Barriers to Innovation Through Public Procurement: A Supplier's Perspective.

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Elvira Uyarra, Jacob Edlera, Javier Garcia-Estevez, Luca Georgiua, Gillian Yow

We would like to acquaint you with an interesting article by the authors of which are Elvira Uyarra, Jacob Edlera, Javier Garcia-Estevez, Luca Georgiua, Gillian Yow. The authors represent Manchester Institute for Innovative Research, Manchester Business School, University of Manchester and United Nations Development Program (UNDP), Colombia.

The article identifies factors in public procurement that affect the ability of suppliers to innovate.

- The most important are tender specifications, skills, user-supplier interaction and risk management.

- There are differences in the perception of obstacles between R&D and non-R&D participants.

- Small firms and non-profit organizations are particularly disadvantaged in terms of procurement.

Abstract article: Public procurement is increasingly seen as having an important factor in stimulating innovation. Despite this, numerous obstacles prevent the public sector from acting as an intelligent and informed purchasing client. This paper seeks to understand how barriers related to processes, competencies, procedures and relationships in public procurement affect the ability of suppliers to innovate and benefit from innovation. To find the answers, we conducted a dedicated survey of UK public sector suppliers using the probit model to examine the impact of structural, market and innovation determinants on supplier perceptions of these barriers.

The main obstacles reported by suppliers relate to the lack of interaction with procuring entities, the use of overspecified tenders, low procurement competence and poor risk management in the procurement process. Such obstacles are most strongly perceived by R&D intensive organizations. Our results also show that certain organizations, especially small firms and non-profit organizations, face greater challenges in implementing innovations arising from the procurement process, such as contract size, lack of helpful feedback, and communication of opportunities.