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Effectiveness of public procurement of innovation versus supply-side innovation measures in manufacturing and service sectors

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  • Dragana Radicic

Abstract

Most quantitative evaluations report positive but small effects of supply-side innovation measures. Although the literature suggests that demand-side measures, in particular, public procurement of innovation, might be more effective in stimulating innovation than supply-side measures, empirical evidence on this proposition is scarce. To empirically test this proposition, we utilize the Eurobarometer 2014 survey to estimate the effects from public procurement of innovation as well as from the supply-side innovation measures on product and process innovations in manufacturing and service firms in the USA and Europe. Our findings suggest that the treatment effects of public procurement of innovation are indeed larger than the effects of supply-side public support on product innovation in both manufacturing and service sectors. This finding also holds for process innovation, but only in the service sector. In contrast, in manufacturing firms, the estimated effects on process innovation are only positive and significant in firms receiving public support.

Suggested Citation

  • Dragana Radicic, 2019. "Effectiveness of public procurement of innovation versus supply-side innovation measures in manufacturing and service sectors," Science and Public Policy, Oxford University Press, vol. 46(5), pages 732-746.
    • Handle: RePEc:oup:scippl:v:46:y:2019:i:5:p:732-746.
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    File URL: http://hdl.handle.net/10.1093/scipol/scz026
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    Cited by:

    1. Apostolos Vetsikas & Yeoryios Stamboulis, 2023. "A conceptual framework for modeling heterogeneous actors' behavior in national innovation systems," Journal of Evolutionary Economics, Springer, vol. 33(3), pages 773-796, July.
    2. Dragana Radicic, 2021. "Financial and Non-Financial Barriers to Innovation and the Degree of Radicalness," Sustainability, MDPI, vol. 13(4), pages 1-15, February.
    3. Jugend, Daniel & Fiorini, Paula De Camargo & Armellini, Fabiano & Ferrari, Aline Gabriela, 2020. "Public support for innovation: A systematic review of the literature and implications for open innovation," Technological Forecasting and Social Change, Elsevier, vol. 156(C).
    4. Greco, Marco & Germani, Francesca & Grimaldi, Michele & Radicic, Dragana, 2022. "Policy mix or policy mess? Effects of cross-instrumental policy mix on eco-innovation in German firms," Technovation, Elsevier, vol. 117(C).
    5. Mario Davide Parrilli & Dragana Radicic, 2021. "Cooperation for innovation in liberal market economies: STI and DUI innovation modes in SMEs in the United Kingdom," European Planning Studies, Taylor & Francis Journals, vol. 29(11), pages 2121-2144, November.
    6. Jun Chen & Jia Liu, 2021. "Incentive and uncertainty: the simultaneous effects of demand on innovation," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(9), pages 7743-7757, September.
    7. Yuqi Ma & Zhaoyingzi Dong & Pierre-Alexandre Balland & Hantian Sheng, 2026. "Public Procurement of Innovation and Regional Technological Diversification. The Role of Local and Non-local Sourcing in China," Papers in Evolutionary Economic Geography (PEEG) 2609, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jun 2026.

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