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Public procurement of innovation: A review of rationales, instruments and design

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  • Julien Chicot

    () (GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique, UGA UFR FEG - Université Grenoble Alpes - Faculté d'Économie de Grenoble - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Mireille Matt

    () (GAEL - Laboratoire d'Economie Appliquée = Grenoble Applied Economics Laboratory - UPMF - Université Pierre Mendès France - Grenoble 2 - INRA - Institut National de la Recherche Agronomique, INRA - Institut National de la Recherche Agronomique)

Abstract

Public Procurement of Innovation (PPI) has received recent renewed impetus and interest in most OECD countries although the academic literature pays little attention to its economic rationales. Since public procurement is being seen increasingly as an instrument of innovation policy, it is important to understand which situations favour its implementation. Based on a review of the literature on innovation policy, the present paper develops a failure-based framework that allows the resolution by PPI of three types of failures: demand-side, supply-side and user-supplier interaction traps. We propose a four-category typology of PPI based on the type of demand-side failures addressed, and whether or not it also targets supply-side failures. Each category is refined based on the degree of user-supplier interactions required. This typology based on the economic foundation of PPI allows the linking of failure, innovation and public procurement characteristics alongside the types of instruments derived from the academic literature on PPI. One of the strengths of this PPI typology is that it links to the various classifications proposed in the PPI literature and contributes to the smart design of PPI policy. It also considers PPI as a hybrid innovation instrument, that is, a demand-side policy tool, which, if appropriately designed, can be applied to resolve supply-side failures.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Julien Chicot & Mireille Matt, 2015. "Public procurement of innovation: A review of rationales, instruments and design," Post-Print hal-02087751, HAL.
  • Handle: RePEc:hal:journl:hal-02087751
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02087751
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    References listed on IDEAS

    as
    1. Marco Guerzoni, 2010. "The impact of market size and users' sophistication on innovation: the patterns of demand," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(1), pages 113-126.
    2. Saviotti, Pier Paolo & Pyka, Andreas, 2013. "From necessities to imaginary worlds: Structural change, product quality and economic development," Technological Forecasting and Social Change, Elsevier, vol. 80(8), pages 1499-1512.
    3. Max Rolfstam, 2009. "Public procurement as an innovation policy tool: The role of institutions," Science and Public Policy, Oxford University Press, vol. 36(5), pages 349-360, June.
    4. Chaminade, Cristina & Edquist, Charles, 2005. "From theory to practice: the use of systems of innovation approach in innovation policy," Papers in Innovation Studies 2005/2, Lund University, CIRCLE - Center for Innovation Research.
    5. Edler, Jakob & Georghiou, Luke, 2007. "Public procurement and innovation--Resurrecting the demand side," Research Policy, Elsevier, vol. 36(7), pages 949-963, September.
    6. Mangematin, V. & Callon, M., 1995. "Technological competition, strategies of the firms and the choice of the first users: the case of road guidance technologies," Research Policy, Elsevier, vol. 24(3), pages 441-458, May.
    7. Steinmueller, W. Edward, 2010. "Economics of Technology Policy," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.),Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1181-1218, Elsevier.
    8. Georghiou, Luke & Edler, Jakob & Uyarra, Elvira & Yeow, Jillian, 2014. "Policy instruments for public procurement of innovation: Choice, design and assessment," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 1-12.
    9. Elvira Uyarra & Kieron Flanagan, 2009. "Understanding the Innovation Impacts of Public Procurement," European Planning Studies, Taylor & Francis Journals, vol. 18(1), pages 123-143, June.
    10. Dominique Guellec, 2001. "Les politiques de soutien à l'innovation technologique à l'aune de la théorie économique," Économie et Prévision, Programme National Persée, vol. 150(4), pages 95-105.
    11. J. Edler & L. Georghiou & K. Blind & E. Uyarra, 2012. "Evaluating the demand side: New challenges for evaluation," Research Evaluation, Oxford University Press, vol. 21(1), pages 33-47, February.
    12. Bleda, Mercedes & del Río, Pablo, 2013. "The market failure and the systemic failure rationales in technological innovation systems," Research Policy, Elsevier, vol. 42(5), pages 1039-1052.
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    More about this item

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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