
are active in consulting to recommend, design, or pilot test service
innovations, and they also have a more purchasing other types of
technologies. In combination with high importance of innovation in
winning tenders, this underscores the modality of PPI.
FROM WHENCE THE KNOWLEDGE CAME 489
Cluster 3: Pre-Commercial Procurers, Supplier-Focused, Outsourcers
In developing innovations, the 19.7% (N=296) of organizations in
Cluster 3 see enterprises (suppliers) as more important than the
other clusters, but relatively fewer contact them in comparison when
developing tenders. They are particularly different from organizations
in Cluster 2 in not consulting service users or especially other
organizations conducting similar procurements, at only 32% and 20%,
respectively. In these, they rank lowest across the three clusters,
which underscores low knowledge souring. This also reinforces the
external orientation of Cluster 2, who outsource service provision but
still contact users, coinciding with PPI. In contrast, in conducting PCP,
user consultation is not important to these agencies. Tendering for
service provision to users was nearly as common as in Cluster 2, at
86% of organizations.
Most organizations procured R&D services for new technologies
or services, ranking them significantly first among the clusters. The
large differences between this and other clusters (at only 54% in
Cluster 2 and 5% in Cluster 1) highlights agencies in Cluster 3 as
focusing heavily on PCP. As they also engage in a certain degree of
tendering in other areas, they also practice a certain degree of PPI.
These organizations have small employee numbers (almost identical
to Cluster 1), but a higher proportion serve regional or national areas
than do those in Cluster 1.
Cluster 1: Direct Procurers
Agencies in Cluster 1, comprising nearly half of the total sample,
rank below those in Clusters 2 and 3 in all variables except consulting
potential suppliers and others conducting similar procurements prior
to tendering. Even though fewer agencies publish tenders across all
tendering areas, a higher proportion consult with service users (50%)
and others conducting similar procurements (69%) prior to tendering.
Only a small proportion consults to recommend, design, or pilot test
new or improved services, and almost none (only 5%) conduct PCP, by
tendering R&D services. They are primarily local governments, with
94% having less than 500 employees.
Validation
A validation analysis was done to test for significant differences
between the identified clusters, following the method of de Jong and
490 RAINVILLE
Marsili (2006) by performing a MANOVA test and then applying to
additional variables not included in the PCA to the clusters. Validation
variables were those excluded due to lower KMO scores, but they
were also predicted to vary across clusters. Identifying significance
between variables used, a MANOVA test for all variables (Pillai’s Trace
is 1.2231, F-value = 86.11 (approximately distributed) and p < 0.001
[Table 4]) indicated a difference between the 32-dimension mean
vectors (32 dependent variables, including short country list) of the
three clusters, allowing for the null hypothesis that the mean vectors
are the same for the three clusters to be rejected. Findings were
confirmed by multivariate regressions for one-way analyses for each
variable (Table 4, Column 7).
F-values are highest for variables differentiating between
cooperative procurement (consul_gov), PPI (including tender_
servinno) and PCP (tender_rd). Also prominent is the F-value for
employee number, whose clear distinction across clusters suggests
that innovation procurement requires significant internal capacity.
Cluster 2
The validation variables mapped across clusters as expected
according to their interpretation. With more tendering and pre-tender
consultation by agencies conducting PPI, Cluster 2 also had more
innovation resulting from its tenders, and three-quarters of its
agencies consult external organizations with special advice. Overall,
their tenders have more innovative outcomes than the other clusters,
and a higher percentage (92%) of their countries have innovation
procurement policies in place to stimulate knowledge sourcing.
Nordic countries were most concentrated here, supported by
Bloch (2011) who identified innovation practices in Nordic countries
through external cooperation, and supplier and user consultation. As
well, there have been more recent cooperative procurement
initiatives specifically between the Nordic countries (EC, 2015). At the
individual country level, Spain and the United Kingdom are most
represented. Both countries are active in conducting cooperative PPI
and PCP in a variety of sectors at the municipal to national level, as
well as with other Member States (EC, 2015). The UK succeeded in
procurement consultation initiatives in leveraging knowledge gained
from supplier dialogue toward more efficient procurement processes
with market influence (HM Treasury, 2013). Spain has now
FROM WHENCE THE KNOWLEDGE CAME 491
embedded PPI and PCP into its research and innovation strategy,
providing spending targets for innovation procurement and cross-
institutional financial incentives (EC, 2015).
Cluster 3
Similar to Cluster 2, three-quarters of agencies in Cluster 3
consulted external organizations with special advice, suggesting its
equal importance in purchasing R&D services and innovations. A PCP
and outsourcing approach is supported in this cluster given fewer
innovation outcomes for the organization from tendering, as well as
lower user consultation (32%) in combination with more tendering for
user service provision (86%). Italy is the most represented country,
where current initiatives still focus predominantly on PCP, as the
country has integrated PCP within its research and innovation
framework and provided designated funds for large projects (EC,
2015).
Cluster 1
For Cluster 1, all validation variables consistently ranked third
across the clusters. As innovation outcomes are on par with the
prominence of tendering for innovations, the purchase of their
innovations may be more effective than either those in Clusters 2 or
3, or at least targeted more toward improvement attributed to the
purchaser’s own institution. This indicates direct procurement
practices. The most represented countries are Germany identified
as an innovation procurement laggard, especially respect to PCP
(Wegweiser et al., 2009) and Poland, with only scarce
contemporary examples of innovation procurement (EC, 2015).
CONCLUSIONS AND POLICY RELEVANCE
From this exploratory analysis, there appears a significant
difference between public agencies practicing modalities of PPI and
PCP in terms of knowledge sourcing, tendering areas, and
organizational characteristics. Comparing findings with taxonomies in
literature, three different types of agency practicing innovation
procurement across Europe are suggested (Figure 2), before
discussing how they may be impacted by changes in the new
directive.
492 RAINVILLE
Larger, national public agencies focusing on PPI (Cluster 2) consult
readily with other procurers with expertise, users, and suppliers to
inform their innovation procurements. They conduct cooperative
procurement, and may have diversified procurement portfolios that
include a smaller number of PCP, with tendered innovations
benefiting from private markets in providing enhanced service
provision at a lower cost. In contrast, regional agencies focusing on
PCP (Cluster 3) do not cooperate with other procurers or consult
users in tendering for R&D services. They strongly value innovation
from suppliers in developing innovations. What new service
innovations are implemented do not reduce service provision costs,
as they are new-to-the market and have yet to reach economies of
scale. Finally, the majority of public agencies are municipal agencies
FIGURE 2
Visual Summary of Results of Cluster Analysis, Validation, and
Interpretation
FROM WHENCE THE KNOWLEDGE CAME 493
conducting direct procurement (Cluster 1), incorporating knowledge
from other procurers and users, and benefiting from cost reductions
by adopting innovations from the market. They lack supplier
consultation and purchase more “off the shelf” goods and services.
These findings both support and challenge changes to
procurement law seen in the updated European Procurement
Directive 2014/24/EU. The Directive sets procedural rules for
contracts over threshold levels which are not exempt. Compared with
the previous Directive 2004/18/EC, it gives agencies more options of
procurement type and design, most notably through cooperative
procurement with other governments, consultation of potential
suppliers in PPI and innovation partnerships, and the tailoring of
award criteria to user needs. Other parts of the directive will influence
what is purchased, such as the requirement for digitalization of public
procurement. The following predicts the effects of changes to the
directive given the three types of agencies identified in this paper.
Increases in the importance of innovation for potential suppliers
to win tenders, and in user consultation to better define needs, are
predicted for all types of agencies based on new recommendations
for award criteria development. Procurers can now use the Most
Economically Advantageous Tender (MEAT) to develop price-quality
ratios, supporting the purchase of high-quality products and services
“optimally suited to their needs” (EC 2014, p. 82). Agencies are
encouraged to “allow variants as often as possible” (EC 2014, p. 72)
due to the importance of innovation. Consulting potential suppliers
regarding information to inform pricing and performance options, or
other government agencies to assist with methods such as life cycle
costing, is also expected.
More cooperative procurement is predicted, particularly between
municipal and regional agencies (Clusters 1 and 3), and central
agencies across member states (Cluster 2). Agencies are exempt
from the new directive if they exercise joint control over a provider
with other authorities or have multiple agencies serving as
contracting authorities (EC 2014, p. 70).3 Municipal and regional
agencies also have the new option to use a simplified tender
publication system, publishing an information notice rather than a
European-wide contract notice (EC 2014, Article 48). As such,
enhanced cooperation between agencies in Clusters 1 and 3 can be
expected, where the user consultation of the former and the stronger
494 RAINVILLE
R&D and innovation focus of the latter may help improve innovation
procurement in these smaller agencies. For national agencies, the
new directive presents clear rules for “cross-border joint public
procurement” to support a European single market and drive
innovation through demand aggregation and risk sharing. While
almost all of the central agencies in Cluster 2 already source
knowledge from other governments, the greater clarity regarding
cross-border cooperative procurement may increase collaborations
between leading countries in innovation procurement such as the UK
and Spain with those with room for improvement in PPI, such as
agencies in Italy and smaller agencies (Cluster 3). However, the
directive provides no direct measures to induce innovation in
municipal and regional agencies, rather providing measures to
increase efficiency such as in utilities provision and the purchase of
“off-the-shelf” goods and services by municipal and regional
agencies. Centralized national coordinating services to promote
innovation in purchasing, as recommended by the European
Research Area and Innovation Committee (ERAC) (ERAC, 2015), may
help to connect larger organizations successful in PPI with these
municipal agencies so that the latter can learn how to efficiently
consult potential suppliers.
Consultation of potential suppliers is expected to increase
particularly along with PPI, given broader grounds and greater
accessibility to apply competitive dialogue and the new competitive
procedure with negotiation (EC 2014, Article 29). These are relevant
for cases requiring innovation, design, or adaptation, and can be
used when agencies are unable to define means of meeting their
needs or assessing market offers, such as in complex projects, and
enables pre-market engagement. Provided that direct procurers such
as in Cluster 1 have the resources and support to engage in these
dialogues, this new addition may increase the innovation
procurement in municipal agencies especially. For slightly larger
agencies such as in Cluster 3, these rules may help them expand
their focus from PCP.
The effects of the new innovation partnership rules are not as
predictable. The process can now be used when no market solutions
exist and when R&D is required to provide a solution to meet an
agency’s needs (EC 2014, Article 31). Suppliers can be one or
multiple parties, who proceed through a multi-stage elimination
FROM WHENCE THE KNOWLEDGE CAME 495
process or with a group purchase at the point of commercialization.
The process applies the directive for the first time to R&D services.
The agency must select all potential partners and define maximum
price and minimum performance at the outset, which must be
adhered to in decisions to purchase the fruits of R&D efforts. Due to
these restrictions, recent commentary such as Bennett (2015) has
questioned whether its impacts will differ from processes using
competitive procedures with negotiation. As highlighted by Corvers,
Apostol, Mair, and Pantilimon (n.d.), the inability to open the
competition to other suppliers once the initiative has begun locks in
chosen supplier(s), and for purchases from national agencies
especially may exclude competition from abroad. These issues may
be exacerbated by the longer timelines and larger contracts
coinciding with the purchasing of R&D services and their innovations.
Given the findings of this paper, innovative national agencies (Cluster
2) and those leading in PCP (Cluster 3) may be those most likely to
pursue innovation partnerships. This modality may be simple to
implement, as Bedin, Decarolis, and Iossa (2014) found that many
PCP initiatives involved only a single supplier without significant R&D
effort. As the innovation partnership applies to direct rather than
catalytic procurement (Corvers et al., n.d.), municipal agencies may
find it an attractive mechanism for purchasing tailored innovations to
meet particular needs rather than cooperative procurement. Whether
they have the resources or capacities necessary to do so remains to
be seen.
Finally, the directive’s requirements for digitalization are expected
to impact tendering in certain areas, most notably through an
increase in tendering for ICT, and subsequently service innovation
and cost-saving results of these tenders. For the first time, all
contracting authorities must implement E-procurement the
electronic notification and submission of offers through a step-wise
processwith the penultimate deadline in 2018. Small municipal
agencies (Cluster 1) may face particular difficulties in achieving the
required digitalization as ICT tendering is more uncommon in
comparison with its ubiquitary presence in Clusters 2 and 3. Once
implemented, such digitalization will lead to service efficiency
improvements, but with initial learning costs likely anticipated in the
multiple deadlines set for Member States. The deadline for national
agencies (like those in Cluster 2) to implement fully digital
communication a full year before municipal and regional agencies is,
496 RAINVILLE
given this evidence, well-founded. As well, the directive simplifies
systems and roles for “off-the-shelf” products and services through
electronic Dynamic Purchasing Systems (EC 2014, p. 76; Article 34),
which frees up resources to support innovation procurement.
In summary, the translation of changes to Directive 2014/24/EU
by Member States may increase agency sourcing of knowledge from
potential suppliers and other governments especially, providing
incentives and greater resources to dedicate to innovation
procurement. Its recognition of diversity across agency types
according to level of government served begins to acknowledge their
heterogeneity, although measures to directly stimulate innovation are
not directed to municipal and regional agencies. The
recommendation of ERAC for the European Commission to establish
a “knowledge-sharing service on innovation procurement” to
encourage “mutual learning” (ERAC, 2015, p. 3) is certainly well-
founded given the findings in this paper. Improving consultation by
public agencies will drive evolutionary aspects of purchases,
improving the tailoring of new products and services to needs. In
conclusion, this paper calls for 1) an updated taxonomy that
encompasses innovation procurement practices, inclusive of new
modalities, and learning and evolutionary characteristics; and 2)
application of this taxonomy to develop dedicated surveys to monitor
innovation procurement practices across Europe.
This research addressed practices of innovative procurement in
public agencies by focusing on their learning and evolutionary
characteristics. Due to the nascency of this research area and the
explorative approach, it did not focus internal dynamics (EC, 2012;
Gow, 2014; Hughes, Moore, & Kataria, 2011) or degree of
institutional autonomy (Arundel, Casali, & Hollanders, 2015). An
improved dataset and indicators dedicated to capturing innovation
procurement practices is crucial to providing a baseline upon which to
monitor the effectiveness of the new procurement directive. A first
step in doing so is to examine new national translations of the
directive across Europe.
NOTES
1. While previously referred to as technological change, terminology
regarding innovation procurement has widened to include
FROM WHENCE THE KNOWLEDGE CAME 497
innovation more generally (Edquist & Zabala-Iturriagagoitia,
2015).
2. The Innobarometer survey measured innovation in public
administration (service innovation), developing innovations
(regulatory, financial drivers; information sources;
intraorganizational dynamics) and effects of innovations
(improved user access to information, improved user satisfaction,
more targeted services, faster service delivery; administration
simplification, working condition improvement, employee
satisfaction, service delivery speed, cost reductions). Other
measures were human resources supporting innovation
(workforce education, development teams, training courses) and
public procurement (consultation, tendering practices in
innovation-related areas, and administrative benefits from
resulting innovations).
3. Agencies are also exempt if the supplier provides at least 80% of
its activities for the contracting authorities.
ACKNOWLEDGEMENTS
Support for this study was received from Climate-KIC’s PhD
program funding, and the German Institute for Standardization (DIN)
through research assistance. An earlier version of this work was
presented at the Druid Academy Conference 2016 in Bordeaux,
France, and at the FG Innovation Economics 2016 Retreat in Berlin,
Germany. The author is grateful for valuable feedback provided by
participants at both of these events, and for reviewer comments that
helped to improve the paper.
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APPENDIX
TABLE 5
Kaiser-Meyer-Olkin measure of sampling adequacy
Variable
kmo
devl_indep
0.7279
devl_supp
0.7891
info_supp
0.7714
consul_supp
0.6966
consul_user
0.6401
consul_gov
0.6296
inno_imp
0.6374
tender_ict
0.7728
tender_tech
0.7971
tender_serv
0.799
tender_servinno
0.7687
tender_rd
0.7282
org_empl
0.7566
org_geo
0.7357
Overall
0.7494
FIGURE 3
Dendrogram for a Cluster Solution Based on Ward’s Linkages,
Truncated to Show Only 15
Groups
050 100 150 200
L2 dissimilarity measure
G1
n=121 G2
n=101 G3
n=144 G4
n=108 G5
n=56 G6
n=169 G7
n=143 G8
n=57 G9
n=91 G10
n=91 G11
n=62 G12
n=116G13
n=40 G14
n=85 G15
n=121
Dendrogram for _clus_1 cluster analysis
504 RAINVILLE
TABLE 6
Countries Applied to Cluster Centroids, Displayed Alphabetically
Country
Code
Country
N
Cluster 1
Cluster 2
Cluster 3
Mean
AT
Austria
21
0.016
0.014
0.007
0.014
BE
Belgium
28
0.019
0.014
0.023
0.018
BG
Bulgaria
15
0.013
0.005
0.008
0.010
CH
Switzerland
26
0.013
0.024
0.016
0.017
CY
Cyprus
3
0.003
0.003
0.000
0.002
CZ
Czechoslovakia
28
0.027
0.003
0.019
0.018
DE
Germany
217
0.211
0.107
0.023
0.141
DK
Denmark
7
0.006
0.005
0.000
0.005
EE
Estonia
5
0.005
0.002
0.002
0.003
EL
Greece
35
0.021
0.015
0.040
0.023
ES
Spain
232
0.053
0.299
0.158
0.151
FI
Finland
23
0.014
0.018
0.011
0.015
FR
France
100
0.070
0.036
0.099
0.065
HU
Hungary
13
0.018
0.000
0.000
0.009
IE
Ireland
15
0.010
0.011
0.007
0.010
IT
Italy
214
0.127
0.049
0.315
0.139
LT
Lithuania
8
0.007
0.002
0.006
0.005
LU
Luxembourg
2
0.002
0.000
0.003
0.001
LV
Latvia
10
0.007
0.007
0.006
0.007
MT
Slovenia
1
0.000
0.001
0.000
0.000
NL
Netherlands
51
0.026
0.057
0.013
0.033
NO
Norway
9
0.005
0.012
0.000
0.006
PL
Poland
127
0.132
0.016
0.066
0.083
PT
Portugal
36
0.017
0.013
0.057
0.024
RO
Romania
54
0.049
0.007
0.046
0.035
SE
Sweden
28
0.016
0.032
0.002
0.018
SI
Slovenia
4
0.004
0.000
0.002
0.002
SK
Slovakia
12
0.010
0.001
0.013
0.008
UK
UK
181
0.081
0.230
0.028
0.117
... These interactions transfer information across institutional boundaries to further learning (Rolfstam, 2012), which in turn is associated with higher project performance (Henderson & Cockburn, 1994). Despite this, such consultation is not common across Europe (Rainville, 2016b). When it does occur, interactions are often through negotiated procedures (Kiiver and Kodym, 2014) rather than more open discussions of sustainability, such as long-term consideration of raw materials or material wastes. ...
... To achieve commitment and willing collaboration by buyers, sustainability incentives must first be bundled with cost-savings. This may be especially true for public agencies, who are typically averse to higher risks posed by more innovative purchasing (Uyarra et al., 2014) and often lacking the knowledge and consultation necessary to design tender calls that meet their needs (Rainville, 2016b). This paper provides evidence that using intermediation can help mitigate these challenges in supporting public demand articulation. ...
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Public procurement can accelerate transitions to a more circular economy by creating new demand for resource efficiency. Interactions during pre-procurement consultations influence the impact of such purchasing by helping define tender specifications. Intermediation throughout these processes can facilitate interactions between participants, assisting in sourcing, generating, and translating knowledge. However, roles for intermediaries and dynamics of intermediation are not fully understood. This paper intends to address how intermediation can promote a more circular economy. It examines a pilot project led by the Dutch Ministry of Defence to incorporate post-consumer recycled content in textiles through extensive consultation activities. Eighteen in-depth interviews were conducted with those directly involved in the pilot, and analyzed using constant comparative analysis. Six intermediaries were identified and found to play a critical role in the process by 1) coordinating government and industry through aligning project goals, 2) facilitating cooperation of industry players to stimulate new business relationships, and 3) collaborating with the buyer to push for higher post-consumer recycled material in the final tender. With respect to public demand articulation, greater insight is needed to discover how to best combine buyers’ motivations for cost savings, sellers’ motivations of increased returns, and the sustainability requirements often imposed by third parties. These dynamics may mark transitions toward circularity as further projects arise, offering a more permanent role for intermediation.
... Extant conceptual frameworks address aspects such as rationales and justifications for public procurement to spur innovation, challenges and potential pitfalls associated with using public procurement as an innovation policy tool (Edler and Georghiou, 2007), innovation impacts of public procurement (Uyarra and Flanagan, 2010) and a taxonomy of public procurement and innovation and their policy implications (Hommen and Rolfstam, 2008). Empirical studies have addressed questions such as suppliers' view of the barriers to innovation through public procurement , the prominence of innovation procurement practices (Rainville, 2016), an illustration of public procurement for innovation (PPfI) (Caloghirou et al., 2016) and the role of networks in promoting small-and medium-sized enterprises (SMEs') innovative performance (Saastamoinen et al., 2018). While existing studies provide useful insights, there is still relatively little empirical evidence, and thus, further empirical studies are required to deepen our understanding of issues around public procurement and innovation. ...
... Public procurement of innovations Following Directive 2014/24/EU, Rainville (2016) identifies three ways through which promotion of innovation through public procurement can occur, namely, pre-commercial procurement, innovation partnerships and public procurement of innovation. Precommercial procurement occurs when public sector organizations procure research and development services, up to the prototype or first test production stages. ...
Article
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Purpose The purpose of this paper is to explore the drivers, enablers, barriers, key success factors, pitfalls and benefits of implementing public procurement of innovations (PPoI) in an organization. Design/methodology/approach The study deployed multiple-case design, whereby six case organizations were selected according to purposeful sampling. Data collection was carried out through in-depth semi-structured one-on-one interviews with key informants. Data analysis involved coding, synthesis, categorization and aggregation. Findings The study revealed that implementation of PPoI represents significant change in an organization, and thus, it identifies key enablers and barriers that organizations must overcome. Furthermore, the study revealed that implementation of PPoI is a necessary but not sufficient condition for reaping its benefits. Moreover, the study identified key success factors for achieving the desirable results and potential pitfalls that organizations should avoid to ensure that the execution phase is not hurt. Social implications Overall, the findings of the study imply that PPoI and the practices associated with it are valuable to the organizations implementing it and society at large. Thus, time and financial investments and the costs associated with the challenges and barriers of implementing it are justified by the resulting wider benefits and outcomes. Originality/value The study contributes by providing useful insights related to implementation of PPoI at an organizational level. Considering that extant literature provides limited insights on this subject, findings of this study should be of interest to researchers, public authorities, procurement practitioners, small- and medium-sized enterprises and other stakeholders. In particular, the study contributes to the body of knowledge on PPoI and offers actionable implications to both practitioners and policymakers.
... These interactions transfer information across institutional boundaries to further learning (Rolfstam, 2012), which in turn is associated with higher project performance (Henderson & Cockburn, 1994). Despite this, such consultation is not common across Europe (Rainville, 2016b). When it does occur, interactions are often through negotiated procedures (Kiiver and Kodym, 2014) rather than more open discussions of sustainability, such as long-term consideration of raw materials or material wastes. ...
... To achieve commitment and willing collaboration by buyers, sustainability incentives must first be bundled with cost-savings. This may be especially true for public agencies, who are typically averse to higher risks posed by more innovative purchasing (Uyarra et al., 2014) and often lacking the knowledge and consultation necessary to design tender calls that meet their needs (Rainville, 2016b). This paper provides evidence that using intermediation can help mitigate these challenges in supporting public demand articulation. ...
... However, uptake of GPP has been low due to "limited established environmental criteria" or their insufficient publication, and uncertainty regarding legality of different methods of incorporating environmental criteria in calls for tenders (EC, 2008a). 1 Despite evidence supporting increases in GPP in the Nordic countries (Nissinen et al., 2009), a comprehensive survey of all Member States shows that the uptake of environmental criteria has occurred gradually and varies greatly between countries (Renda et al., 2012). A lack of innovation through public procurement is also evident e for example, Rainville (2016) found that purchasing across Europe was primarily for "off-the-shelf" products and services, rather than those rewarding or requiring innovation. ...
... Legitimacy is especially important for transnational standards which do not have overarching regulation (Botzem and Dobusch, 2012), reinforced by the importance of GPP in influencing suppliers when there is no requirement for environmental action (Parikka-Alhola, 2008). Consultation with market and technology leaders, other governments, users, and special advisors can also feed into the design of tenders (Rainville, 2016), creating informal standards written into technical specifications and award criteria. ...
Article
Green Public Procurement (GPP) is defined as purchasing which reduces environmental impacts across product or service life cycles. Standardization, as another demand-side measure, complements GPP by shaping standards, which when strategically applied in tenders can drive market demand for environmental products and services and stimulate eco-innovation. However, the uptake of GPP, use of standards, and consideration of innovation in public procurement is limited, and analyses often only consider two of the three. To broaden conceptualizations of innovation in GPP, this paper conducts a review and synthesis of relevant literature to examine roles for standards and standardization in GPP according to innovation life cycle stages, from R&D through to commercialization and diffusion. It develops a conceptual space for product and service innovations according to the purchase of off-the-shelf products or services, incremental adaptations through the public procurement of innovation, and radical innovations using pre-commercial procurement and innovation partnerships. Roles for particular types of standards are examined as inputs to these different mechanisms. Focusing on pre-commercial procurement, standardization is then situated according to distinct stages in the R&D process. Four case studies from literature are applied to support this framework. This paper creates a foundation for integrated understanding of the functions of standards - and applicability of standardization - in demand-side product and process development and market penetration for environmental improvement. Its framework may be used as a conceptual space for public procurers across Europe to better visualize characteristics of products and services when making tender design decisions based on functionality and rewarding performance. Further study should also consider procurer capabilities for sourcing and revealing knowledge to improve procurement outcomes, as ultimately capturing the benefits from GPP hinges upon its ability to be conducted in practice.
... The help of a specialist may be required to provide assistance with (re)evaluation to help ensure a high degree of quality. If the final decision is to reject a project -based on a completed business case that clearly points to the disproportional disadvantages -then it is best practice for the procurer to share these findings with other procurers to support learning regarding the business case methodology and insight into the (economic) barriers to progress in an area of social interest (Rainville, 2016b). ...
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There is a significant potential to improve the benefits from public procurement through a better understanding of drivers in company success at the micro-level, an area that has received little study to date. To increase these impacts on innovation and markets, policy makers have opened procurement to innovation, including the strategic incorporation of formal standards in calls for tenders. Consequently, companies offering innovative solutions should have higher chances to be successful in public tenders. In addition, companies who engage in standardization activities at standards development organizations may have a competitive advantage in submitting tenders. Examining the case of Germany, this paper empirically investigates the effects of German manufacturing companies' innovation activities and their engagement in national standardization on the receipt of contracts within domestic procurement competitions. The results of our empirical analyses based on German companies surveyed within the framework of the Community Innovation Survey show that being successful in product innovation and being engaged in standardization are significant positive predictors of companies' success in public procurement. With implications for policy-makers and practitioners, this shows that public procurement is indeed open for solutions from companies active in innovation and standardization.
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Purpose The purpose of this paper is to give a deeper understanding of public procurement for innovation and civil preparedness. The paper focuses on how the policy goals of innovation and preparedness are implemented in procurement practice, and explores the issues that affect innovation- and preparedness-oriented procurement. Design/methodology/approach The study is exploratory and based on empirical data from semi-structured interviews with 92 informants in the healthcare, energy and water services sectors in Finland. Interview data were analysed using a coding template, and further categorised to answer the research questions. Findings The study brings to light how procurers perceive the different but overlapping policy goals of innovation and preparedness, and whether and how the policy goals are turned into outcomes in the procurement process. Research limitations/implications The data were collected from case sectors in Finland. However, considering the adoption of European Union legislation, some of the findings are generalisable in other sectors, organisations and countries. Practical implications The paper highlights aspects that can aid procurers, suppliers and policy-makers in understanding how public procurement can be an instrument linking innovation and civil preparedness. Social implications It cannot be overemphasised that populations are exposed to more and, arguably, greater hazards. Public authorities can use innovative solutions and processes in meeting multiple objectives such as everyday societal needs as well as civil preparedness and planning. Originality/value Such research, purposely sampling case sectors providing critical services, has not been undertaken before in Finland. This work provides valuable information for organisations involved in public procurement, innovation and civil preparedness.
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In a time of unprecedented turbulence, how can public sector organisations increase their ability to find innovative solutions to society's problems? "Leading public sector innovation" shows how government agencies can use co-creation to overcome barriers and deliver more value, at lower cost, to citizens and business. Through inspiring global case studies and practical examples, the book addresses the key triggers of public sector innovation. It shares new tools for citizen involvement through design thinking and ethnographic research, and pinpoints the leadership roles needed to drive innovation at all levels of government. "Leading public sector innovation" is essential reading for public managers and staff, social innovators, business partners, researchers, consultants and others with a stake in the public sector of tomorrow. "This is an excellent book, setting out a clear framework within which the practicalIssues involved in public sector innovation are explored, using insights drawn from extensive practical experience of implementing and supporting it. It draws on an impressive range of research and relevant wider experience in both public and private sectors and is written in a clear and persuasive style. The book offers an excellent synthesis of principles, practices and tools to enable real traction on the innovation management problem - and it ought to find a place on any manager's bookshelf." John Bessant, Director of Research and Knowledge Transfer and Professor of Innovation and Entrepreneurship, University of Exeter Business School.
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