Guide to Research and Innovation Strategies for Smart Specialisation

• Higher impact of innovation investments thanks to a comprehensive strategy that
combines R&D investments (e.g. in eco-innovation) with purchasing innovations (e.g.
of energy efficient and low carbon buildings or transport),
• Higher mobilisation effect on private investors / venture capital, thanks to the faster
market access and return-on-investment for innovative firms.
Barriers and Challenges
The main reasons why still too few public procurers in the EU buy innovations and why the
procurement of innovation is still hardly used as an innovation support tool are:
• Lack of or wrong incentives for public procurers: Procurers tend to favour low cost, low
risk, and 'off the shelf' solutions once the (political) decision on what to buy and at
which price has been taken even when there are longer term benefits to public service
providers in testing and procuring new technologies and solutions,
• Lack of knowledge of public procurers on what new technologies and innovations are
available in the internal market or are possible and what could be the medium to longterm
benefits and cost savings,
• Lack of capabilities of public procurers to manage procurement procedures involving
market consultations, competitive dialogues, cost-benefit evaluations, life-cycle costing
assessments, etc,
• Fragmentation in demand and lack of critical mass: In general, individual procurements
are mostly too small for companies to make investments in innovations worthwhile.
There are hardly any mechanisms to allow the pooling of risk and resources across
countries and different administrations,
• Difficulties for innovative SMEs to be involved in public procurement as direct supplier
as shown by the EC study on SMEs access to public procurement 129 . This hampers the
access of public authorities to the innovative potential of SMEs, in particular high-tech
SMEs who play a key role in creating innovative solutions,
• No strategy that links public procurement with other public policy objectives: the
administrations in charge of e.g. health and care services, environment, mobility,
energy, housing, waste and water management do not perceive themselves as having any
role to play regarding support for innovative firms. On the other side, administrations in
charge of research, innovation and business support do not include in their strategies the
question of what innovative solutions the public sector would need to procure. In
addition, the two sides of the administration do not develop jointly their strategies.
How to act?
The ERDF allows in a unique manner to strategically combine investments in R&D and
innovation capacity building with demand-side measures. This is particularly true for public
procurement, as the partnership contracts and strategic reference frameworks include different
strands of administration (e.g. environment, transport, industry, innovation) and allow for the
development of strategies that cover entire countries (and even beyond).
Therefore, the European Commission recommends:
129 http://ec.europa.eu/enterprise/policies/sme/business-environment/public-procurement/
101