Innovating Through Public Procurement, a UK – Brazil Combined Effort for Economic Recovery and Sustainable Growth

The COVID 19 crisis has amplified the need for innovative solutions and governments are responding by deploying public procurement tools. We have partnered with FCO Brazil to conduct a report on the benefits of Innovation Procurement to boost innovation and ensure value for money.

Using Procurement to Innovate

Different levels of government both in Brazil and in the UK are facing massive challenges to ensure the delivery of efficient public services whilst having to deal with massive constraints in public finances and other obstacles such as outdated legislation and bureaucracy.

However, there are plenty of alternatives to address these challenges and use procurement as a tool to deliver better public services and support the economy to grow at the same time. Governments should consider how to create markets, not just procure to them. Non-traditional procurement structures like Requests for Innovation can make it easier to find and implement new and better technologies. The strategic deployment of innovative procurement is indispensable to the delivery of robust and high quality public services. It is also a powerful catalyst that can energise innovation through the whole economy.

Connected Places Catapult is engaging with experts and representative bodies from across the public procurement ecosystem to challenge the myths surrounding public procurement, share pioneering practice, set out new pathways and outline best practice for the procurement of innovative solutions by the public sector.

Don’t Blame the Law

Fulfilling the expectations of citizens and tackling global issues such as the negative effects caused by climate change is a shared challenge facing public authorities both in Brazil and in the UK. Ask pioneering place leaders why they are not harnessing the creativity of the market to solve their pressing service and policy challenges and you will often get the response –“procurement policy doesn’t allow it”.

The COVID 19 crisis has amplified the need for innovative solutions and shown that the public sector already has the ability to deliver. Many governments in Brazil and in the UK are responding to the epidemic by deploying innovative procurement tools, and there is an opportunity to translate this increased openness to innovation into a “new normal”. Legislation is often cited as an inhibitor of good innovative practice. However, many rule makers have acted to dispel perceived legal constraints. They have not inhibited COVID-19 responses. Indeed, rule makers have explicitly encouraged the use of existing legal tools and broadcast their flexibility.

Creating a Market

Governments should consider how to create markets, not just procure to them. They can create regulatory environments or concession models to generate markets that serve the public good.

Innovative procurement boosts innovative capabilities around the customers’ community. Commissioners become market makers, set technology challenges, fund demonstrator projects and mentor innovative enterprises to scale up their developed products. Procurement contests are evolving into “co-creation projects”, with citizens invited to submit ideas for unmet needs. There is extensive collaboration between commissioners searching for solutions to common problems.

Open procurement contests and “co-creation projects” are a natural evolution in an innovative public sector. Citizens can be asked to identify their unmet needs and invited to offer solutions. Modest budgets can fund feasibility studies of the most promising ideas. Universities and research institutes can be engaged to support. They can be organised at all levels of activity – from villages, to cities, even to countries. They demonstrate that public authorities are engaging with citizen’s concerns and are open to change. In a continuing drive for cost reductions and better outcomes, public authorities have been stepping up procurement collaboration, organising procurement challenges to meet shared outcomes.

Progressive cities across the globe are already developing innovative organisations and are becoming leaders in deploying innovative procurement. They have developed a strong understanding of how technology can address their problems and are often moving ahead of national governments. They want to accelerate investments in technology and are eager to be good business partners to start-ups and SMEs.

UK’s Best Practices

Over the last decade, the UK has implemented major reforms in Government Procurement, building best practice capabilities and standards. The UK has also built a world leading organisation to deploy Digital Services and is a leading proponent of innovation procurement among large economies. Small innovative companies now have a much enhanced role as suppliers to the UK public sector.

The Government Digital Service (GDS) leads the UK Civil Service digital function. It was launched in 2011 with the objective of accelerating the adoption of digital technologies across the UK public service. Since then it has become globally recognised for delivering one of the leading digital government transformation programmes in any large economy.

The Scottish Government encourages innovation through local procurement rules. It has developed the successful CivTech challenge, integrating idea generation, solutions development, business mentoring and public administration capacity building.

Opportunities for Brazil

Opportunities are identified for Brazil to embrace innovation procurement to enhance its economic competitiveness. A significant 2016 policy initiative, Marco Legal da Ciência, Tecnologia e Inovação, provides an excellent launch platform. Policy leadership would have a catalytic effect on innovative behaviour across the public sector. Integrating and supporting city and regional administrations in innovative procurement would raise its profile, engage citizens and nurture new suppliers.

This could be enhanced through a vehicle based on the CivTech, underpinned by an innovation and sustainability requirement in all public tenders. Best practice could be disseminated through establishing national, regional and city hubs. Connected Places Catapult and other UK experts can advise in all these areas.

Innovative procurement will be a key mechanism to support cities in Brazil to test, deploy and implement new technologies in areas such as water efficiency, urban traffic control systems, intelligent street lighting, and open data management. Best practice exchanges and the potential for shared solutions could be fostered through establishing “city labs” in the UK and in Brazil.

A Starting Point for Long-Term Collaboration

The UK and Brazil have a long lasting partnership on trade and innovation. The current partnership on future cities between both countries supported by UK’s Prosperity Fund is a clear example of our joint drive to make cities smarter, safer and better for all.

The report “Public Procurement for Innovation: Sharing the UK Experience and Best Practices” sponsored by the Opportunities Fund and the Science and Innovation Network from the UK government and prepared by Connected Places Catapult provides the framework for an ongoing dialogue and exchange of ideas between the UK and Brazil on innovative procurement.

New initiatives and partnerships will emerge in the near future enhancing both countries public services innovation and supporting both economies to a path of sustainable growth and resilience after the COVID19 shock.

Written by Guilherme Johnston, Head of Global Partnerships, Connected Places Catapult