Innovation procurement happens when public procurers procure the development or deployment of pioneering innovative solutions to address specific mid-to-long term public sector needs. It is a tool to provide tax payers with public services of the best possible quality and efficiency. In some cases, public sector challenges can be addressed by innovative solutions that are nearly or already in small quantity on the market and don’t need new research and development (R&D).
This is when Public Procurement of Innovative solutions (PPI) can be used to get solutions deployed. In other cases, public sector challenges require improvements that are so technologically demanding that there are no near-to-the-market solutions yet and new R&D is needed.
Pre-Commercial Procurement (PCP) can then be used to compare the pros and cons of alternative competing approaches and to de-risk the most promising innovations step-by-step via solution design, prototyping, development and first product testing.
By developing a forward-looking innovation procurement strategy that uses PCP and PPI in a complementary way, public procurers can drive innovation from the demand side. This enables the public sector to modernise public services faster while creating opportunities for companies in Europe to obtain a first customer reference and gain international leadership in new markets.