IPEC Research

Extracting Insights from Procurement Data

Authors

Annum Rafique
City-REDI, University of Birmingham

Pei-Yu Yuan
Alliance Manchester Business School

Understanding trends in public sector spending, supplier engagement, and funding allocation effectiveness is crucial in building trust in the government. A comprehensive understanding of procurement contracts enhances accountability and provides actionable intelligence for policymakers and stakeholders, enabling them to assess the effectiveness of procurement strategies and monitor progress toward sustainability goals.

 This research brief explores the methodological approach of text mining and using it for procurement contract analysis. The approach focuses on keyword-based filtering and data extraction to identify relevant contracts, providing a practical approach for researchers, policymakers, and stakeholders without specialised expertise in natural language processing (NLP) or machine learning.

Using the methodology, we analysed structured data from Tussell database for the year 2022, examining social housing retrofitting contracts in the West Midlands. To gain a deeper understanding of the procurement landscape in the West Midlands Combined Authority (WMCA) area, a subregion within the broader West Midlands, refer to the IPEC publication: “Retrofitting Social Housing in the West Midlands Combined Authority (WMCA) Area”. This report by Annum Rafique (2025) provides valuable insights into procurement challenges, supply chain dynamics, and policy considerations specific to the region.

Applying the text mining methodology to Tussell’s procurement data provided several key insights:

• Single-Supplier Contracts: Most procurement contracts involved only one supplier, limiting multi-supplier collaborations.
• Short-Term Contracts: The majority of contracts had a duration of one year or less, which is a challenge for long-term retrofitting projects.
• Regional Supplier Distribution: Many contracts were awarded to suppliers outside the West Midlands, indicating potential gaps in local supplier capacity.
• SME Participation: 65% of suppliers were SMEs, showing a positive trend toward engaging smaller firms in retrofitting projects.

These findings provide a data-driven foundation for improving procurement strategies, enabling policymakers to extend contract durations, support regional supplier development, and enhance SME participation. The insights derived from this methodology support evidence-based decision-making and reinforce procurement as a strategic tool for driving innovation, economic resilience, and the transition to a low-carbon economy.

Extracting Insights from Procurement Data – A Text Mining Approach for Social Housing Retrofits in the West Midlands

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IPEC Research

The role of public procurement on the performance of Knowledge-intensive business services

Authors

Xiuqin Li
Alliance Manchester Business School

Xin Deng
Alliance Manchester Business School

Elvira Uyarra
University of Manchester

Knowledge-Intensive Business Services (KIBS) are the cornerstone of innovation in a knowledge-based economy. Acting as facilitators, carriers, and sources of innovation, KIBS firms play a pivotal role in enhancing both public and private sector capabilities. These services encompass a wide range of expertise, from accountancy and management consultancy (Professional KIBS or P-KIBS) to IT and R&D services (Technology-based KIBS or T-KIBS).

Public procurement offers an invaluable opportunity for fostering innovation through KIBS. By serving as suppliers to government agencies, KIBS firms contribute to technological advancements, public service transformation, and regional economic growth. Our research analyses the dynamics of KIBS engagement in UK public procurement from 2016 to 2022, shedding light on patterns, trends, and opportunities.

Key Findings:

• Innovation Amplification – KIBS suppliers show significant innovation, particularly in digital and technological domains. This is evident in their strong representation in computer programming and management consultancy services.
• Typological Dynamics – Firms providing IT, engineering, and R&D services (T-KIBS) excel in central government procurement, meeting technical and digital demands. Accountancy and consultancy services (P-KIBS) support broader management and administrative needs across various government levels.
• Geographical Patterns: KIBS suppliers are predominantly concentrated in London, benefiting from urban networks and knowledge spillovers. However, non-KIBS firms display broader regional dispersion, particularly in the Southeast.
• Sectoral Growth: T-KIBS suppliers have seen robust growth, reflecting the increasing digitalization of public sector operations, including the adoption of AI and cloud technologies.

To maximise the contributions of KIBS, especially SMEs, to public procurement and innovation, the following strategies are essential:

• Streamline Procurement Processes: Simplify access for SMEs by reducing procedural barriers and enabling smaller contract lots.
• Focus on Innovation: Embed criteria that prioritise innovative solutions in public contracts.
• Promote Regional Participation: Encourage the involvement of regional KIBS firms to address geographical imbalances and foster local innovation ecosystems.

KIBS firms hold immense potential to drive innovation, economic growth, and public service transformation. However, achieving this requires a nuanced approach that balances the strengths of T-KIBS and P-KIBS, promotes regional diversity, and ensures sustainable procurement practices. By addressing these challenges, public procurement can unlock the full potential of KIBS to reshape the innovation landscape.

Exploring the roles of public procurement on the performance of Knowledge intensive business services (KIBS)

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IPEC Research

Retrofitting Social Housing in the West Midlands Combined Authority (WMCA) Area

Authors

Annum Rafique
City-REDI, University of Birmingham

The UK is at a critical point in its transition to a net-zero future, with one of the most urgent challenges being the retrofitting of social housing to transform them into energy-efficient, low-carbon homes to meet the 2050 net-zero targets. While the benefits of this transition are apparent (lower emissions, higher living standards, and cheaper energy prices), attaining it will necessitate overcoming numerous barriers. Public procurement is at the heart of this challenge: the mechanism through which funding is secured for projects, quality is maintained, and key stakeholders are aligned.

This research brief explores the procurement barriers associated with retrofitting social housing in the West Midlands Combined Authority (WMCA) area and the innovative solutions and initiatives used to overcome them. Key barriers, such as financial constraints, quality assurance concerns, and coordination complexity, are examined alongside actionable solutions implemented in the area. The WMCA area serves as a good example of how to address the intricacies of retrofitting at scale. Securing funding through initiatives such as the Social Housing Decarbonisation Fund (SHDF), as well as collaborations with industry and academia, has allowed local and regional governments in the WMCA area to address funding constraints, ensure quality assurance, and develop a skilled workforce capable of driving low-carbon transitions.

By fostering collaboration and embracing innovative procurement approaches, the area is transforming challenges into opportunities, setting a benchmark for progress in the housing sector. By leveraging these strategies, policymakers, researchers, and stakeholders can accelerate the transition to energy-efficient social housing.

Key Points from the Brief:

• Retrofitting Challenges: Financial constraints, quality assurance issues, and stakeholder coordination complexities hinder large-scale retrofitting efforts for social housing.
• WMCA’s Achievements: The region has upgraded over 2,600 homes under the SHDF and secured £700 million since 2018 to support retrofitting initiatives.
• Role of Procurement: Innovative procurement strategies are essential for overcoming barriers, driving cost efficiency, and fostering market innovation.
• Net-Zero Approach: WMCA integrates retrofitting with broader initiatives like Net Zero Neighbourhoods and Energy Capital to maximise impact.
• Future Focus: The study will develop best practices and analyse economic impacts to support efficient, scalable, and sustainable retrofit solutions

Retrofitting Social Housing in the West Midlands Combined Authority (WMCA) Area: Overcoming Procurement Barriers for a Net-Zero Future

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IPEC Research

Public procurement and SMEs’ innovation in the UK

Authors

Elvira Uyarra
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 represents a pivotal mechanism for fostering innovation, constituting nearly 15% of GDP in OECD countries. In the UK, this accounts for a significant portion of public expenditure, with SMEs playing a vital yet underutilised role. This research publication investigates how public procurement influences SME innovation, with a particular focus on patenting activity from 2016 to 2019.

Key Findings:

• Innovation Amplification: SMEs engaged in public procurement exhibit higher patenting activity compared to their non-supplier counterparts, emphasizing procurement’s role as a demand-pull policy tool.
• Incremental and Exploratory Innovation: Government suppliers outperform non-suppliers in both familiar technological areas and novel domains, illustrating the dual role of public contracts in supporting both incremental and exploratory innovation.
• Technological Directions: Central government procurement drives advanced innovation in areas such as Physics and Electricity, while local governments focus on applied fields like Mechanical Engineering and Transportation.

SMEs constitute 99% of UK businesses yet account for only 20% of direct public procurement spending. Despite this, the research highlights procurement’s stabilizing influence on innovation, even amidst challenges such as delayed patent data capture and economic disruptions.

Central Government’s Strategic Impact: Central procurement supports cutting-edge innovation tied to national priorities, showcasing the potential of large-scale contracts to steer technological advancements.

Local Government’s Regional Focus: Local procurement enhances community-level infrastructure and applied technological solutions, aligning regional innovation efforts with broader policy objectives.

To unlock the full potential of SMEs in driving innovation, the following strategies are recommended:

• Streamlining procurement processes to increase accessibility for SMEs.
• Embedding innovation-focused criteria in public contracts.
• Enhancing local government capacity to support regional innovation ecosystems.

Public procurement and SMEs’ innovation in the UK

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Connected Places Catapult responds to Industrial Strategy consultation

The Connected Places Catapult welcomes the Government’s consultation on a new Industrial Strategy. As the UK’s innovation accelerator for transport, cities and place leadership we are excited about the opportunity this represents.

The Connected Places Catapult welcomes the Government’s consultation on a new Industrial Strategy. As the UK’s innovation accelerator for transport, cities and place leadership we are excited about the opportunity this represents. We are encouraged by the strong focus on the importance of unlocking the complexities of place, as well as the role that data and digital technologies have to play in raising the economic productivity of our cities and regions.

As the Resolution Foundation and others have demonstrated, the UK struggles with the dual challenges of low growth and high inequality, which has left us lagging our European peers in terms of living standards and productivity. Closing that productivity gap would yield incredible returns – an additional £100 billion in gross value added (GVA) per year. According to the Centre for Cities, hundreds of thousands of new jobs would be created if UK core cities achieved productivity levels equivalent to their European counterparts.  

An Industrial Strategy that recognises the importance of place, connectivity and innovation is critical to that endeavour.

Place as a driver for successful sectors and clusters

We welcome the fact that the Green Paper articulates the important role of place. It is also encouraging to see cities explicitly referenced as places that require focus given the important role that they can play in driving economic growth.

We recognise the Government’s need to focus the outputs of the Industrial Strategy around sectors to maximise the potential for long-term sustainable growth. But the economy is a matrix of both places and sectors. We would encourage the Government to ensure that there is no disconnect between the Green Paper’s recognition of the importance of place and the focus on sectors.

A strictly sectoral focus does not allow for challenge-based emerging sectors to occur. In our experience ‘emerging sectors’ occur where technological capabilities with place-based applications are applied across sectors. This often happens as opportunities to work with government and industry create new commercial propositions that respond to place-based challenges.

We also support the focus on clusters and basing investments on robust analysis of strengths and opportunities. We caution against an overreliance on single sectors in any given area, noting the huge opportunity for innovation when diverse sectors intersect and ideas share between one industry/cluster to another. Places which fixate on a single cluster also lack resilience and agility. There is a risk in emphasising clusters that we create unhealthy competition between regions.

Through our work with place leaders across the UK (e.g. the Innovation Places Leadership Academy, the UK Innovation Districts Group, the Freeport Innovation Network), we are also well placed to provide practical support to those seeking to deliver innovation-led local growth.

Innovation & Local Growth Plans

We see an opportunity for the Industrial Strategy, complemented by robust Local Growth Plans, to promote nationwide collaboration between places and clusters which make up different parts of our innovation value chains. This will promote mutually beneficial flows of talent, investment and knowledge across all parts of the chain. We see this as an opportunity to apply a market-driven focus to cluster development, emphasising access to emerging markets and creating tangible business opportunities, as companies join clusters to grow their bottom line.

Capacity to deliver innovation-led local growth is unevenly distributed across combined and local authorities as they face multiple competing fiscal and other pressures. This requires new thinking and resourcing approaches to capacity development and new strategic thinking. Without building innovation capability, there is a danger that the gap between innovation rich and experienced regions, and those regions with untapped potential, will grow. Without broader coordination, Local Growth Plans risk unnecessary fragmentation, competition or duplication.

Investments in high-productivity sectors will deliver a weak return if the places in which they are based are not optimised. Local Growth Plans need to not only describe how places will deliver sectoral improvements in support of the national growth mission, but also place-based transformations in the physical, digital and civic fabric of the place to support a flourishing innovation economy. 

We can help unlock innovation in local growth planning and delivery, strengthen regional digital capability and capacity, and align local plans into national activity and vice versa providing a consistent approach across the UK.

Digital & data leadership

We welcome the Green Paper’s focus on the role of data in supporting the Industrial Strategy, as well as the role of Government in removing the barriers to sharing data to improve business operations and decision making.
 
It is important that Government plays a leading role in reusing public sector data by adopting the principle of “collect once, use many times,” treating data as essential infrastructure. It should incentivise data sharing to unlock regional and sectoral potential while aligning policies with global best practices and market standards. Public sector data, including the proposed National Data Library, should be prioritised as a driver of innovation and growth.
 
We welcome the provisions in the Data (Use and Access) Bill – mandatory sharing, funding mechanisms, and enforcement—extend across sectors. A cross-sector Smart Data framework should promote secure, standardised sharing, enhancing productivity and innovation. Clear governance, pro-innovation regulation, and alignment with international frameworks, such as the Interoperable Europe Act, are essential.
 
Improving data literacy and capabilities within businesses will enhance their use of data across supply chains, foster collaboration, and strengthen competition in data-driven markets. These efforts will ensure the UK’s public and private sectors thrive in an increasingly data-driven economy.
 
It is also important to adopt a standardised approach across Government, industry, academia and Catapults. A decentralised approach to data sharing infrastructure is vital for unifying fragmented systems across transport, energy, and water, reducing costs and boosting productivity.

This will:

• Establish transparent governance 
• Identify critical cross sector uses-cases and route maps
• Inform legislation, policy and investment in demonstrators
• Inform the development of a framework of future-proof components (technical and socio-technical) building on existing digital assets and legacy technology
• Share strategic insights to guide the market to implement this infrastructure effectively, fostering innovation and resilience across industries.

Innovation-friendly procurement

Thanks to technical advances we are seeing incredible innovations being unlocked in the UK by new suppliers from academic spinouts, small and medium sized businesses (including start-ups), scale-ups, venture capitalists, accelerators, corporate innovation teams and many others. These diverse suppliers are helping to achieve better, cheaper and quicker outcomes and create more value from the £400bn the public purse spend per annum on third party suppliers.
 
If just 5% of public sector contracts were brought to market in this way, it would transform £19bn of existing spend into innovation fuel annually. There is an opportunity to nurture this approach further and reform how the public sector shapes markets by not only effectively delivering public policy outcomes, but also by creating new businesses that could be exporting services across the world. To achieve this, we must go beyond Research and Development and use procurement to realise more value by scaling solutions.

• Being more open with the market on the challenges the public sector is facing;
• Applying effective procurement routes to market;
• Creating the right culture and environment for innovation in the public sector to thrive;
• Using experimentation to test, iterate and build evidence on where innovation can add value, and scouting the market for those hard-to-find companies that can solve key problems; 
• Upskilling on the buyer and seller side on how public and private partners can co-create, work together and create a more entrepreneurial approach to solving public policy agencies.

IPEC Research

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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IPEC Research

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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