Local empowerment by co-creating place-based challenge-driven opportunities: lessons from the West Midlands Innovation Accelerator Pilot
File type: pdf
File size: 3.93Mb
How can regions take greater ownership of innovation and use it to drive economic growth?
This IPEC research explores the West Midlands Innovation Accelerator pilot, a programme designed to connect public sector organisations, businesses and innovators around shared regional challenges. Through four innovation projects, the pilot demonstrates how place-based innovation can help SMEs grow, accelerate the adoption of new solutions and strengthen local innovation ecosystems.
The findings provide practical lessons for policymakers, regional leaders and public sector organisations looking to use innovation and procurement more effectively to address local challenges and support long term economic development.
Key findings
- Place based innovation can strengthen regional ecosystems by bringing together public sector organisations, businesses and innovators around shared priorities.
- Challenge led approaches help create pathways for SMEs to develop, test and commercialise new solutions.
- Effective collaboration and brokerage play a critical role in connecting innovators, industry, investors and public sector partners.
- Public procurement can act as a catalyst for innovation by creating opportunities for organisations to co-develop solutions to real world challenges.
- Long term success depends on strong regional leadership, effective governance and sustained investment in innovation capabilities.
Why it matters
As regions look to boost productivity, attract investment and support economic growth, there is increasing interest in how innovation can be shaped by local needs and opportunities. This research shows that place-based approaches can help build stronger innovation ecosystems, support SME growth and improve collaboration across the public and private sectors.
The findings also highlight the importance of developing the skills, partnerships and evidence needed to sustain innovation beyond individual programmes. By embedding innovation within wider growth strategies and using procurement more strategically, regions can create better conditions for businesses to scale, attract investment and deliver lasting economic impact.
Read the full report to discover how place-based innovation can support regional growth, strengthen local ecosystems and unlock new opportunities for businesses and communities.
Related articles
Report
Unlocking procurement for net zero: Overcoming barriers in social housing retrofit
Retrofitting social housing is central to achieving the UK’s net zero ambitions, while improving living conditions and reducing fuel poverty.
Report
Innovation Procurement Competency Centres
Why public procurement fails both public outcomes and high-growth companies: and how to fix it.
Public procurement in the cultural sector: the need for innovation and place-based approaches
The cultural sector has a vital role to play in local economies and communities but the way it is procured is holding it back.
Made up largely of SMEs and freelancers, many organisations rely on short term public commissions to survive. Yet complex procurement processes, limited capacity and a lack of shared understanding between suppliers and commissioners mean they are often locked out of opportunities or unable to fully demonstrate the value they offer.
At the same time, funding models are under pressure. With reduced public investment and heavy reliance on traditional commissioning routes, organisations are being forced to adapt. Many are starting to look beyond core arts funding, exploring work in areas such as education, health and community wellbeing. This shift creates an opportunity to rethink how procurement works and how it can better support innovation, not just in what is commissioned, but in how.
This research looks at what that change could mean in practice. Using Birmingham as a case study, it highlights the impact of funding constraint and risk aversion on both sides of the system, and why more flexible, place based approaches are needed. Culture is inherently local, shaped by identity, history and community, and procurement needs to reflect that if it is to be effective.
The report sets out why current approaches are falling short and where there is scope to do things differently. It explores how better collaboration, clearer articulation of value and more open procurement processes could unlock new opportunities for cultural organisations and the places they serve.
Key insights
The research identifies a set of systemic challenges:
- Limited capacity among SMEs to engage with complex procurement processes
- Difficulty in capturing and communicating cultural, social and economic value
- Over reliance on short term public funding and commissions
- Risk aversion across both commissioning bodies and suppliers
- Procurement frameworks that restrict innovation and flexibility
It also highlights the importance of place-based approaches, recognising that cultural value and delivery are closely linked to local context and identity.
Without change, procurement will continue to limit the sector’s resilience and growth. More flexible, innovation friendly approaches can help cultural organisations engage more effectively in commissioning, unlock new markets, and contribute to wider priorities such as health, education and community wellbeing.
This report sets out the case for change and offers practical insight into how procurement can better support innovation and place based outcomes.
Explore the full report to understand the barriers, the opportunities, and the action needed to unlock the sector’s potential.
Unlocking procurement for net-zero: overcoming barriers in social housing retrofits
Related articles
Report
Unlocking procurement for net zero: Overcoming barriers in social housing retrofit
Retrofitting social housing is central to achieving the UK’s net zero ambitions, while improving living conditions and reducing fuel poverty.
Report
Innovation Procurement Competency Centres
Why public procurement fails both public outcomes and high-growth companies: and how to fix it.
Unlocking procurement for net zero: overcoming barriers in social housing retrofit
Retrofitting social housing is central to achieving the UK’s net zero ambitions, while improving living conditions and reducing fuel poverty. However, the systems used to procure retrofit programmes are often complex, fragmented, and not well aligned with the scale of delivery required. Our research examines how procurement is shaping the pace and effectiveness of retrofit delivery, and where change is needed to enable progress at scale.
About the research
Drawing on policy analysis and industry insight, this research explores how procurement is shaping retrofit delivery across the UK. It identifies where current approaches are falling short and highlights emerging models that offer a way forward.
The findings are presented through a main report, providing an overview of the procurement challenges affecting social housing retrofit, alongside real examples of how organisations are starting to overcome them.
This is supported by three focused briefs that explore specific challenges and how to address them:
Part 1: Financial constraints: overcoming financial barriers to scaling retrofit
Part 2: Quality assurance issues: strengthening data, skills, and supply chains for effective retrofit delivery
Part 3: Coordination conundrum: overcoming fragmentation to deliver retrofit at scale
Together, these reports provide a clear view of how procurement is shaping retrofit delivery today, alongside practical approaches that can support change.
Explore the full research series to understand how procurement can better enable large scale social housing retrofit, and what this means for policy, delivery and investment decisions.
Unlocking procurement for net-zero: overcoming barriers in social housing retrofits
Part 1: Financial constraints: overcoming financial barriers to scaling retrofit
Part 2: Quality assurance issues: strengthening data, skills, and supply chains for effective retrofit delivery
Part 3: Coordination conundrum: overcoming fragmentation to deliver retrofit at scale
Related articles
Case Study
Geofencing: innovative technology to improve trackside worker safety
Network Rail and Connected Places Catapult won the Safety Award at the Railway Industry Association’s Railway Industry Supplier Excellence awards on 29 June for their work to take forward a new piece of technology known as ‘geofencing’.
Case Study
How SBRI helped Belfast City Council transform problem-solving
This case study explores how the Small Business Research Initiative (SBRI) model enabled Belfast City Council to innovate and transform its approach to problem-solving.
Innovation Procurement
Competency Centres:
Global Models, Value and
Lessons for the UK
Why public procurement fails both public outcomes and high-growth companies: and how to fix it.
Making innovation procurement work in practice
Public procurement is one of government’s most powerful tools, but in the UK ambition too often fails to translate into awarded contracts, real deployments and scaled adoption. The issue is not a lack of innovation. It is an execution gap, with limited capability embedded in live procurements, risk managed too defensively, and adoption issues identified too late.
Innovation procurement competency centres address this gap by focusing on delivery, not guidance. They embed expertise directly into real procurements, reduce delivery risk, convene markets around genuine demand, and build repeatable capability across the public sector.
International evidence shows that training alone does not change outcomes. What works is a mix of clear mandate, hands on support in live procurements, and sustained demand signals that give confidence to both buyers and suppliers.
The UK Procurement Act 2023 creates the flexibility to do this more systematically. The innovation procurement empowerment centre, hosted by Connected Places Catapult, is designed to provide a nationally visible capability that turns intent into action.
The document sets out five clear recommendations for the UK.
- Designate and fund the innovation procurement empowerment centre as the cross government function for innovation procurement, linked to Procurement Act delivery and standards.
- Build a model that can scale, with a national hub for tools and playbooks and embedded support working directly with delivery teams.
- Prioritise live procurements that can reach contract and adoption, using clear conversion measures to avoid activity without outcomes.
- Start with simple metrics that matter, such as time to award, contract conversion, SME participation and value, and strengthen outcome tracking over time.
- Create the right conditions for delivery, including early stage procurement funding, communities of practice and feedback that improves tools and guidance.
Download the full paper to see how we could support innovation procurement across government.
Innovation Procurement Competency Centres: Global Models, Value and Lessons for the UK
Related articles
Report
Place-based Public Procurement for a Low-Carbon Future: Regional Economic Impacts of Retrofitting
This research brief examines how place-based public procurement can accelerate housing retrofit delivery and strengthen regional economic outcomes, using the West Midlands as a case study.
Report
Local approaches to public procurement under the Procurement Act 2023
Public procurement is a powerful lever for shaping local economies, yet it is still too often treated as a compliance exercise rather than a strategic tool.
Place-based Public Procurement for a Low-Carbon Future: Regional Economic Impacts of Retrofitting
This research brief examines how place-based public procurement can accelerate housing retrofit delivery and strengthen regional economic outcomes, using the West Midlands as a case study.
The UK’s ambition to reach net zero by 2050 through large-scale housing retrofits is currently off track across most regions. The analysis shows that, at today’s pace of delivery, particularly for social housing retrofits, many regions are unlikely to meet the EPC Band C target, underlining the need for a significant acceleration in both investment and delivery capacity.
Using City-REDI’s SEIM-UK multi-regional input-output (MRIO) model, the analysis estimates the scale of investment required under three pathways:
- Business as Usual: Retrofitting continues at its current pace. Under this trajectory, the West Midlands is unlikely to meet the net zero target by 2050.
- Net Zero by 2050 Scenario: This scenario assumes the region aligns with the national target of achieving net zero by 2050.
- Net Zero by 2040 Scenario: An accelerated pathway in which the West Midlands achieves net zero a decade earlier.
To assess the importance of place-based supply chains, each scenario is modelled under two alternative procurement approaches:
- Hands-off procurement: No policy intervention to steer contracts towards local or regional suppliers.
- Local procurement: A place-based strategy in which supply chains are increasingly localised to maximise regional economic retention and spillovers.
The results show that procurement strategy is as important as the scale of investment.
- Business as Usual: Local procurement increases West Midlands impact from £1.1bn to £4.9bn in output, from £0.4bn to £2.8bn in GVA, and from 7,000 to 29,000 jobs.
- Net Zero by 2050: A hands-off approach delivers only £3.7bn output and 22,000 jobs to the West Midlands, compared to £16.3bn output, £10.4bn GVA, and 96,000 jobs under local procurement.
- Net Zero by 2040: Regional benefits rise from just £4.2bn output and 25,000 jobs (hands-off) to £13.9bn output, £8.0bn GVA, and 83,000 jobs with local procurement.
Overall, the results show that where the supply chain is located matters as much as how much is spent. Without deliberate place-based procurement, a large share of the economic value of retrofit investment leaks out of the region. The ability to realise these gains depends on the region’s absorptive capacity, including its skills base, supply-chain depth, and innovation capability. This points to the need for a more integrated policy approach that aligns procurement, skills investment, supply-chain development, and green innovation, ensuring that retrofit delivery produces sustained economic, social, and environmental returns, alongside carbon reduction. A detailed version of the analysis, including methodology and full results, is available in the full report here.
Place-based Public Procurement for a Low-Carbon Future: Regional Economic Impacts of Retrofitting
File type: pdf
File size: 2.41Mb
Related articles
Case Study
Geofencing: innovative technology to improve trackside worker safety
Network Rail and Connected Places Catapult won the Safety Award at the Railway Industry Association’s Railway Industry Supplier Excellence awards on 29 June for their work to take forward a new piece of technology known as ‘geofencing’.
Case Study
How SBRI helped Belfast City Council transform problem-solving
This case study explores how the Small Business Research Initiative (SBRI) model enabled Belfast City Council to innovate and transform its approach to problem-solving.
Local approaches to public procurement under the Procurement Act 2023
Public procurement is a powerful lever for shaping local economies, yet it is still too often treated as a compliance exercise rather than a strategic tool.
This two part research series from IPEC, authored by Conrad Parke of the Centre for Local Economic Strategy, explores how procurement can be used more deliberately to support SMEs and social enterprises, strengthen local supply chains, and deliver wider social, economic and environmental value.
The research is set against the introduction of the Procurement Act 2023, in force from February 2025, alongside the updated National Procurement Policy Statement. Together, these reforms create a stronger policy framework that encourages more proportionate, accessible and outcome focused procurement. However, the Act remains permissive rather than mandatory, creating a real risk that progress will be uneven and opportunities missed.
Part 1 Local approaches to public procurement – Birmingham Anchor Network revisited revisits earlier IPEC research on practising innovation in public sector procurement and examines how the Birmingham Anchor Network could take a shared, place-based approach to implementing the new legislation. Drawing on a cross institutional roundtable held in April 2025, it sets out the case for greater coordination across anchor institutions, including clearer definitions of barriers faced by SMEs and VCSEs, shared ambitions for local spend, and a more consistent understanding of what proportionate procurement means in practice.
Part 2 Local approaches to public procurement – evidence from local procurement practices complements this strategic perspective with a practical focus on what can be done now. It presents real world case studies that show what is lawful, workable and already delivering impact, including the use of reserved contracts, contract lots, and the direct embedding of social value into contract design. These examples demonstrate how targeted changes to procurement practice can reduce risk aversion, build confidence, and unlock immediate benefits for local economies.
Taken together, the two briefings show that meaningful change does not need to wait for system wide reform. How contracts are designed matters as much as how much is spent, and smarter procurement can play a central role in driving inclusive growth, strengthening local markets, and accelerating progress towards net zero.
Local Approaches to Public Procurement – Birmingham Anchor Network Revisited
File type: pdf
File size: 2.07Mb
Local Approaches to Public Procurement – Evidence from Local Procurement Practices
File type: pdf
File size: 1.85Mb
Related articles
Case Study
Geofencing: innovative technology to improve trackside worker safety
Network Rail and Connected Places Catapult won the Safety Award at the Railway Industry Association’s Railway Industry Supplier Excellence awards on 29 June for their work to take forward a new piece of technology known as ‘geofencing’.
Case Study
How SBRI helped Belfast City Council transform problem-solving
This case study explores how the Small Business Research Initiative (SBRI) model enabled Belfast City Council to innovate and transform its approach to problem-solving.
How innovation intermediaries support public procurement of innovation
Public procurement accounts for around 14 percent of UK GDP. This gives the public sector significant influence over how new ideas are developed and adopted, and how major societal challenges are addressed. In practice, using procurement to support innovation is often difficult.
In sectors such as healthcare and defence, buyers face strong pressure to reduce costs, work within established frameworks and avoid risk. These conditions can make it hard to introduce new technologies, even where there is clear potential to improve services through tools such as artificial intelligence, robotics or advanced manufacturing.
This research explores the role of innovation intermediaries and the practical value they bring. Drawing on examples from the defence sector and the NHS Health Innovation Network, it shows how intermediaries help public buyers and suppliers work together more effectively. They create space to define problems clearly, test ideas early and support the move from promising concepts to real world use.
Intermediaries help address challenges on both sides of the market. They support research and development activity, run demonstrations and evaluations, and help build the technical and commercial evidence that buyers need to make informed decisions. They also assist with shaping specifications, mentoring teams and navigating unfamiliar processes. In doing so, they help loosen rigid rules and norms that can slow progress, and promote more flexible approaches to contracting and delivery.
By building shared understanding and trusted evidence, intermediaries help reduce risk, sharpen requirements and speed up decision making. This can lead to faster adoption of new solutions, better value for money and improved public services. At the same time, intermediaries often operate with limited authority and resources. The findings point to the need for stronger policy support, and for public bodies to build their own capability to work with intermediaries in a more confident and effective way.
Key findings
- Innovation intermediaries close critical capability gaps by creating shared research and development spaces, producing evidence that informs specifications and tenders, and supporting buyers and suppliers to develop solutions together.
- They help overcome institutional and cultural barriers by working across sectors, mentoring stakeholders, encouraging more flexible contracting approaches, and finding practical ways through rigid procurement processes such as framework agreements.
- They contribute to stronger procurement outcomes, including quicker decisions, clearer requirements, faster adoption of innovation, and reduced or avoided costs, although their impact is limited by constraints on authority and resources.
How innovation intermediaries support public procurement of innovation
File type: pdf
File size: 1.52Mb
Related articles
Case Study
Geofencing: innovative technology to improve trackside worker safety
Network Rail and Connected Places Catapult won the Safety Award at the Railway Industry Association’s Railway Industry Supplier Excellence awards on 29 June for their work to take forward a new piece of technology known as ‘geofencing’.
Case Study
How SBRI helped Belfast City Council transform problem-solving
This case study explores how the Small Business Research Initiative (SBRI) model enabled Belfast City Council to innovate and transform its approach to problem-solving.
Transforming UK public procurement in the post-Brexit era
Public procurement under the Procurement Act 2023 aims to drive innovation and social value through flexible, strategic practices. This brief outlines key lessons for effective implementation.
Public procurement plays a vital role in driving innovation, strengthening supply chains and supporting economic growth across the UK. With the introduction of the Procurement Act 2023 and the National Procurement Policy Statement (NPPS), public authorities are being encouraged to take a more flexible and strategic approach.
This includes engaging early with suppliers, opening opportunities for Small and Medium Enterprises (SMEs) and social enterprises, and using procurement to deliver wider social, economic and environmental benefits.
Our research briefs examine how these ambitions can be realised in practice. It is presented in two parts:
- Part 1: Policy Priorities under the Procurement Act 2023
- Part 2: Lessons for the Procurement Act 2023 from implementation of the Social Value Act 2012
Transforming UK Public Procurement in the Post-Brexit era: Part 1
File type: pdf
File size: 3.25Mb
Transforming UK Public Procurement in the Post-Brexit era: Part 2
File type: pdf
File size: 2.97Mb
Together, these sections explore the key policy goals of the new procurement regime and draw practical lessons from the Social Value Act 2012. The research considers how insights from past reforms can inform the transformation of public procurement practices and capabilities in the post-Brexit era.
The brief identifies five main lessons to support successful implementation of the Procurement Act 2023:
- Appoint Champions: Identify individuals to lead and advocate for the policy priorities within their organisations.
- Develop Political Skills: Equip these champions to influence, educate and secure buy-in from colleagues and decision-makers.
- Build Supporting Infrastructure: Provide policies, toolkits and training to help procurement teams embed the reforms.
- Learn from Practice Leaders: Encourage sharing of good practice from authorities leading the way.
- Collaborate: Enable smaller authorities to work together, share resources and jointly deliver projects.
Related articles
Case Study
Geofencing: innovative technology to improve trackside worker safety
Network Rail and Connected Places Catapult won the Safety Award at the Railway Industry Association’s Railway Industry Supplier Excellence awards on 29 June for their work to take forward a new piece of technology known as ‘geofencing’.
Case Study
How SBRI helped Belfast City Council transform problem-solving
This case study explores how the Small Business Research Initiative (SBRI) model enabled Belfast City Council to innovate and transform its approach to problem-solving.
IPEC Research
The role of government buyers in shaping firm productivity
Authors
Pey-Yu Yuan
Alliance Manchester Business School,
University of Manchester
Raquel Ortega-Argilés
Alliance Manchester Business School
University of Manchester
Elvira Uyarra
Alliance Manchester Business School
University of Manchester
The Role of Government Buyers in Shaping Firm Productivity
Public procurement is a major economic force in the UK, accounting for £385 billion annually. While procurement is widely recognised for its ability to stimulate innovation, create market opportunities, and drive social value, its direct impact on firm productivity remains underexplored. This research brief examines how government contracts influence business performance, analysing trends in procurement income, supplier composition, and the effect of different government buyers—central government, local government, and the NHS—on firm productivity.
Using data from 26,411 UK suppliers between 2016 and 2019, this study uncovers key trends in supplier distribution, sectoral participation, and the non-linear relationship between public procurement and firm productivity. By understanding the dynamics of government purchasing power, both businesses and policymakers can refine their strategies to maximise economic impact and efficiency.
Key Findings
- Supplier Distribution: Local government engages the largest number of suppliers, but central government’s supplier base is expanding the fastest.
- Industry Participation: UK government suppliers are concentrated in low-R&D intensive industries, with high-tech firms significantly underrepresented.
- Procurement Income and Productivity: The relationship follows a U-shaped curve—firms earning either low or high levels of government contracts achieve greater productivity gains than those in the mid-range.
- Government Buyer Influence: Suppliers serving central government and the NHS show stronger productivity growth, whereas local government-only suppliers experience weaker effects.
Implications
For firms, winning contracts is about more than just volume—it is crucial to consider the type of government buyer. Diversifying across multiple government entities can reduce risks, stabilise revenue streams, and improve productivity outcomes.
For policymakers, procurement strategies should move beyond just awarding contracts and instead focus on reducing inefficiencies, supporting diverse supplier participation, and fostering a more innovation-friendly procurement ecosystem.
This research offers data-driven insights for businesses and policymakers navigating public procurement, exploring who supplies the government, how procurement influences firm performance, and which government buyers provide the best opportunities.
The role of government buyers in shaping firm productivity
File type: pdf
File size: 4.47Mb
IPEC Research
Place-based collaborative opportunities and challenges for public procurement of innovation
Authors
Fumi Kitagawa
City-REDI, University of Birmingham
Public procurement is a powerful tool for economic growth, innovation, and social impact. Local governments play a crucial role in shaping regional economies by using procurement strategies to stimulate innovation, create jobs, and deliver social value.
This research brief explores how public procurement can be used strategically to address regional needs, particularly in a time of constrained public resources. The West Midlands serves as a prime example of how procurement policies can drive place-based transformation. The West Midlands Innovation Programme (WMIP) supported Digital Innovation in Public Services (DIPS) project, which presents how a region can create values through procuring innovation. The Innovation procurement partnership model demonstrates how local authorities can foster economic and social values through strategic partnerships. By integrating procurement with local industrial strategies, the region enhances SME participation, promotes green innovation, and delivers measurable social value.
Key Highlights:
- Public procurement acts as a catalyst by connecting public services with cutting-edge technologies and forward-thinking businesses.
- Innovative procurement models are enabling small and medium-sized enterprises (SMEs) to participate in public contracts, fostering economic resilience and job creation.
- The integration of sustainability goals into procurement policies ensures that public spending contributes to the region’s decarbonisation and green growth objectives.
By adopting a place-based approach, local governments can tailor procurement policies to address specific regional economic and social challenges. The findings from the West Midlands serve as a valuable guide for policymakers, businesses, and researchers seeking to maximise the impact of public procurement on regional development.
Place-based collaborative opportunities and challenges for public procurement of innovation
File type: pdf
File size: 4Mb
