Thessaloniki, 29th April 2014
Innovation procurement in Italy
Mobilizing R&D budget, current expenditure and
Structural Funds
EU High level event «Digital Innovation for Regional Growth»
Sara Bedin
Independent expert on innovation procurement
for MIUR-MISE and Lombardy Region
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Innovation policy mix and «market failure»
Fundraising 2.0
P2P Social lending
Innovation partnership
equity Crowd-funding
St a t e A i d
Technological F o r e s i g h t
LIVING -LAB
Negotiated procedure
PPI - Procurement of innovative solution
Pre-commercial
Public procurement
INNOVATION VOUCHER
Peer–to–peer financing
Design contest
C o n t e s t of i d e a s
Technical dialogue
P r o j e c t -f i n a n c i n g
Crowd-sourcing
competitive/collaborative
Policy maker perspective:
Explorative
survey innovation
Competitive
Dialogue to
ideological adoption
of instruments
promote
Public Private Partnership
technology
transfer
More than 70%
of “successful”
R&D funded project don’t have a commercial success (exploitation)
Innovation
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
REUSE 2.0
Tax credit
2
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Working on the Innovation Policy Portfolio
...enabling an earlier reality check of industry
R&D against concrete needs and challenges,
...maximizing the effectiveness of the R&D
process/effort,
...optimizing the value for money and impact of
public R&D spending / investments,
...increasing the percentage of
commercialization of R&D results,
...avoiding to
innovation,
distort
the
successful
competition
on
...enabling exploitation of innovation by supplier
to scale-up business to other clients and markets,
...allowing SMEs to growth and compete in global
market,
...creating optimun conditions for take-up of
R&D&I through standardization.
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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Procurement instrument mix and «market failure»
Innovation partnership
Competitive Dialogue
Negotiated procedure
Green procurement
Public procurement
R&D public procurement
Design contest
C o n t e s t of i d e a s
Technical dialogue
Public C O N C E S S I O N S
Public procurer perspective:
Explorative survey
uncritical modus operandi
repetition
Public Private Partnership
More than 50% of public procurements for deployments of commercial solutions do not achieve the
expected results (in terms of quality, time, cost).
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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Working on the Procurement Procedure Portfolio
.... aligning the objectives of the public and
private parties for the widespread exploitation of
innovation,
...fostering competition during execution and
innovation and extending the realization of
efficiency and effectiveness gains also over
longer the contract period,
...avoiding to lock-in to one/few suppliers,
...enabling a better understanding of demand
and allowing businesses to reduce market entry
times,
....sharing risk and benefit, obtaining the best
whole life-cycle value for money, without
assuming (all) the technological risks,
...increasing spontaneous innovation investment
levels within the firm (input additionally),
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
...pooling the efforts of several procurers.
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The importance of changing mind-sets
SUPPLY-SIDE POLICY
POL CY
M ND
SK LLs
DEMAND-SIDE POLICY
Sh ft
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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INNOVATION ORIENTED
PROCUREMENT STRATEGY
CONDICIO SINE QUA NON
PCP has a twin relevance, both as strategy and policy
WHY: Increasing
long-term effectiveness and
efficiency of public expenditure, as well as
improving the quality and sustainability of
public services, filtering out technological
risk
EFFECT
WHY: Raising industry’s innovative performance
DEMAND-DRIVEN
INNOVATION/INDUSTRIAL POLICY
and creating opportunities for companies
to take international leadership in new
markets
the cause-effect relation must not be swapped!
© 2013 The European House-Ambrosetti S.p.A.. ALL RIGHTS RESERVED
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The public sector should assume a double role in promotion of
R&D&I via PCP (and PPI)
(1/2)
contribution, funding
1
Financial support to implement
innovative procurement action
and to pool demand
POLICY
MAKER
provision of R&D
services +
financial compensation
2
PUBLIC
PURCHASER
e.g. PCP
Mutually
binding and
risk-benefit
sharing
(service)
contract
SUPPLIER
payment of full cost
at market price
PCP work fully within EU competition law
Scope of the EU State Aid rules for R&D Framework
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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The public sector should assume a double role in promotion of
R&D&I via PCP (and PPI)
(2/2)
Improve productivity of
public services YY
PPI
crossorganizational
coordination to
the public
demand and
R&D budgets
Improve longterm quality of
activate a
public services XX
positive
climate for
innovation
PPI
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Reduce risk of
mistakes in follow-up
foster
and
for large scale
encourage
deployment
the
participation
of SMEs
POLICY
MAKER
stimulate the
“intelligent
customer“
modus
operandi
JOINT
create PCP
awareness of
the new
policy tools
reduce
barriers to a
wider private
adoption of
new solutions
PCP
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The national “top down” approach for PCP /PPI
Amount of resources allocated: 150Million EUR
The National
PCP/PPI funding
program through
the Cohesion
Action Plan
Source of funding: re-invested resources resulting from the
reduction in the national co-financing quota (National revolving
Fund), originally allocated for NOP R&C
Intensity of funding: (100% PCP) – (~ 20% PPI)
Procurer/Recipients of innovation: Body governed by
public law engaged in public services and localized in (one or
more of) the 4 (IT) Convergence Regions
Policy maker: MIUR (Ministry for education, research and
innovation) and MISE (Ministry for Economic Development)
Adjudicating authority: (for PCP) MIUR (Ministry for
education, research and innovation) and MISE (Ministry for
Economic Development); (for subsequent PPI) local PAs.
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Implementing act: Public notice for the recognition of
innovation needs in Convergence Region - DD 437 of 13
10
/03/2013).
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The Cohesion Action Plan reprogramming measure in Italy
NOP R&C initial funding
Axis I - Support for structural changes to innovation
Axis II- Support for innovation
Axis III - Technical assistance
Horizontal priorities
TOT
EURO (Million)
€
4254
€
1721
€
230
€
0
€
6205
NOP R&C reprogrammed
CAP
(National Operational
(Cohesion
Program Research and
Action Plan)
%
EURO (Million)
% EURO (Million)
€
2555,7
€
877
€
1664,1
€
586
€
204,5
€
18
€
0
€
300
100%
€
4424,3
100% €
1781
referred to EC ERDF
referred to National Revolving Fund (FdR)
€
€
3103
3103
50%
50%
€
€
3102,7 70,10%
1321,7 29,90% €
referred to MIUR
referred to MISE
€
€
3233
2973
52%
48%
€
€
2365,7
2058,7
Innovation public procurement (quota referred to MIUR)
Innovation public procurement (quota referred to MISE)
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
1781
53% €
47% €
867
914
€
€
100
50
11
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The national “top down” funding program for PCP /PPI
(submitted innovation needs)
Admission criteria
1.Commitment to identify and
organize a real-life customer
environment in order to assess the
performance
of
working
prototypes (or limited volume of
first products or services in the
form of a test series), to
demonstrate that they are suitable for
production or supply in quantity to
acceptable quality standards.
2.Commitment to undertake the
procurement
of
innovative
solutions (PPI) resulting from
R&D.
(submitted innovation needs)
Award criteria
1. Social and economic relevance
a)Adherence to the thematic priorities of Horizon 2020.
b)Connection with a priority or urgent challenges emerging in urban
areas, metropolitan and regional level.
2. Technical relevance
a)Novelty and originality of knowledge needed, with reference to the
state of the art – this eventually detected with a technical dialogue
before expression of interest.
b)Specification
requirements
level
of
the
need
functional
and
performance
c)Adequacy of the real-life operating environment identified for the test
and experimentation.
3. Industrial relevance and potential target
market
a)Relevance and coherence of the innovation need with respect to local
industrial development objectives
b)Level of demand aggregation/pooling, documented with the number
of public bodies involved in the partnership (and not necessarly
established in one of the Convergence Region)
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
c)Target market potential dimension.
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The national “top down” funding program for PCP /PPI
NATIONAL LEVEL
(Policy maker + Adjudicating
authority)
13 March 2013
Notice of
Call for idea
June 2014
Expression of interest
evaluation
Candidate PCP ranking
Candidate PCPs
selection
Financial allocation to
projects
(100% PCP and ~20% PPI)
PCPs procedures design
(Open technical
dialogues)
PCP call for tender and
procedures
management
LOCAL LEVEL
(Recipients of innovation)
Needs assessment
SoA analysis
(technical dialogue)
Expression of
interest
submission
September 2013
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Sperimentation of
different solutions in
real-life operational
conditions
Co-funded PPI action
(procuring commercial
volumes of endproducts) 13
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Recognition of innovation needs in Convergence Region:
preliminary figures on geographic distribution
(1/2)
199 projects submitted
190 projects eligible
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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Recognition of innovation needs in Convergence Region:
preliminary figures on thematic distribution
(2/2)
HEALTH and SOCIAL SERVICES
TOURISM
TRANSPORT, INFOMOBILITY, SUSTAINABLE MOBILITY
PUBLIC SERVICES MANAGEMENT and ORGANIZATION
HISTORICAL AND CULTURAL HERITAGE
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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The local “bottom-up” approach for PCP /PPI
Amount of resources allocated: 750K EUR
The Lombardy
Region innovation
procurement pilot
Source of funding: Lombardy Region own R&D budget
Intensity of funding: (100% PCP) – (100% PPI)
Procurer/Recipients of innovation: Lombardy Region
(General Direction for Healthcare) + Niguarda Hospital
(and others local hospitals)
Policy maker: Lombardy Region (Direction for research)
Adjudicating authority: ARCA (Regional Purchasing
Agency)
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Implementing act:
• Agreement ex art.15 L.241
• Public notice for open technical dialogue and public
hearing
• Public notice for explorative survey
• Call for tender publicated in the Official Gazette of the
EU + Official Gazette of the Republic of Italy + website
16
+ newspapers on 08/03/2013.
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The local “bottom-up” approach for PCP /PPI
(R&D services procurement)
(R&D services procurement)
Admission criteria
Award criteria
objective and relevant in view of the commercialization
objective and relevant in view of the commercialization
1.No reasons for exclusion as set
out in article 38 (National
Procurement Law)
1.Based on the most economically
advantageous offer (not on lowest price)
2.(Declaration of) the ability to
perform all R&D services and
contractual activities described in
lex specialis (Experimental
Development and Intellectual
Property rights management
contracts)
Novelty/innovativeness (progress beyond the state-of-the-art)
3.(Declaration) to have accounting
and organizational structures to
ensure the management,
exploitation and /or transfer of
IPRs arising from R&D activities.
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Ability to address the problem and satisfy the requirements
Technical feasibility/reproducibility with an industrial process
Quality and effectiveness of the organization and resources
2. Incorporating life-cycle cost and
performance in the evaluation of proposals
Measures taken to ensure the environmental sustainability of
the solution throughout the life cycle
Measures taken to ensure the cost reduction of the solution
throughout the life cycle
3. Including the soundness of the
commercialization plan of the bidders.
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The local “bottom-up” approach for PCP /PPI
April 2013
Call for idea in
health sector
Identifying (potential)
PCP projects from
innovation needs
Building awareness and objective alignment
Procurer and Recipients of
innovation)
(Policy maker + Adjudicating
authority)
January 2012
Business case
preparation
cost-benefit analysis
and investment
definition
Candidate PCP
(preliminary) ranking
Needs identification
and baseline
assessment
April 2012
Open technical dialogue
«WIBGI»
moderated focus
group
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Candidate PCP selection
Perform IPR contract
Financial allocation
PCP procedure design
PCP call for tender and
procedure management
Experimentation of
different solutions in
real-life operational
conditions
PPI action (procuring
commercial volumes
of end-products)
Comprehensive SoA
analysis and patent
search
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To increase long-term effectiveness and efficiency of public expenditure
To design a demand driven approach to innovation policy
To support innovation through financial allocations already assigned To ensure sustainable high
to public services management (zero budget policy)
quality public services
pre-commercial
public procurement
To
filter technological risk before a
large scale commercial procurement
Research & Development services
To develop new markets and help
To buy
commercialization for innovative solutions
To re-establish private
spontaneous
incentives to innovate
To address public needs and social challenges through concrete innovation
To benefit from a more flexible regulation of To activate virtuous mechanisms of
competitive procurement
the implementation procedure
To stimulate innovation through public expenditure
WHATwithout
KIND beeing
OF SUPPORT
NEED?
locked-inDO
to anyWE
vendor
FINANCIAL INCENTIVATION
To anchor innovation
into reality ?
and/orinCAPACITY
To broaden SMEs participation
R&D projects BUILDING
To implement innovations rapidly, cooperating with the market
and create opportunities for companies to take international
leadership in new markets
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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R&D procurement expenditure gap: it’s time to act
2,1% of GDP in R&D
0,1% of GDP in R&D procurement
€ 2,5 Bn/y
in R&D procurement
3 % of GDP in R&D
0,5% of GDP in R&D procurement
versus
Expenditure in R&D (%GDP)
$ 50 Bn/y
in R&D procurement
(20 times more)
PUBLIC PROCUREMENT OF PRODUCTS AND SERVICES
REPRESENTS AROUND 17% OF GDP IN EUROPE
(ENORMOUS ECONOMIC LEVERAGE)
...If 2% (more) of public procurement spending was addressed to R&D, EU could achieve innovative
procurement markets equivalent to those in the US...
...and could benefit from a greater economic leverage than Horizon 2020
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
Source: European Commission
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R&D procurement expenditure gap: it’s time to act
EU FUNDING PROGRAMS ARE AIMED TO BOOST THE
ADOPTION OF PCP/PPI
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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Conclusions: the value of Horizon 2020 to speeding PCP/PPI
1. SIZING THE MARKET OPPORTUNITIES AT EU LEVEL
> co-funding the procurement value;
 requiring cooperation between procurers across Europe through
cross-border coordinated (or joint) procurement, whilst developing a
strong European home market for innovative products and services;
 mobilizing public and private purchasers and networks leveraging the
complementarity between partners to bring together the demand in
order to create a critical mass to acquire innovative (cost-effective
and fit-to-purpose) solutions, whilst creating new jobs and
opportunities for business growth in Europe, with particular reference
to EU SMEs.
2. ENHANCING INSTITUTIONAL CAPACITY AND STIMULATING
THE PUBLIC ADMINISTRATION TO BE MORE INTELLIGENT
> co-funding the CSA part;
• supporting the coordination, consortium building, networking and
procurement preparation activities;
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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Let’s compete on innovation
during the execution
!
For furher info:
Sara Bedin
sara.bedin@appaltoprecommerciale.it
tel: +39.(0)2.467535270 / +39.3470115010
© 2014 Sara BEDIN. ALL RIGHTS RESERVED
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