- Other links
Developing a public procurement culture that stimulates innovation in the economy to meet future public sector needs at better value for money for the taxpayer
The DTI has a keen interest in using public procurement as a tool for stimulating innovation in the UK economy. We believe that challenging the market to provide solutions to future public sector needs can provide that stimulus as well as bring more innovation into the public sector at better long term value for money.
The rationale for our position was publicly expressed in the DTI Innovation Report “Competing in the Global Economy – The Innovation Challenge” which highlights the role that innovation can play in wealth creation in the UK economy, giving huge commercial benefits. It also promotes the Government’s role as a demanding and intelligent customer in stimulating innovation in the marketplace. By acting as an early adopter of innovative solutions and contracting for them in sufficient volume, Government can give industry enough of a market to justify investment in new skills, equipment or R&D with resultant benefits for suppliers’ long-term innovative capacity and competitiveness in other markets.
We are working closely with colleagues in other Government Departments and other stakeholders to ensure the important role that innovation can play in procurement is more widely endorsed. We therefore welcomed the Transforming Government Procurement document published by HM Treasury in January 2007 which makes clear statements regarding the importance of innovation in driving improvement in Government procurement:
In addition, the UK Government’s Sustainable Procurement Action Plan will play a key role in enabling the effective use of Government procurement to transform the market for innovative and sustainable solutions, making them more affordable and widely available.
The European Commission has also been looking at how procuring, within the current EU Procurement Directives, can be used to stimulate innovation in markets. It has published a paper on Pre-commercial Procurement of Innovation of March 2006 and a subsequent Guide on Dealing with Innovative Solutions to Public Procurement of February 2007.
The key recommendations from these, and other, activities on innovation and procurement are:
We recognise that while these activities help set the enabling environment for using procurement to stimulate innovation, those tasked with turning high level policy objectives into procurement reality also need more practical advice. We have therefore been working closely with OGC on providing such advice. In 2004 OGC/DTI published a booklet entitled Capturing Innovation. This guidance provided practical advice to ensure innovation featured from the very beginning of the policy process through identifying needs, deciding the procurement strategy and managing contracts.