Basic research public procurement: the impact on supplier companies
| Pages | 224-251 |
| DOI | https://doi.org/10.1108/JOPP-07-2018-0027 |
| Published date | 02 September 2019 |
| Date | 02 September 2019 |
| Author | Martina Dal Molin,Ezio Previtali |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public finance/economics,Taxation/public revenue |
Basic research public
procurement: the impact
on supplier companies
Martina Dal Molin and Ezio Previtali
Sezione di Milano Bicocca, Istituto Nazionale di Fisica Nucleare, Milano, Italy
Abstract
Purpose –The purposeof this paper is to estimate and assess the impactof public procurement activities of
an Italian basicresearch center (the National Institute for NuclearPhysics [INFN]) on supplier companies.
Design/methodology/approach –Starting from the exploratory natureof this research, a single case
study research strategy has been applied. The impact of basic research public procurement has been
estimated usingsurvey data on 168 INFN supplier companies. Suppliercompanies have been surveyed on six
different categories of company outcomes, namely, sales volume, learning and innovation, relationship with
the market, alliancesand network and social impact.
Findings –Results of the analysis reported that the activity of INFN public procurement generates a
positive impact on supplier companieson different dimensions, especially related to learning and innovative
outcome and economicimpact and market penetration outcome.
Social implications –Policy implicationscan be derived from the current study. In particular, to support
the policymakers in the effort of assessing the impactof basic research public procurement, this study, first
highlights the impactdimensions on supplier companies, and second, it provides empiricalevidence of public
procurementas a viable tool to foster companies’innovation.
Originality/value –This research explores a relevantbut understudied topic that has recently attracted
the attention of policymakers.In fact, although public procurement have been recognized as a tool to foster
companies’innovation,empirical evidence is still scant,particularly in the case of basic research.
Keywords Italy, Public procurement, Basic research, Research infrastructures,
Technological spillover
Paper type Research paper
Introduction
Discussions on the impact of basic research public procurement on supplier companies are
not certainly new among scholarsand they dated back at the 1980s (Griliches, 1986;Bianchi-
Streit et al.,1984;Mansfield, 1980). However, recent budget constraints and accountability
pressures have put more and stronger emphasis on proving evidence on how publicly
funded research is able to generate benefits for supplier companies and societies at large
(Ancaiani et al.,2015;Autio, 2014;Autio et al., 2003). In the wake of this renewed interest on
the impact of publicly funded basic research, also the concept public procurement for
innovation (PPI), i.e. the novel label for “public technology procurement”(Edquist and
Zabala-Iturriagagoitia, 2012), has received increased attention from scholars and from
policymakers as a demand-driven tool to support and to foster companies’innovation
(Ghisetti, 2017;Caloghirouet al., 2016;Edler and Yeow, 2016;Lember et al., 2015;Georghiou
et al.,2014;Edquist and Zabala-Iturriagagoitia, 2012;Aschhoff and Sofka,2009). According
to the existing literature, PPI has been recently seen as fundamental driver for the
development of innovative technologies, but it also helps reducing the companies’risk of
research and development (R&D) and innovation investments with an uncertain demand
JOPP
19,3
224
Received25 July 2018
Revised1 February 2019
Accepted16 March 2019
Journalof Public Procurement
Vol.19 No. 3, 2019
pp. 224-251
© Emerald Publishing Limited
1535-0118
DOI 10.1108/JOPP-07-2018-0027
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1535-0118.htm
and unknown development, that generally discourage companies to undertake the costs of
innovation (Ghisetti,2017;Caloghirou et al.,2016;Uyarra et al.,2014;Unnervk, 2009).
Among the different fields in which the effectof public procurement have been studies,
the case of big science, and in particular thatof basic research, has received scant attention
yet (Åberg and Bengtson, 2015;Autio, 2014;Georghiou et al.,2014;Toole, 2012;Zuijdam
et al., 2011;Autio et al., 2003). In our opinion, it represents a fertile field of investigation
given the fact that experiments performed by basic research need the development of large
research infrastructures (RIs), such as the Large Handron Collider (LHC) located at the
European Organization for Nuclear Research (CERN), often realized and updated in
collaboration with companies.Specifically, basic research experiments and related RIs, need
the design of cutting-edge technologies and prototypes that can push technological
innovation of supplier companies to the front-end. It is properly for this reason, that basic
research centers, through their activity of public procurement, are thought to push
technological advancements favoring, in turn, supplier companies’innovation capabilities,
radical and incremental innovations and finally, national economic growth (Archibugi and
Filippetti, 2018;Mazzucato, 2016;Hsu et al.,2015;D’Este et al., 2013;Vuola and Hameri,
2006;Autio et al., 2003,1996;Nordberg et al.,2003;Salter and Martin, 2001;Rogers and
Bozeman, 1997;Hameri,1996;Bianchi-Streit et al., 1984).
Although basic research public procurement has received scant attention, the limited
empirical studies on the field support the idea that basic research can generate positive
impact on supplier companies. To cite some of the pioneer works, studies conducted at
CERN and European Space Agency (ESA) highlighted that the value added per contract
was 2.7 in the case of the ESA and 3.7 in the case of CERN (Bach et al., 1998;Bianchi-Streit
et al., 1984;Brendleet al.,1980;Shmied, 1975). More recent studies highlightsthat the impact
of basic research on supplier companies is far from being limited to the economic and
financial perspective. On the contrary,it encompasses several indirect and spillover effects,
ranging, for example, from increasing the stock of knowledge, creating new
instrumentations, entry in new markets and increase in market shares (Florio et al., 2018,
2017;McMillan and Hamilton, 2003;Salter and Martin, 2001;Shmied, 1982). However,
assessing the benefits of basicresearch public procurement is far from being an easy task: in
fact, benefits generated by basic research public procurement on supplier companies are
visible, and therefore, recognizable, only in the medium and long-term (Martin and Tang,
2006;Zellner, 2003). Hence, typical output-based measures (e.g. patents, licenses and spin-
offs) to assess the impact of procurement activities are not fully able to capture and assess
such impact (OECD,2014,2001;Martin and Tang, 2006;Ekboir, 2003;Zellner, 2003).
Moving from this literature background, the present research is aimed at exploring the
ability of a basic research center to act as a technological and innovation learning
environment for supplier companies. Specifically, this study intends to answer to two
research questions: which dimensions of impact a basic research center is able to generate
on supplier companies through its activities of public procurement? Furthermore, is the
impact different depending on companies considering companies’characteristics, the
intensity of relationshipand type of procurement?
The Italian National Institute for Nuclear Physics (INFN) (Istituto Italiano di Fisica
Nucleare, INFN) is the case investigated. According to the research goal, the INFN
represents a fruitful case to be studied as it actually operates with large and complex RIs
developed and updated in collaboration with companies. For this reason, the INFN may act
as a potential “learning environment”forsupplier companies (Autio et al.,2004) and through
its procurement activities,it potentially generate a spillover effects on supplier companies.
Basic research
public
procurement
225
To continue reading
Request your trial