Public sector procurement as a driver of innovation

Evidence shows that public procurement can play a much greater role as a vehicle that drives innovation in the private sector and simultaneously supports the growth of SMEs. How can we ensure that public procurement is driving innovation more generally and encouraging the development of good quality services and products?

If cost minimisation remains the primary factor in determining public contracts, orders will continue to go to large firms, who can offer economies of scale. Such relationships have benefited government and large suppliers because large, long-term contracts can be specified to drive innovative practices within large firms.

However, this practice can often preclude small and medium sized innovative firms, and thus prevents the UK's most innovative sector from accessing a large potential market for their goods and services. We are conducting ongoing research into these relationships and practices, which are crucial for building a better innovation ecosystem.