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Public procurement and innovation—Resurrecting the demand side
Published Date September 2007, Vol.36(7):949–963,doi:10.1016/j.respol.2007.03.003 Author
Jakob Edler,
Luke Georghiou
PREST/Manchester Institute of Innovation Research, Manchester Business School, University of Manchester, Harold Hankins Building, Manchester M13 9PL, UK
Received 12 January 2007. Revised 26 March 2007. Accepted 27 March 2007. Available online 18 May 2007.
Abstract
Demand is a major potential source of innovation, yet the critical role of demand as a key driver of innovation has still to be recognised in government policy. This article discusses public procurement as one of the key elements of a demand-oriented innovation policy. The paper starts by signaling the new significance of public procurement for innovation policy strategies at the EU level and in a range of European countries. It then defines the concept of public procurement and embeds this concept within a taxonomy of innovation policies. The rationales and justifications of public procurement policies to spur innovation are discussed, followed by a consideration of the challenges and potential pitfalls as well as appropriate institutional arrangements and strategies, including some recent empirical examples of good practice. It concludes by confronting the public procurement approach with two of the most common objections to it and by considering future prospects.
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