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How to measure procurement with innovation surveys

Authors

Elvira Uyarra
University of Manchester

Oishee Kundu
University of Manchester

Pei-Yu Yuan
Alliance Manchester Business School

Xin Deng
Alliance Manchester Business School

Raquel Ortega-Argilés
Alliance Manchester Business School

Public procurement holds significant potential to drive innovation across industries. Despite its importance, the role of public procurement in fostering innovation is underrepresented in the UK Innovation Survey (UKIS). Enhancing this tool to capture procurement’s impact can yield vital insights for achieving goals such as sustainability, healthcare advancements, and economic resilience.

Key areas where improved procurement data is critical include:

• Policymaking: Robust data is needed to understand how public contracts incentivise innovation in high-impact areas.
• Measuring green innovations: With increasing focus on sustainability, it is crucial to track whether public procurement supports environmentally friendly technologies and processes.
• Reducing barriers for SMEs: Small and medium enterprises (SMEs) face unique challenges in accessing public procurement opportunities, limiting their ability to innovate through government contracts.

Innovation Procurement Empowerment Centre commissioned experts from the University of Manchester to develop evidence-base that would inform procurement processes and unlock the full potential of government spending to drive the transformation of UK economy. This research brief highlights several gaps in current edition of UKIS, which limit the understanding of procurement’s role in stimulating innovation. To address this, the following steps are recommended:

1. Reintroduce and Expand the Survey Questions: Reinstate and broaden procurement-related questions to include details on contracts, revenue from public procurement, and innovation outcomes such as R&D investments or process innovation.
2. Include Sustainability Metrics: Introduce questions specifically targeting green procurement practices to align with the UK’s net-zero and sustainability objectives.
3. Ensure Inclusivity: Extend questions to all firms engaging with public procurement, not just those identifying cooperation with public entities, to minimize underreporting.
4. Capture Barriers to Innovation: Explore challenges like contract complexity and competition, particularly for SMEs, to inform reforms that enhance innovation outcomes through public procurement.

By addressing these gaps, policymakers can better understand how public procurement fosters innovation, ultimately enabling the design of more effective policies that align with broader economic and sustainability goals.

How to measure procurement with innovation surveys: recommendations for the UK Innovation Survey

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Procuring innovation playbook

The Procuring Innovation Playbook is your go-to guide for breaking down procurement myths and unlocking innovation opportunities

The Procuring Innovation Playbook is your go-to guide for breaking down procurement myths and unlocking innovation opportunities. It provides practical solutions to overcome procurement barriers, explores innovation pilots, outlines diverse procurement routes, and offers insights on designing effective evaluation criteria—alongside successful case-studies and much more.

This playbook is tailored for procurement professionals, innovators, decision-makers, and public sector teams ready to:

• Explore innovative solutions to pressing challenges.
• Build partnerships with innovators and SMEs.
• Navigate procurement rules while fostering creativity.

What you’ll gain:

• A clear understanding of common myths that limit innovation.
• Understanding of how to use Pre-Market Engagement (PME) to uncover untapped opportunities.
• Strategies for running successful trials and scaling them responsibly.
• Guidance on leveraging flexible processes and frameworks to attract SMEs and spark creativity.
• Tools to design contracts and KPIs that reward collaboration and innovation.

Download the playbook now to access practical steps to build a future-ready procurement strategy, expert advice on navigating procurement rules while fostering innovation, and tools to manage risks while achieving transformative results.

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Download a PDF of this page for quick and easy access anytime!

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Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy

Authors

Conrad Parke

Centre for Local Economic Strategies (CL

The city of Birmingham is using public procurement to address its socioeconomic challenges and make its local economy more equitable. In this research brief, “Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy (Part 2),” Conrad Parke from the Centre for Local Economic Strategies (CLES) builds on the work outlined in the previous brief, “Working with the Anchor Institutions (Part 1),” to examine the practical application of innovative procurement strategies.

As the coordinator of the Birmingham Anchor Network, Conrad has been working closely with procurement managers and officers from the Network partners, and this brief captures lessons and insights from their collaborative efforts to foster inclusive growth in East Birmingham.

The previous brief (Working with the Anchor Institutions. Research brief no. 11/2024 – 4) introduced the concept of anchor institutions—large public sector organisations with substantial local influence—as key players in driving economic inclusivity and highlighted the barriers to embedding social value in procurement. This brief (Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy. Research brief no. 11/2024 – 5) focuses on the implementation of these ideas in East Birmingham, an area with significant socioeconomic challenges and a local economy dominated by micro-enterprises.

Through initiatives such as hyper-local spending, simplifying procurement processes for smaller contracts, and fostering direct connections between anchor institutions and local businesses, the Birmingham Anchor Network is piloting approaches to address these barriers. This brief highlights the practical challenges encountered, the innovative solutions being tested, and the potential for these efforts to transform public procurement into a tool for equitable economic growth. This brief also offers an understanding of the practical application of procurement strategies, showcasing their potential to support local businesses, create jobs, and build resilient communities.

Key Points from the Brief:

• Socioeconomic Challenges in East Birmingham: Despite Birmingham’s overall economic growth, East Birmingham faces significant challenges, including high unemployment, widespread deprivation, and a business landscape dominated by micro-enterprises with fewer than nine employees. These issues underscore the need for targeted procurement strategies to foster inclusive growth.
• Challenges in Procurement Practices: The brief identifies institutional barriers, such as cost-driven decision-making, risk aversion, and resource limitations, which hinder small businesses from accessing opportunities within public sector supply chains.
• Hyper-Local Spending Initiatives: The Birmingham Anchor Network is piloting approaches to direct procurement opportunities toward businesses in specific neighbourhoods, aligning public spending with local economic needs.
• Simplifying Procurement Processes: Efforts are being made to reduce the complexity and burden of procurement processes for smaller contracts, enabling micro-enterprises and social enterprises to participate more effectively.
• Building Business-Institution Connections: The initiative emphasises fostering relationships between anchor institutions and local businesses through “Meet the Buyer” events and sharing local business intelligence to increase engagement.
• Enterprise Support Initiative: Funded by the Shared Prosperity Fund, this 14-month project focuses on testing innovative procurement solutions while providing targeted support to local businesses to help them navigate public procurement processes.
• Challenges in Procurement Practices: The brief identifies institutional barriers, such as cost-driven decision-making, risk aversion, and resource limitations, which hinder small businesses from accessing opportunities within public sector supply chains.
• Testing Collaborative Solutions: The Network is experimenting with strategies like shared procurement needs across institutions, import replacement, and progressive ideas such as breaking down large contracts into smaller, more accessible “lots.”

Practising Innovation in Public Sector Procurement: Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy

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Practising Innovation in Public Sector Procurement

Authors

Conrad Parke

Centre for Local Economic Strategies (CLES)

As the Co-ordinator of the Birmingham Anchor Network, Conrad has been working with the procurement managers and officers from each of the Network partners, and the following two briefs will capture some of the learning from this experience:

Part 1: Working with the Anchor Institutions

The first brief (Working with the Anchor Institutions. Research brief no. 11/2024 – 4) introduces the concept of anchor institutions—major public sector entities with substantial local influence—as catalysts for economic inclusivity, highlighting the potential benefits of innovative procurement in Birmingham. The brief explains how standard public sector procurement practice needs to change and, in particular, innovate if the potential of public sector spend is to be truly unlocked for greater economic benefit.

Part 2: Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy – coming next week

The second brief (Mobilising the Power of Local Spending – East Birmingham Inclusive Growth Strategy. Research brief no. 11/2024 – 5) will delve into the practical application of the Anchor Institutions within East Birmingham, the city area facing significant socioeconomic challenges. The brief outlines some of the practical barriers and the innovative procurement approaches they are now trying to introduce.

Together, these two pieces underscore the transformative potential of innovative procurement policies in supporting small local businesses, fostering job creation, and distributing economic growth more equitably. These two pieces provide valuable insights into the policy framework and the practical hurdles of embedding social value in public procurement.

Key Points from the First Brief

• Anchor Institutions as Economic Catalysts: Anchor institutions, such as universities, hospitals, and local authorities, are positioned as significant economic drivers capable of fostering local growth by prioritising spending with local businesses and SMEs.
• Birmingham Anchor Network’s Approach: In Birmingham, the Anchor Network is piloting a collaborative response to the Procurement Act, aiming to develop a consistent approach to make it easier for SMEs to engage in procurement opportunities. This collective response includes defining shared barriers and coordinated solutions across anchor institutions.
• Barriers to Innovative Procurement: The brief highlights barriers to innovative procurement, such as procurement processes heavily focused on compliance, cost-saving priorities, and risk aversion, often excluding smaller, local businesses from participating.
• Lessons from the Past and Future Directions: The brief reflects on lessons from the Public Services (Social Value) Act 2012, emphasising the need for clear, unified approaches to avoid market fragmentation and genuinely supporting local enterprises with social value missions.
• The Role of the 2023 Procurement Act: The Procurement Act is seen as an opportunity to encourage innovative procurement practices, emphasising local economic benefits and reducing barriers for small businesses. However, the Act’s vague language may lead to varied interpretations, creating inconsistencies across institutions.

Download the full publication below.

Practising Innovation in Public Sector Procurement: Working with the Anchor Institutions

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Catapult convenes smart city leaders at global congress in Barcelona

Twenty-five organisations from Great Britain including some of our largest metropolitan authorities gathered at the UK Pavilion.

Twenty-five organisations from Great Britain including some of our largest metropolitan authorities gathered at the UK Pavilion – hosted by Connected Places Catapult – inside Barcelona’s Gran Via conference centre between 5 and 7 November. 

They were there for three days of networking and to discuss the latest technologies and thinking designed to improve transport, housing and communications in and around cities. 

25,000 attendees representing over 800 cities from across the globe were in Barcelona for the event; looking to better understand what is new and emerging in urban innovation. 

“It’s great to be in Barcelona. Three years ago, I was here as part of a UK Government delegation and there was no UK stand at all. We said we really need to be here, and here we are. For us it’s about bringing together UK cities to showcase what they’re doing in terms of innovation and data in the UK.” 

Connected Places Catapult’s Chief Executive, Erika Lewis

Making the trip out to Barcelona allowed attendees from the UK, she added, to “get to see what all of the other countries around the world are doing, understand how they’re approaching innovation, and how they’re using data.” 

Erika added that the Government has committed to invest in the UK’s infrastructure over the coming years; around new towns, roads and new ways of thinking about transport. “With that brings lots of opportunities about how we can think about innovation and how it is used to build places and spaces.” 

She added there is a lot that can be done very quickly to better understand how data can be harnessed for the common good, such as through the Digital Twin Hub, and how procurement can be used to encourage innovation.

“We can’t have growth without innovation – the world is moving through a fourth Industrial Revolution and the cities that harness innovation the best will achieve growth.”

Ben Russell, the Head of Investment Zones at the Department for Business and Trade

He explained that Investment Zones – where clusters of companies can work collaboratively on innovations in multiple locations – help bring people together to generate growth and opportunity. 

“It has been fantastic pulling everyone together under one stand here in Barcelona, and seeing lots of friendly faces from around the regions,” he later said. “Creating spaces for innovation is where success lies.” 

During the event, Connected Places Catapult hosted 15 partners, 25 organisations and welcomed over 650 visitors to the UK Pavilion. Twenty panel sessions were held at the UK Pavilion, featuring over 70 speakers; plus there were two networking events. 

Among the sessions was a focus on smart cities as a driver for international collaboration, featuring a look at Belfast’s innovation twinning collaboration with Sejong in the Republic of Korea; which is supported by the Catapult. 

“Having a smart cities programme allows innovators to foster relationships, and we have been bombarded by requests to engage,” said Belfast Innovation Commissioner, Dr Adrian Johnston MBE during a panel discussion. 

Deirdre Ferguson of Belfast City Council added that the Catapult helped Belfast to understand what it has in common with Sejong, and develop a positive international relationship that has “escalated at a pace we have never seen before”. 

“It’s been really positive working with the Catapult and showcasing Manchester to the world. And it’s really good for us to be here as part of all the UK cities to really show off what we’re doing well; but also to learn from other cities. Connected Places Catapult enables us to know who’s doing what, and to share that best practise.”

Manchester City Council’s Digital Strategy Lead, Sherelle Fairweather

Read about the work of the DT Hub.

Read more about the thoughts of some of the cities and regions at the UK Pavilion.

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Transparency on the reporting of public procurement information

Authors

Maria Fernanda Ibarra Gutierrez

University of Manchester

Dr. Luis Ospina-Forero

University of Manchester

Prof. Elvira Uyarra

University of Manchester

With the public sector spending £400Bn per annum, and the need to deliver more for less across local, regional and national government, the need to better understand how money is being spent is absolutely necessary for reasons such as:

•    Procurement markets and trends monitoring: Governments can describe spending and time trends, and compare performance across entities, regions, contract types, etc.

•    Data-driven procurement policy-making: Governments can assess efficiency gaps to identify areas for reform, monitor the impact of new policies, and understand potential trade-offs of different strategies.

•    Transparency and accountability: Civil society can monitor the procurement system.

Another important aspect is to understand where the opportunities for innovation lie through identifying where procurement-powered innovation has created new value, whether it’s through open innovation challenge calls or other means. Owing to the challenges around reporting, this has proven to be a challenge.

IPEC Research, a centre funded by the Innovation Procurement Empowerment Centre, commissioned a paper through experts from the University of Manchester to identify some key barriers affecting the transparency of public procurement information in the UK, including data quality issues such as lack of unique identifiers, duplicated records, inconsistent dates, and missing data fields.

The paper makes the argument that improvements in data collection, quality, and availability in public procurement is important to support accountability, transparency and to inform policy reform.

The authors found three main challenges:

• No central repository to publish a call (there are several) with inconsistent recording periods.
• Many fields are left blank by the buyers.
• The procurement data doesn’t provide an end-to-end flow from pre-information to contract award and expenditure.

The report suggests that it is important to improve the collection, compilation, quality, storage and availability of procurement information. The authors argue that the Act will address some of the problems mentioned in the report. For instance, there will be a platform for suppliers to register and store their details to avoid having different names for the same suppliers. Also, there are plans in the Act  to join into a single database the information to centralise procurement data.

Download the full publication below.

Transparency on the reporting of public procurement information: lessons from handling compiled procurement information

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Leveraging Public Procurement to Drive Local Innovation

In an era of complex societal challenges and rapid technological advancement, governments are constantly seeking innovative ways to address public needs and stimulate economic growth.

Authors

Dr Chloe Billing

Research Fellow at the University of Birmingham

In an era of complex societal challenges and rapid technological advancement, governments are constantly seeking innovative ways to address public needs and stimulate economic growth. One powerful yet often overlooked tool at their disposal is public procurement. With public expenditure on goods and services accounting for 10-15% of GDP in OECD countries, strategic use of this purchasing power has the potential to catalyse groundbreaking solutions and drive innovation across various sectors.

This research briefing investigates the intersection between public procurement and innovation policy. The study explores how governments can harness their buying power to not only meet immediate needs but also foster a culture of innovation in the private sector. By acting as lead customers, catalysing new solutions, and employing strategic procurement techniques, public authorities can create a ripple effect of innovation that extends far beyond the initial purchase.

The research examines several key aspects of innovation-driven procurement, including:

• Theoretical foundations and real-world evidence supporting procurement as an innovation policy instrument
• Factors influencing procurement’s impact on innovation, including scale, technical capacity, and political considerations
• International case studies showcasing successful implementation across sectors like healthcare, energy, and transport
• The role of emerging technologies in enabling more transparent, efficient, and innovative procurement practices
• An analysis of the UK’s new Procurement Act as an opportunity to embed innovation in public purchasing

The work also highlights the challenges faced in realising procurement’s full potential as an innovation driver. From risk aversion to fragmented budgets, the study offers insights into overcoming these barriers and provides recommendations for policymakers and public sector leaders.

As we navigate an increasingly complex world, the strategic use of public procurement presents a unique opportunity to address pressing societal needs whilst simultaneously fostering innovation and economic growth. This research offers in-depth analysis and recommendations for harnessing public procurement as a catalyst for innovation.

Leveraging Public Procurement to Drive Local Innovation

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Public Procurement of Innovation: Impacts, Evidence, and Methodological challenges

Public procurement, representing around 12% of GDP in OECD countries, is increasingly recognised as a powerful tool for driving not only innovation but also broader goals like sustainability and economic development.

Authors

Dr. Oishee Kundu

University of Manchester

Prof. Elvira Uyarra

University of Manchester

Public procurement, representing around 12% of GDP in OECD countries, is increasingly recognised as a powerful tool for driving not only innovation but also broader goals like sustainability and economic development.

This research brief synthesises research findings on the impacts of PPI, looking at both theoretical and empirical evidence, as well as methodological challenges in studying its effects.

Public procurement has the potential to shape innovation by:

• Creating demand for new technologies and services (demand-pull effects).
• Facilitating the diffusion of innovations.
• Encouraging firm-level investment in R&D.
• Influencing market structures to support new products and innovations.

Studying PPI involves several complexities, including:

• Defining what constitutes innovation-oriented procurement.
• Establishing clear causality between procurement actions and innovation outcomes.
• Addressing issues related to data access and transparency.

Further research should aim to:

• Improve data collection and linkages.
• Focus on long-term impacts. Explore the effects of PPI across different regions and sectors.

Download the full publication below.

Public Procurement of Innovation: Impacts, Evidence, and Methodological challenges

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Navigating public sector procurement

Procurement in the public sector can be a challenging landscape, especially when introducing innovative technologies.

At a recent panel discussion co-organised by IPEC and Digital Leaders, experts shared valuable insights on overcoming these challenges and driving successful outcomes.

Effective governance is key to fostering innovation. Elizabeth Vega OBE, Group CEO of Informed Solutions, highlighted that governance should be agile and adaptive, supporting decision-making processes that prioritise outcomes over rigid procedures. This approach encourages transparency and collaboration, as demonstrated by her organisation’s practice of keeping key subcontractors visible to the client. “Governance should be an enabler, not a blocker,” she noted, emphasising the importance of flexibility in governance structures.

A crucial element of innovation is creating a culture where diverse perspectives are welcomed. Elizabeth emphasised the importance of an environment where “people feel safe to express their beliefs in a constructive way,” allowing for respectful yet challenging discussions that can lead to real change. She added, “Innovation thrives where there’s psychological safety, enabling people to question the status quo without fear.”

Demonstrating value through case studies is another essential strategy. Elizabeth noted that while a single case study might not cover all bases, multiple case studies can collectively highlight relevant aspects of a solution, reducing perceived risks and showcasing capabilities to potential clients. “It’s not about one perfect case study; it’s about a portfolio that tells the full story,” she explained.

Flora McFarlane, Head of Growth & Partnerships at VivaCity, shared her approach to overcoming challenges by securing early adopters who are eager to innovate, such as Oxfordshire and TfL. These cornerstone clients played a critical role in validating their technology, making it easier for more risk-averse clients to consider adoption. Flora stressed the importance of understanding procurement teams’ needs and constraints, and working closely with them to navigate obstacles. “We had to be patient and persistent, demonstrating our value in every conversation,” she said, highlighting the importance of perseverance in the public sector landscape.

Darren Kelly, Central Government Capture Lead for UK Public Sector at Amazon Web Services (AWS), highlighted the need for early engagement and education to align procurement teams with the specific solutions being considered. He pointed out, “The procurement manager is an expert in the procurement process and not necessarily an expert on what they’re buying,” underscoring the value of clear communication and collaboration early in the procurement cycle. Darren also stressed, “If you engage early, you get to shape the conversation. It’s all about building trust and educating the buyer about your solution.”

The new Procurement Act 2023 offers opportunities for more flexible frameworks, which could greatly benefit both suppliers and buyers. Darren noted that open frameworks extending up to eight years can provide the flexibility needed to accommodate evolving technologies like AI and cloud services, allowing for new suppliers to be added as needs change. “These longer frameworks allow for a dynamic marketplace that can evolve with technology, rather than being locked into outdated solutions,” he commented.

Legal insights from Jenny Beresford-Jones and Shailee Howard from Mills & Reeve, added another layer of strategic advice. Jenny stressed the importance of staying updated with legal changes to gain a strategic advantage, while Shailee highlighted the value of not just meeting legal requirements but strategically planning engagement with the procurement process to maximise opportunities for innovation. Shailee noted, “Understanding the legal landscape isn’t just about compliance; it’s about leveraging the rules to create better opportunities.”

The discussion also touched on the delicate balance between innovation and alignment with organisational goals. Elizabeth suggested techniques such as empowering individuals to speak up, building skills alongside implementing solutions, and maintaining regular touchpoints to monitor cultural and emotional alignment, not just compliance metrics. She summed up by saying, “It’s about ensuring that innovation aligns not just with the letter of the law but with the spirit of the organisation’s mission.”

In summary, the panellists underscored the importance of building long-term relationships, understanding the unique dynamics of public sector procurement, and consistently demonstrating value through transparent and flexible approaches. As Rikesh Shah, Head of IPEC, summed up, the key to success lies in understanding the service owner’s problems, building lasting relationships, and focusing on creating long-term value over many years through innovation.

IPEC is currently partnering with four local authorities, addressing some of the key industry challenges and helping them find solutions through innovative procurement strategies. We are keen to hear from local authorities about some of the challenges they are currently facing as they look ahead into the next year. Reach out to us at ipec@cp.catapult.org.uk