Towards a measurement framework for innovation procurement

Public procurement represents around 13% of GDP across OECD countries and roughly one-third of UK public spending, giving it significant potential to support innovation-led growth. However, the UK still lacks consistent data and evaluation evidence on how procurement enables the adoption, diffusion and scaling of innovation. This report responds by proposing a measurement framework organised around five related dimensions. The first three form a continuum of increasing organisational commitment: innovation-friendly procurement, procurement for innovation, and procurement of innovation. Two further dimensions, mission-oriented procurement and innovation within the procurement function itself, cut across this lifecycle.

Key Findings

1. Innovation procurement measurement framework.
The framework distinguishes between procurement practices that avoid excluding innovation, procurement instruments that actively stimulate innovation, innovation-related procurement outcomes, mission-oriented uses of procurement, and innovation in procurement operations.

2. Translation into measurable indicators.
Examples include functional specifications, early market engagement, flexible procedures, criteria-based award methods, SME/start-up suitability, explicit innovation targets, supplier-retained intellectual property rights, PCP-type contract structures, patents, R&D-related outcomes, repeat or coordinated procurement, mission directionality, policy-mix coordination, long-term commitment, and the use of digital or AI tools.

3. Measurement is possible, but data quality varies.
Many capability, process and policy indicators can be derived from procurement data and tender or contract text, using validated keyword dictionaries. Outcome indicators require links to external R&D, patent or firm-level data and should be treated as descriptive proxies rather than causal evidence. Mission-oriented indicators are easier to verify through stated intent than through systemic impact.

Why It Matters

A shared measurement framework would help reduce conceptual fragmentation and support more systematic monitoring of procurement reforms, including new UK procedural flexibilities such as the competitive flexible procedure. The proposed indicators could underpin an early diagnostic dashboard, helping buyers, policymakers and researchers identify where procurement practice supports innovation, where barriers remain, and how practice changes over time.

Looking Ahead

Pilot the indicator dashboard using Central Digital Platform data.
Validate text-based indicators through manual coding and robustness checks.
Link procurement data to external R&D, patent, firm-level and adoption data where possible.