Government spending is a tool for innovation

Governments spend huge amounts of money on things that have a large component of R&D behind them. In Europe, for example, state spending on health is massive. And don't even mention defence.

 

While it may be tempting to always look for value for money, this can mean that you end up buying cheap imports at the expense of smart home-grown ideas that cost a bit more to start with but that have massive potential. Smart purchasing can even be a driver for innovation.

 

That's why the EU has been looking at this and has come up with its own take in the form of the report "Pre-Commercial Procurement Of Innovation". You get an idea of where they come from when you read the subtitle "A Missing Link In The European Innovation Cycle". In the words of the accompanying press release, the group of experts who put the report together "proposes that national administration should invest more in purchasing innovative products and services that still require further research in the underlying ICT".

 

The focus of the report is on information and communication technologies, but the message holds true generally, as the press release suggests.  It quotes Viviane Reding, the commissioner for information society and media as saying "Europe must create a commercial environment that encourages more rapid innovation and take up of research results. The public sector has massive buying power, but it needs the right incentives to share the risks as well as the benefits of investing in new technologies and services."

 

Any plans to act on this front naturally have to be in line with EU law. The report tells us that "There is nothing preventing Member States from introducing their own pre-commercial procurement schemes as long as they fall within the legal constraints identified by the working group. It is however desirable that the schemes are coherent and transparent."

 

The working group behind the report then suggests that Commission provides "guidance on 'best practice' related to Pre-commercial Procurement of Innovation". It also wants some workshops. The focus continues to be on ICT, but what is to stop other sectors from getting in on the act? It could be a good way of encouraging Europe's innovators.