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Innovation on Demand? The Implications of Stronger Demand Orientation for Innovation Policy

Author

Listed:
  • Helge Dauchert
  • Dietmar Harhoff
  • Patrick Llerena
  • Wolfgang Crasemann
  • Carla Dekker
  • Oliver Falck
  • Simon Wiederhold
  • Ludger Wößmann

Abstract

In recent years the debate over the effects of public demand as a driver for innovation and economic growth both in Germany and internationally has become far more dynamic. Helge Dauchert, Dietmar Harhoff and Patrick Llerena, the Expert Commission on Research and Innovation, primarily attribute this interest in public procurement as a policy instrument for promoting innovation to the sheer size of the public procurement market which, according to OECD estimates, totalled around 13% of GDP in Germany in 2008. In general, the authors definitely see potential for greater orientation towards innovation in public procurement, which often remains untapped due to the heavy fragmentation of public procurement in Germany and the lack of any incentive to purchase innovative services. Wolfgang Crasemann, German Federal Ministry of Economics and Technology, describes how the government and the EU Commission wish to promote public procurement as a policy instrument for promoting innovation more actively in the future. Some EU member states have already introduced programmes focused on the public procurement of innovation. Carla Dekker from the Dutch Ministry of Economics presents her country’s SBIR-Initiative, which – based on the model of the U.S. Small-Business-Innovation-Research-Program – financially supports innovative solutions from an idea to market maturity (and eventual public procurement) in a multi-step process. Oliver Falck, Simon Wiederhold and Ludger Wößmann, Ifo Institute, demand that the planned measures and pilot projects to strengthen innovation orientation in public procurement should be accompanied by convincing assessments of their effectiveness and financial viability before their large-scale introduction.

Suggested Citation

  • Helge Dauchert & Dietmar Harhoff & Patrick Llerena & Wolfgang Crasemann & Carla Dekker & Oliver Falck & Simon Wiederhold & Ludger Wößmann, 2013. "Innovation on Demand? The Implications of Stronger Demand Orientation for Innovation Policy," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(05), pages 03-19, March.
    • Handle: RePEc:ces:ifosdt:v:66:y:2013:i:05:p:03-19
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    References listed on IDEAS

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    1. Falck, Oliver & Heblich, Stephan & Kipar, Stefan, 2010. "Industrial innovation: Direct evidence from a cluster-oriented policy," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 574-582, November.
    2. Falck, Oliver & Wiederhold, Simon, 2013. "Nachfrageorientierte Innovationspolitik," Studien zum deutschen Innovationssystem 12-2013, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    3. Albert N. Link & John T. Scott, 2013. "Employment growth from the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 4, pages 65-88, Edward Elgar Publishing.
    4. Lerner, Josh, 1999. "The Government as Venture Capitalist: The Long-Run Impact of the SBIR Program," The Journal of Business, University of Chicago Press, vol. 72(3), pages 285-318, July.
    5. Howitt, Peter & Aghion, Philippe, 2006. "Appropriate Growth Policy: A Unifying Framework," Scholarly Articles 4554121, Harvard University Department of Economics.
    6. Scott J. Wallsten, 2000. "The Effects of Government-Industry R&D Programs on Private R&D: The Case of the Small Business Innovation Research Program," RAND Journal of Economics, The RAND Corporation, vol. 31(1), pages 82-100, Spring.
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    1. Lehnen, Jens & Ehls, Daniel & Herstatt, Cornelius, 2014. "Implementation of lead users into management practice: A literature review of publications in business press," Working Papers 78, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.

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    More about this item

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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