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Innovative Public Procurement and Grand Challenges

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VTT's Matti Pihlajamaa's presentation dove into the depths of transformative innovation policy and the potential of innovative public procurement. Find out more at the ORSI project website: https://www.ecowelfare.fi/en/

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Innovative Public Procurement and Grand Challenges

  1. 1. D.Sc. (Tech) Matti Pihlajamaa, Senior Scientist VTT Technical Research Centre of Finland Innovative Public Procurement and Grand Challenges What Is an Eco-Welfare State seminar 21.1.2020
  2. 2. The evolution of science, technology and innovation policy 1 Figure: Diercks et al., 2019 The three framings: Schot & Steinmüller, 2018
  3. 3. The evolution of science, technology and innovation policy 2 Figure: Diercks et al., 2019 The three framings: Schot & Steinmüller, 2018 ”Innovation for growth” - WW2→ - Boosting basic research and private R&D for economic growth
  4. 4. The evolution of science, technology and innovation policy 3 Figure: Diercks et al., 2019 The three framings: Schot & Steinmüller, 2018 ”National Systems of Innovation” • 1980s→ • Creating institutions, policies and networks that ensure national competitiveness. ”Innovation for growth” - WW2→ - Boosting basic research and private R&D for economic growth
  5. 5. The evolution of science, technology and innovation policy 4 ”National Systems of Innovation” • 1980s→ • Creating institutions, policies and networks that ensure national competitiveness. ”Innovation for growth” - WW2→ - Boosting basic research and private R&D for economic growth ”Transformative innovation policy” • 2010s→ • Promoting innovation for solving grand challenges Figure: Diercks et al., 2019 The three framings: Schot & Steinmüller, 2018
  6. 6. Why do we need transformative innovation policy? Problems with promoting innovation for innovation’s sake: – Economic competitiveness is not sufficent to solve many environmental and social problems – Innovations produce negative effects: emissions, inequality, oppression, excessive use of natural resources… – We are unable to address these negative externalities by regulation – Significant share of global human capital goes to generating unnecessary or harmful innovations 5
  7. 7. Creating demand for an eco-welfare state • Need for a ’normative turn’ in innovation policy • Until recently, the policy measures to tackle ’grand challenges’ have mostly focused on investing in research (e.g. Lund Declaration 2015; Horizon2020). • New emphasis on demand- side measures: public procurement as an engine for promoting and guiding innovation. 6
  8. 8. The potential of innovative public procurement In Finland, public authorities spend ca. 35 billion € annually 7
  9. 9. Innovative public procurement 8 Type Aim In practice Pre-commercial procurement: buying solutions that don’t yet exist Increase R&D towards solving societal problems Buying concepts or prototypes for solving an identified problem Procurement of new innovative solutions: government as a lead user Boosting further innovation, generating customer references Buying novel solutions with few use cases ‘Catalytic’ procurement of innovation: catalysing the development of innovations for broader public use Market creation for innovative solutions Aggregating the demand of multiple procurers: KEINO buyer groups in Finland Innovation-friendly procurement: practices for ensuring that innovative solutions are not excluded Wider diffusion of innovations Market dialogue, quality criteria, functional or outcome-based specifications Modified from Uyarra et al., 2020
  10. 10. Challenges for research and practice • From grand challenges to concrete actions • Improving procurement skills and capabilities • Scaling local successes • From innovative public procurement to effective policy mixes • Challenges from directionality: – Co-creating desirable futures – Vulnerable to lobbying and political opportunism – Avoiding ‘picking the winners’ – Taking care of those who the innovations affect in negative ways 9
  11. 11. Thank you Matti Pihlajamaa D.Sc. (Tech), Senior Scientist Ethics and responsibility of innovations VTT Technical Research Centre of Finland Vuorimiehentie 3, Espoo, P.O. Box 1000, 02044 VTT, Finland Phone: +358 40 673 1050 Email: matti.pihlajamaa@vtt.fi 10

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