Innovation-oriented public procurement
Each year, public entities in Germany order goods and services to the value of around € 300 billion. That means tremendous potential for innovations in the shape of new products and services that can meet public bodies’ requirements better than the alternatives currently available. Innovation-oriented public procurement offers public entities the possibility not only to develop such products and services in cooperation with partners from commerce, science and research but also to purchase them afterwards and introduce them into the market.
The potential impact was recognised at European level, so that suitable funding instruments have already been in place since 2009. These are first and foremost Pre-commercial Procurement (PCP) and Public Procurement of Innovative Solutions (PPI).

The instruments in detail
Should the public sector require innovative solutions for which no answers, for example suitable products, are currently available on the European market, an international consortium of procurers invites tenders for a three-stage research project. The PCP project comprises a feasibility study, prototype development and testing of first products. Enterprises as well as scientific or research institutes can provide needs-based and demand-oriented R&D services. If their solutions and products prove to be satisfactory, in the ideal case these are purchased in a follow-up project known as PPI - Public Procurement of Innovative Solutions.

Both instruments help the public sector to invest more money in innovative products and at the same time make use of the leverage effect offered by EU funding for research and innovation. To this purpose, calls for proposals for projects on different themes are published on a regular basis in Horizon 2020, the current EU Framework Programme for Research and Innovation (2014-2020).

Potential synergies
Calls for proposals for both innovation-oriented public procurement instruments – PCP and PPI – are published within the Horizon 2020 programme. In principle, it is also possible to fund projects related to both instruments from different programmes (ERDF and Horizon 2020).

Innovation-oriented public procurement projects also have the potential to strengthen innovation capacity within the research projects themselves (PCP) and can boost innovation in the regional economy through the purchase and market introduction of innovative products and services (PPI).