Reading list – Governments should be innovative in their spending

The National Endowment for Science, Technology and the Arts continues its series of papers on aspects of innovation.  (Last year they gave us The Innovation Gap.) The latest contribution is Driving innovation through public procurement.

 

The"intro" to the four-page paper says it all really "Innovation has a role to play in efficient procurement – and efficient procurement has a role to play in stimulating innovation". With £125bn a year leaving the public wallet, government procurement is the biggest single chunk of cash floating around.

 

The idea that this money can support innovation is hardly new. The US government has been playing this game for years, while criticising the rest of the world for subsidising things it wants to sell.  But still not much happens in the UK.

 

As NESTA points out, small companies often face an uphill struggle to get new ideas taken up. "Because of the scale of public procurement, the government is frequently well-positioned to serve as this ‘early user’, demonstrating the value of innovative products and services to the wider market while providing revenue to the supplier and meeting public needs."

 

Trouble is, the government is probably the least imaginative customer around, with all sorts of mad requirements. No wonder, then that, "Only one fifth of central government contracts are awarded to small businesses,7 with 14% of SMEs citing the 'effort involved in bidding or prequalifying' as a barrier to selling to the public sector."

 

The NHS is one of the biggest holes into which the UK throws public money. Small companies tear their hair out trying to find a way in. At least the new National Institute for Health Research (NIHR) is on to the case.

 

There's a lot more in this brief report from the anonymous people in the NESTA Policy & Research Unit.  Maybe Gordon Brown can fit it into bis busy reading schedule.