The newly funded project coordinated by PEDAL will design and implement a series of pilot public procurement for innovation (PPI) actions in the area of clean energy and healthcare.

Background and context

Public procurement is a powerful instrument to drive faster adoption of innovation among public sector users while simultaneously promoting economic growth by providing innovative companies the opportunity for first user references. Strategic use of public procurement involves harnessing the purchasing power of public authorities, public service providers and publicly owned utilities to trigger development of new products and solutions and be responsive in adopting innovative supply. By doing so, the public sector can find better solutions to needs currently unsatisfied by conventional solutions to improve efficiency, service quality, sustainability and effectiveness of public services. Simultaneously, innovative firms are provided with opportunities to obtain first customer references for new products and solutions, thus driving growth and economic renewal. The strategic use of procurement to boost demand for innovative goods of services has become an important part of the innovation policy agenda in many EU countries.

Beyond meeting the needs of individual public sector organizations, there is the potential for Public Procurement of Innovation (PPI) to be ‘catalytic’ – i.e., to trigger the purchase of innovative solutions on a larger scale. When procurers represent a critical mass they can help to shift both public and private sector demand towards new technologies and processes. In certain sectors, the demand-pull from the public sector is the most important instrument to develop new markets for innovative products and services.

Key challenges

Despite the significant potential of PPI, the wide spread adoption is only slowly taking up, mainly because of the following challenges:

• There are problems of awareness, knowledge, experience and capabilities related to new technologies and market developments
• There is a lack of incentives and motivation of buying innovative solutions from a new company rather than buying established products from long-standing suppliers (risk-aversion)
• Procurement is often treated as a purely financial and administrative task and so is not aligned with broader policy objectives
• Public procurement markets are more fragmented in Europe than elsewhere, making it more difficult to reach critical mass and limiting opportunities for fostering more standardised or interoperable solutions.
• There are particular difficulties for innovative SMEs to be involved in public procurement as direct providers to contracting authorities (lack of time, resources, bureaucracy, etc.)

New project

Known under the acronym “PRONTO” (Piloting Public Procurement of Innovation), the project builds on the TENDERIO platform which improves access of SMEs to international public contracts. It addresses the above-mentioned challenges by:

• Encouraging cooperation and knowledge sharing between public buyers to promote the use of public procurement to contribute to the development of sustainable innovation, thus creating a fertile platform for future collaboration.
• Using public procurement as a mechanism to pilot sustainable innovation in areas of clean energy and healthcare
• Linking and establishing synergies with research and innovation projects funded by the EU (via Horizon 2020, COSME or other EU funding programmes), with specific focus on EU funded projects fostering PPI, whenever possible.

The project team consists of three public buyers and seven SMEs, from 8 EU countries.

Notes for editors

PRONTO project will receive funding worth € 1.502.759 from the Programme for Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME). Interviews and a full demonstration of all the services are available. Please contact: r.miskuf@pedal-consulting.eu