Public procurement and innovation: towards a taxonomy
| DOI | https://doi.org/10.1108/JOPP-08-03-2008-B001 |
| Pages | 17-56 |
| Date | 01 March 2008 |
| Published date | 01 March 2008 |
| Author | Leif Hommen,Max Rolfstam |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 9, ISSUE 1, 17-56 2009
PUBLIC PROCUREMENT AND INNOVATION: TOWARDS A TAXONOMY
Leif Hommen and Max Rolfstam*
ABSTRACT. The role of public procurement as an instrument to stimulate
innovation has been increasingly emphasized by European policymakers.
This perspective raises demand for the understanding of public procurement
as an activity taking place in a variety of different procurement contexts and
as an act of innovation. Accordingly, this paper proposes a taxonomy of
public procurement and innovation, combining interactive learning and
evolutionary perspectives on innovation processes to account for the broad
range of different ‘interaction environments’ or ‘resource interfaces’ in
which government or public sector organizations may act as lead users of
innovations. On this basis, the taxonomy draws practical policy implications
for the design of programmes and initiatives for the public procurement of
innovations.
INTRODUCTION
Current policy and research literature on the public procurement
of innovations lacks strategic perspective and attention to context.
European Union (EU) policy-makers have increasingly encouraged
“public procurement of innovative products and services” as a policy
instrument appropriate to realizing the Lisbon and Barcelona goals
for raising private sector R&D investment in member states
(European Council, 2005; National IST Research Directors Forum,
2006). Several EC-funded projects, as well as individual national
authorities, have specified principles, models, and examples of “best
practice” (Edler et al., 2005; Georghiou & Cave, 2005; OGC, 2004).
But such guidance has been based on generic models of the
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* Leif Hommen, Ph.D., and Max Rolfstam, M.Sc., are an Associate
Professor, and a Ph. D. Student, respectively, Centre for Innovation,
Research and Competence in the Learning Economy (CIRCLE), Lund
University, Sweden. Hommen’s research interest is in innovation studies,
Rolfstam’s research interest is in public procurement of innovation.
Copyright © 2009 by PrAcademics Press
18 HOMMEN & ROLFSTAM
procurement process and a focus on particular projects, viewed as
transactions and evaluated from the standpoint of public sector
organizations as ‘buyers’. This approach is unable to account for
variety and change in the dynamics of user-producer interaction and
longer-term processes of technological development and cannot
inform broader strategies for the public procurement of innovations.
We propose a taxonomy that draws upon theory and research in
innovation studies and related fields to map the variety of contexts
and identify key features of context that should be addressed in
planning and conducting public procurement of innovations.
Theoretically, the taxonomy’s main conceptual dimensions are drawn
from interactive learning and evolutionary views of innovation, and for
both of these main dimensions several sub-dimensions are
elaborated. With respect to evolution, for example, the framework
takes into account not only technological trajectories but also
institutional aspects of market development and shifts in the balance
of power and capability within established networks of innovation.
The taxonomy also addresses key aspects of the design of
programmes and initiatives for the public procurement of innovation.
These aspects include the role of public vis-à-vis private demand, the
goals for technology development, the character of innovation
pursued, and the modalities employed.
A taxonomy is one of two kinds of typology. The methodological
literature identifies typologies as theoretical constructs that are
particularly useful for multiple case study research designs (de Vaus
2001). Dess et al. (1993) identify one of the chief virtues of
typologies as “express[ing] complicated and interrelated relationships
among many variables without resorting to artificial
oversimplification”. Some authors emphasize that typologies are
conceptually derived classification schemes, resulting in
complementary sets of “ideal types” (Bozarth & McDermott, 1998),
constructed either deductively or inductively. The term ‘typology’ is
sometimes applied to all such classification schemes. However,
Turner (1992, p. 10) has differentiated “naturalistic schemes, which
try to … capture the way in which invariant properties of the universe
are ordered”, from “sensitising schemes, … intended only to sensitise
PUBLIC PROCUREMENT AND INNOVATION: TOWARDS A TAXONOMY 19
and orient researchers and theorists to certain critical processes.”
Similarly, Sayer (1992) has distinguished between causal groups, and
taxonomic groups. Hence, we reserve use of the term typology for
what Turner (op. cit.) refers to as a “naturalistic” scheme, and apply
the term taxonomy to its counterpart, the “sensitising” scheme.
Below, we develop a taxonomy to guide exploratory case study
research on public procurement and innovation.
There have been few attempts to classify the relations between
public procurement and innovation. Edquist and Hommen (2000)
developed a four-field matrix based on two dichotomies. The first was
between “direct” and “catalytic” procurement (the latter being carried
out on behalf of other eventual end-users) and the second was
between “developmental” and “adaptive” technology procurement,
(the former involving radical and the latter incremental product
innovation). However, this matrix has never been fully tested, since it
has not yet been applied to any cases of “catalytic” procurement
(Edquist et al. 2000). It also fails to recognize instances where
several public buyers act in concert (e.g., Kaiserfeld, 2000). Cave and
Frinking (2003) have addressed the design and implementation of
public procurement projects to promote innovation in terms of four
key “dimensions” – relations between public and private demand,
reasons for innovative procurement, the type of innovation involved,
and the modalities available. However, they generate only a checklist,
and not a typology. Our work incorporates key elements of Cave and
Frinking’s framework within a comprehensive classification scheme.
We can also identify some relevant typologies developed for the study
of the private procurement (‘purchasing’ or ‘acquisition’) of
innovations, such as Håkansson and Johansson’s (1993) early work
on forms and contexts of user-producer interaction, and Stock and
Tatikonda’s (2000) more recent “inward technology transfer (ITT)
typology”. However, these sources have neglected the general case of
public procurement and innovation, not to mention its variants (some
of which may have no parallels in the private sector). We combine
and integrate these perspectives with the aforementioned
approaches to the study of public procurement to develop a
specification of the relations between public procurement and
innovation. The resulting taxonomy is based on the identification of
two key dimensions: the interaction of users and producers and the
evolution of technologies and markets.
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