An immediate impact on innovation
Public procurement is one of the most underexploited tools in our innovation toolbox.
Your recent article “Looking for a different future” (25-31 March) rightly pointed out that innovation remains one of Europe’s comparative weaknesses. We are lagging behind in terms of innovation output and our track record on performance remains low.
In its review of potential remedies, however, the article left out one of the key tools at our disposal to bolster innovation, one where Europe can make an immediate impact – the use of public procurement to drive innovation.
Public procurement is one of the most underexploited tools in our innovation toolbox. This is something the European Parliament recognised last year in the report I authored on pre-commercial procurement and has been high up the European Commission’s agenda ever since.
In fact, as your article was being written, the Commission was holding a heavily over-subscribed conference on promoting innovation through public procurement, bringing together public procurers, policymakers and businesses from across the EU.
Even European Commission President José Manuel Barroso has recognised that we must harness the power of government procurement to promote innovation, in both his political guidelines for the next Commission as well as various public interventions since.
The article also correctly highlighted that the EU still has to learn from the US. This is particularly the case in innovative procurement. One of the main reasons why the US does so much better in knowledge transfer is because it uses a significant amount of its public purchasing budget in an innovative way. Europe spends 17% of its gross domestic product on public procurement. Allocating just a small proportion (say 0.5%) on innovative solutions would close our innovation gap dramatically. It would also support innovative small and medium-sized enterprises, drive better public services, and focus on critical policy areas such as climate change and health improvement.
Some member states have already made significant progress and the frontrunners (such as Finland) have set up innovation agencies to help public authorities identify innovative solutions. But real action in this area ought to be high on the Europe 2020 action list that heads of government and state must endorse.
Alongside high-level commitment and leadership, we need to tackle the culture of risk aversion in the public sector and help public authorities understand that risk can be exploited to their advantage, rather than being viewed as a barrier.
Of course, innovation does not come without risk, but if we can encourage public authorities to think differently about their priorities, and procure innovatively, we will not only improve the quality of our public services but we will also have the potential of leading the world in innovation, rather than lagging behind.
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Malcolm Harbour MEP