Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2012/11: Why Pre-Commercial Procurement is notInnovation Procurement

Charles Edquist () and Jon Mikel Zabala-Iturriagagoitia ()
Additional contact information
Charles Edquist: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Jon Mikel Zabala-Iturriagagoitia: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden

Abstract: In 2006 the European Commission introduced the concept of "Pre-Commercial Procurement" as an instrument to promote innovation and to mitigate grand challenges. One of the main motivations for the support of Pre-Commercial Procurement schemes was to use public needs as a driver for innovation. This concept was also introduced as a response to the need to reinforce the innovation capabilities of the EU, while improving the quality and efficiency of public services. However, there is still a certain degree of confusion as to what is meant by Pre-Commercial Procurement and what rationales are behind it. This paper addresses the differences between two public policy instruments, PreCommercial Procurement (PCP) and Public Procurement for Innovation (PPI), and clarifies what is meant by each of them. The analysis is based on three cases, one from the Netherlands, one from the UK and one from Australia. While PPI is a demand-side policy instrument, these cases provide evidence of the supply-side nature of Pre-Commercial Procurement in relation to innovation. The paper claims that PCP is a matter of R&D funding of a specific kind, geared towards very specific goals and in a focused way. Thus, we would like to raise a flag for going back to the origins of the PCP program, and calling it a precompetitive R&D program rather than talking about procurement.

Keywords: Pre-Commercial procurement; Public Procurement for Innovation; R&D; Innovation; Innovation policy

JEL-codes: H57; L38; M38; O25; O32

29 pages, November 15, 2012

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201211_Edquist_Zabala.pdf PDF-file

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