post

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.

post

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.

Find this information useful?

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

Download now

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

File type: pdf

File size: 2.67Mb

Download Report

IPEC Research

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

File type: pdf

File size: 3.26Mb

Download Report

IPEC Research

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

File type: pdf

File size: 2.97Mb

Download Report

IPEC Research

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

File type: pdf

File size: 2.29Mb

Download Report

IPEC Research

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

File type: pdf

File size: 2Mb

Download Report

post

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