The UK's innovation accelerator for cities, transport & place leadership.
_Money is tight. It has been for years in towns and cities up and down the country. Not only have public budgets been significantly cut, they have had to be completely re-imagined. So could a new approach to innovation spending save millions while also unlocking huge market opportunities?
This article featured in the print version of the
Connected Places Magazine
Every year public bodies in the UK spend £300 billion on third party suppliers. In local government alone the figure is £70 billion. A big part of buying goods and services with public money is the question of what to buy and how best to buy it.
Historically, the UK has been very good at this. Since the industrial revolution there has been no shortage of British innovations to tackle a plethora of economic, environmental and societal problems. From game-changing breakthroughs in the railways to the utilities infrastructure that revolutionised public health.
Today, the UK is continuing to make strides in turning great ideas into products and services fit for increasingly complex 21st century challenges. Barriers to entry for smaller companies wanting to try new ideas have reduced, and there is more diversity of thought with different types of innovators entering the market.
Yet obstacles remain.
Too often companies are left trying to sell to customers who are not ready to either purchase or integrate those products and services into their supply chains. So public procurement is broadly perceived to be a problem – a barrier that gets in the way of doing creative and interesting things, the reason not to do anything.
It would be tempting to assume that this is mainly down to red tape – too many rules and regulations getting in the way. Yet research shows that the problem is not regulation or legislation, but culture.
According to the Confederation of British Industry (CBI) only 5% of CBI members feel that procurement incentivises innovation. Members were also of the view that it isn’t the rules themselves are the problem but the way they are being applied.
“Sometimes local authorities fall into a trap of trying to do everything themselves”, says Rikesh Shah who runs the Innovation Procurement Empowerment Centre (IPEC), a support programme focussed on bringing innovation through public procurement.
“But public bodies need to work with the market, and a good starting point is to define the problem first, then go out to the market with a mission-focused approach so that you have the right conditions to successfully scale from the get-go.”
Rikesh Shah who runs the Innovation Procurement Empowerment Centre (IPEC)
It mostly comes down to a lack of awareness amongst buyers in the public sector about what is possible, and a lack of confidence to experiment.
There can also be a large aversion to risk. This goes hand in hand with the fear of failure. Of course, change is hard, especially in the public sector. It is also difficult to do anything new at scale. So naturally, senior administrators worry about what the media or their political leaders might say.
Ultimately it comes down to winning hearts and minds.
Of course, there is a lot of hype out there about new and disruptive technologies, so it is vital that public sector bodies are intelligent clients. “If robotics or AI is the answer, great – let’s test it”, says Shah. “But my starting position is always: ‘Have we clearly articulated the problem?’ Only then should we go to the market for a solution.”
Horizon scanning is also important. The assets that public bodies procure today may still be around in many years’ time. So future-proofing spending on new assets, as well as understanding the totality of potential use cases is even more necessary in a time of rapid technological change.
One of the ways that the Connected Places Catapult is removing some of these obstacles is by linking UK companies with large public infrastructure bodies. For example an accelerator programme with National Highways to test new solutions for reducing the disruptive impact of roadworks.
The experience gives SMEs direct access to a large public contracting body and its Tier 1 suppliers which it otherwise would never have. One of the SMEs on the programme was RoboK, a computer vision company that uses AI to interpret video and CCTV in industrial workplaces. For their CEO, Hao Zheng, the accelerator was a chance to tweak and configure their product to the needs of a large public buyer in ways that would not have been obvious without direct access.
For RoboK it was a game changer. Speaking on the Connected Places Podcast, Zheng concludes, “At the end of the day a better product that delights the customer is going to be the one that sells.”
Further Listening
To hear more of the RoboK story, listen to the podcast episode, “What next for innovation-friendly procurement?”
The Procurement Act 2023 comes into force in October 2024! To mark the occasion, IPEC is launching a month-long campaign examining the power of innovation in procurement. This will include sharing key insights, tools, and resources to help you transform your processes and maximise efficiency. Follow them on LinkedIn for all of the latest updates.
