Public procurement of
innovation and R&D
Dr Jacqueline Homan
Sustainability and Science City
Manager
Why do it?
• In 2009 total public expenditure on works, goods
and services was estimated to be 19.4% of the
GDP of the EU 27
• Recommendations are that about 3% should be
spent on innovation.
• Nowhere near this yet
Background
• Birmingham City Council and Birmingham Science City
developed initial work
• Responded to House of Lords Select Committee
report in 2010
• Began linking into strategic thinking in Europe and UK
• Developed links with the Technology Strategy Board
• Accessing and developing European funding
opportunities
• Focus to date has been on carbon reduction
initiatives
ICLEI Network
• ICLEI is developing a public procurement of
innovation platform.
• Birmingham City Council is represented on the
Advisory Board with other local authorities and
national organisations across Europe.
• This will feed into European Commission thinking.
• It will also provide an opportunity to develop
practical tools for public procurers.
SBRI
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Run by the Technology Strategy Board.
Similar to models used in the US and Netherlands.
Procurement of R&D.
Investigating possibilities in the retrofit arena –
links to Birmingham Energy Savers.
Procurement Compacts
• Prince of Wales Corporate Leaders’ Group: ‘Down
to Zero’
• Birmingham City Council one of a number of
signatories
• Signalling to the market about what we want to
purchase
• Transport, biogas and catering
TRANSFORM
• Towards Sustainable Zero Carbon Transport
through Innovation Procurement
• Themes:
– Alternative transport models and behaviour
– ICT and network technologies
– Zero carbon zero emission vehicles
Climate KIC
• Pioneer Cities project: led by Birmingham City
Council
• Climate Market Accelerator pilot
• Public procurement explored as a future priority
• Procurement network to be established and links
to other networks
SPEA
• Main aim is to develop innovative retrofit
solutions for municipal buildings.
• Other objectives:
– To improve the capacity of contracting authorities as
well as SMEs regarding the procurement of innovation
– To create buyers’ groups
– To build cooperation with other stakeholders essential
for the implementation of innovative procurement
– To deliver recommendations to the EU
– To raise awareness among policy makers
Challenges
• Organisation of both national and local government into a
series of stand alone silos.
• A local authority procurement contract may stimulate
innovation and employment in places that are outside the local
authority’s area of responsibility
• Procuring innovation using PCP or FCP is based on the premise
of an unmet need. Organisations are adept at finding partial
solutions or ‘work arounds’ to these needs and therefore avoid
procuring innovation.
• Procurers are naturally risk averse and unwilling to be first to
bring to trial a new approach and the ‘first rider principle’
applies.
• Procuring innovation needs to be incentivised and funding
should be conditional on procurers using outcome based
procurement including innovation as a selection criterion.
What do we need to do?
• Nomination of a senior champion
• A funding stream to remove the issue of additional
complexity and risk.
• A network and staff resources need to be available to
identify, consider and prioritise opportunities.
• Establishing a pre-commercial procurement demonstrator
project.
• Continue to access and develop future funding sources to
try and deliver more ambitious procurement activity.
The Greater Birmingham Project
• Procurement of
innovation highlighted
• Single procurement
strategy to be produced
• And there will be a more
to share ‘capacity and
expertise to drive forward
innovative procurement
across the GBSLEP’
Contact information:
jackie.homan@birmingham.gov.uk
+44 (0)7833 059273