Spending smarter: how procurement holds the key to unlocking innovation

Challenging economic times call for a renewed focus on how public money is spent and whether the goods and services bought represent best value. Using procurement to elicit innovative ideas, products and approaches can help authorities to save money, increase efficiencies and drive growth. 

Securing these outcomes from procurement requires better and earlier conversations between public sector managers and procurement teams – treating procurement as an exercise in compliance means missing out on its power to drive strategic benefits. 

This was one of the key takeaways from a conference held in the West Midlands earlier this month, which saw the launch of the Innovation Procurement Empowerment Centre by Connected Places Catapult in association with Innovate UK and the universities of Birmingham and Manchester.

One aim of the new centre is to resource and upskill public sector buyers to help them to have better conversations with suppliers, which could not only lead to better public services, but also encourage the growth of innovative businesses. 

“Public procurement should not be perceived as a necessary evil, but something which can be truly powerful and exciting,” Sam added. “It is all about ‘smarter spending’ and I invite others to join me in using that phrase when talking about innovation-friendly procurement.” 

He also suggested that the reasons why more professionals do not engage enthusiastically with procurement are more “cultural, emotional and psychological”, rather than necessarily being associated with legislation or policy. “Through the centre we are trying to build up the evidence base for innovation procurement that supports the case for change,” he continued.

During the last year, two reports have been published by Connected Places Catapult which fed into the Innovation Procurement Empowerment Centre to drive the conversation forward. The first was a review of pioneering practice in public procurement of innovation, and the second considered international lessons on how best to empower public sector organisations in the use of innovation-friendly procurement processes.

“This gave us a lot of insight into what we in the UK should do, and what a UK innovation procurement competency centre could look like,” Sam said. “The centre’s website features a whole host of reports, and we have created a new LinkedIn page to promote the work. Connected Places Catapult is investing in the centre for the next five years, and I hope beyond.” 

Innovation experts weigh in 

Delegates at the event in Birmingham, titled ‘Empowering Innovation through Public Procurement’ happened to gather on the same day that Government had launched its new Science and Technology Framework, of which one of ten action points was to adopt targets for innovation-friendly procurement spend by departments.  

Another topic of conversation was the passage through Parliament of a new Procurement Bill, set to receive royal assent this spring. 

Connected Places Catapult Associate Director Malcolm Harbour CBE said he is confident that innovation can be encouraged through better procurement.

Malcolm added that he has spent time with a team in the Flanders regional government where innovation-friendly approaches are deeply embedded into procurement. He also noted that UK regions, especially in Wales, were making similar strides. “Their leaderships are changing the culture by recognising procurement as an innovation driver,” he added. 

Speakers at the event adding their support to the need for better procurement of innovation included Professor Luke Georghiou, Deputy President of the University of Manchester. “The assumption is that innovation policy belongs to innovation budgets rather than much larger budgets,” he noted. “But the countries that do most in innovation procurement don’t view it as innovation policy: they just do it.” 

Professor Elvira Uyarra, Director of the Manchester Institute of Innovation Research said there was positive evidence in the UK of the link between public procurement and private sector innovation. In relation to its impact on the public sector, further research is needed to strengthen the case for behaviour change, she added. 

She also pointed out that only 30% of public procurement is carried out at a sub-national level in this country, according to the Organisation for Economic Co-operation & Development, compared with 64% on average in other advanced countries. A more “spatially sensitive approach to public spending” was needed, she added, “to support levelling up left behind regions”. 

Delegates also heard from Professor Jane Lynch of Cardiff University who described the ‘Infuse’ project which aims to promote innovative and sustainable procurement to a wider public sector audience in the Cardiff Capital Region, particularly around accelerating decarbonisation efforts and supporting communities. 

“An urgent concern is preparing our future leaders,” she said, introducing a new board game developed by her colleague Dr Oishee Kundu “to provide school children with a better understanding of what a resilient community looks like and how public procurement can play a role in that”. 

Also at the conference, Karen Woolley of the Federation of Small Businesses spoke up for the role of SMEs in innovation. “Small businesses are at the forefront of innovation: these are people with incredible ideas, expertise and talent,” she said, adding that many of them want to concentrate on their products and ideas, rather than be overwhelmed with contractual paperwork. 

“It is incumbent on those of us working for Government, local authorities or business support organisations to help these businesses get their wealth of knowledge into contracts.” 

Read more about the work of the Innovation Procurement Empowerment Centre.