The document summarizes a project called Procu-Inno that is measuring the impact of public demand and procurement on firm innovation in Finland. The project includes surveys of firms and public procurement bodies. Preliminary findings suggest that public procurement can positively impact innovation in supplying firms and have catalytic effects in other markets. Key procurement practices that influence innovation are early interaction between firms and procurers and communication of future needs. The project aims to measure these impacts of public procurement and innovation policy.

1. Measuring public demand and its impacts on firm innovation in Finland
OECD expert workshop
4 February 2013, Paris
Ville Valovirta
VTT Technical Research Centre of Finland

2. 2
06/02/2013
Procu-Inno project
Led by VTT Technical Research Centre
Participants: City of Helsinki, City of Pori, Finnish Transport Agency
Research partners: The University of Manchester, Lund University, Technical University of Berlin
Financially supported by Tekes
Project period 2011-2013

3. 3
06/02/2013
Surveys
1. Firm survey
Broad industry coverage
Questionnaire based on the survey by University of Manchester 2011
Enables comparative analysis between Finland & UK
Focus: Impacts of public procurement on firm innovation
2. Survey to public procurement bodies
Survey to Finnish public bodies having carried out public procurements 2007-2011
Focus: Innovation orientation – Capacity of public procurers to purchase innovative solutions

4. 4
06/02/2013
PUBLIC PROCUREMENT BODIES
SUPPLIER FIRMS
OTHER
BUYERS
Market
Innovation policy
DEMAND side innovation policy measures
SUPPLY side innovation policy measures
Impact of supplier innovation on public service improvement
Impact on development and diffusion of innovation
Impact on market creation and market structure
Impact on capacity to purchase innovative solutions
Public demand
Private demand Supply
Impact of public procurement on market uptake and private demand (catalytic effect)
Mapping the impacts
Impact of public procurement on firm innovation

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06/02/2013
Were innovations the result of bidding for or delivering public sector contracts?
N = 266

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06/02/2013
Were innovations the result of bidding for or delivering public sector contracts? By size of responding organisation
193 51 22 Number of responses
N = 266
Size of responding organization

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06/02/2013
Catalytic effect of public procurement
Thinking about the innovations that resulted from bidding for or delivering public sector contracts, have any of these subsequently helped you…?
N = 97

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06/02/2013
Have procurement practises you have encountered, encouraged, hindered or had no impact on organisation’s innovation activities? N = 244-251 (varies between responses)

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06/02/2013
Preliminary findings
Public procurement can have a positive impact on innovation in firms supplying products and services to the public sector.
Public procurement also has catalytic effects on business for private customers, other public sector customers, and export markets.
Practices related to public procurement with strongest influence on firm innovation are early interaction with procuring organization and advanced communication of future needs.
Three principal measurement issues:
1.Impacts of public procurement on firm innovation
2.Impacts of procured innovations on public service improvement
3.Impacts of innovation policy on public procurement of innovation