Governance of projects in public procurement of innovation a multi-level perspective

Pages187-206
DOIhttps://doi.org/10.1108/JOPP-01-2019-0005
Publication Date10 Apr 2020
AuthorAlireza Talebi,Davar Rezania
SubjectPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public finance/economics,Taxation/public revenue
Governance of projects in public
procurement of innovation a
multi-level perspective
Alireza Talebi and Davar Rezania
Department of Management, University of Guelph, Guelph, Canada
Abstract
Purpose Governance of projects is a dynamic process that involves the interaction of agents,
opportunities, rules, instrumentsand legitimacy. The authors conducted a case study of the governance of
exploratory projects in public procurement of innovation in a local government. The authors consider both
contextual aspects that impose requirementson the procurement process and procedural aspects of how the
different actors interactwith each other. In particular, the purpose of this study is to investigate how actors
make sense of theprojects and how governance evolves over their lifetime.
Design/methodology/approach To engage in an open-system investigation of exploratory public
procurement of innovation (PPI) projects, the authors adopted a case study approach in which they
collected a variety of data including publicly available documentary evidence, interviews with project
participants and project evaluation reports. The authors used transcripts of 17 interviews with project
participants conducted independently to gain an initial understanding of the case. They conducted
additional semi-structured interviews with projectsparticipants (ten interviews in total) and used
theory-driven analysis (Pawson and Tilley, 1997) based on Borrás and Edlers(2014) model of
governance.
Findings The authors identied four stages problem identication, partner selection, partnership
development and evaluationand commercialization these projects. The case demonstrateshow governance
changes in each stage and at the three levels of policy, network and projects. Each level has its own
governance pillar. The results suggest that a multi-level perspective (MLP) can be a fruitful framework to
study governanceof projects in these contexts.
Research limitations/implications The authors note thatthe number of participants in the network
of this case is not very large. Other organizations that aim to adopt PPI may need to pay attention to the
complementarity and the number of partners inthe network. In this case, organizations were motivated to
collaborateas each had its own objectives which were distinct butcomplementary.
Practical implications Co-creation of value is currently a topic of interest for public policy reform
across the globe. The caseindicates that procurement for innovation requires a degreeof coordinated change
across governmental departments, such as planning, legal and procurement to implement the policy and
related support systems.Furthermore, the authors observed that a portfolioapproach to inter-organizational
collaboration with differentpartners was effective. Each partner has its own objective,but they complement
one another. A portfolio of different, though complementary, inter-organizational arrangements enables
various complementaryinstruments and various logics to be used.
Social implications The public sector is an important actor in driving innovation in products and
services that fulll societal needs. This is explored in public procurement of innovation. In this
process, several partners from private and public sectors are involved. This partnership is mainly
used to co-create the value and encourage innovation to benet the citizens. However, to serve this
goal, the case indicates that procurement for innovation requires a degree of coordinated change
across governmental departments, such as planning, legal and procurement to implement the policy
and related support systems. For this phenomenon MLP should be used as an inclusive frameworkto
study socio-technical change.
Originality/value The analysis of the case presentedin this study demonstrates that even in the case of
temporary public procurementof innovation projects, governance is layered. The three pillarsof governance
Public
procurement of
innovation
187
Received17 January 2019
Revised22 August 2019
Accepted14 February 2020
Journalof Public Procurement
Vol.20 No. 2, 2020
pp. 187-206
© Emerald Publishing Limited
1535-0118
DOI 10.1108/JOPP-01-2019-0005
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1535-0118.htm
not only interact at each layer butalso communicate across layers. Even though the interaction of the three
pillars of governance is well established in the literature on socio-technical change, the interaction across
levels in the context of temporaryprojects is novel. The authors contribute to the literatureon governance of
such projectsby highlighting the stratication of governance.
Keywords Project governance, Exploratory projects, Public procurement
Paper type Research paper
Introduction
The public sector is an important actor in driving innovation in products and services that
fulll societal needs (Haskel and Wallis, 2013;Martin and Scott, 2000;Knutsson and
Thomasson, 2014;OECD, 2015). The driving of innovation aims to support other public
objectives, such as job creation, income distribution and economic growth. Borrás and
Edquist (2013) divide innovation policy instruments into three categories, environmental
measures, supply-side measures and demand-side measures. Environmental measures
enable businesses to innovate and include tax allowances for engaging in R&D and the
enforcement of intellectual property rights that protect a rm from opponents. Supply-side
measures include the public provision of research infrastructure facilities. R&D grants and
public innovationlabs are two signicant examples. Public procurement of innovation (PPI)
and its associated regulations and processes are key elements of demand-side measures to
stimulatepublic and private demandfor innovation (Edler and Georghiou,2007).
PPI differs from traditional procurement in both context and process (Edquist and
Zabala-Iturriagagoitia, 2012). Although traditional procurement provides detailed
specications for the needed products or services, PPI only species the functional
requirements. PPI is characterized by novelty of some aspects of procured items and
performing research and development by a supplier to deliver the product(Rolfstam, 2013).
Furthermore, PPI is a more cooperative process than the competitive market-based
approach of traditional procurement being driven by a common mission for all actors
(Edquist and Zabala-Iturriagagoitia, 2012).
For PPI projects neither the end-product nor the means to attain themcan be dened at
the beginning. Therefore, the rational logicof project management and public procurement
does not apply. It is recognized that procuring innovation requires the use of advanced
project management techniques (Yeow and Edler, 2012) and is underpinned by policy
choices (Georghiou et al.,2014). PPI falls within the classication of exploratory projects
(Lene, 2014;Yeow and Edler, 2012). In thispaper, we use results from a case study carried
out in the City of Guelph in Ontario, Canada to examine governance of projects in PPI.
Project governance can be viewed as a system for steering projects in an organization
(Müller et al.,2014). As such, it is a mode of social coordination distinct from governing,
which is an intentional act of steering (Kooiman, 1993). The case focuses on a program to
introduce PPI in the city and three projects for the procurement of products to solve civic
issues related to water consumption, parking and citizen engagement in the planning
process. We consider bothcontextual aspects that impose requirements on the procurement
process and procedural aspects of how the different actors interact with each other. In
particular, we investigate how actors make sense of the projects and how governance
evolves over their lifetime.
The paper is organized as follows. First, we discuss the existing PPI and project
governance literature. Next, we consider the PPI projects as an instance of socio-technical
change and analyze how projects are dened, executed and legitimized. This perspective
enables us to describe how these projects are governed across different levels. We draw
JOPP
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