Innovative public procurement as an innovation policy instrument

The value of public procurement in Finland is approximately EUR 35 billion annually, with municipalities and joint municipal authorities accounting for two thirds, or approximately EUR 23 billion, and the central government for one third, roughly EUR 12 billion. Because public procurement represents 15% of Finland’s gross domestic product, it is important to turn this economically significant public sector activity into a driver of social and economic development towards sustainable growth.

Innovative public procurement refers to the procurement of new or significantly improved goods or services that can help to enhance the productivity, quality, sustainability and/or effectiveness of public services.  

Innovative public procurement can contribute to major developments such as low-emission technologies, new digital solutions that improve health and social services, and new business models for the circular economy. At the same time, the public sector encourages companies to engage in research, development and innovation to accelerate the dissemination of new solutions and business growth. With extensive procurement of new solutions, the public sector can also help to create reference markets and promote exports.  

Examples of sustainable and innovative procurement are available on the websites of KEINO and Business Finland (in Finnish)

Objectives of the Government Programme for innovative public procurement

The Government Programme includes a strategic objective: Finland will be known as a front runner in technological advances, innovative procurement and the culture of experimentation. To fulfil this objective, action will be taken to increase innovative procurement and thereby to improve services, generate growth and enable the creation of a reference market. The Government Programme also includes the objective of increasing the share of innovative procurement to 10 per cent of all public procurement by the end of the parliamentary term.

Key challenges in implementation are linked to

  1. procurement competence and management;
  2. linking procurement with the implementation of strategy objectives; and
  3. cooperation with companies.

The Ministry of Economic Affairs and Employment has led the preparation of an action plan to implement the objectives of the Government Programme and the innovation objectives of the national procurement strategy.  

Read more:

A comparative study by the EU Commission on member states' measures to promote innovative public procurement  
A report by the National Audit Office of Finland on the implementation of innovation strategy on public procurement 
OECD report: Public Procurement for Innovation 
Business Finland - Services for the public sector
 

Further information:

Kirsti Vilén - kirsti.vilen(at)tem.fi
Jaana Räsänen - jaana.rasanen(at)tem.fi