The Law and Economics of EU Innovation Procurement: MSM-Corvers scaling up initiatives to support innovation through the public sector

Over the last 10 years the EU has given a strong impulse to innovation procurement. Among others, the EU has designed several legal instruments that allow the public sector to stimulate private actors to develop innovative solutions to meet a wide range of public sector needs. These include pre-commercial procurement (PCP), an approach to the procurement of R&D services introduced by a 2007 EC communication. PCP was designed with the aim to encourage public procurers to purchase R&D services that would speed up or prompt the emergence of innovative solutions to public sector needs.

(Main photo: Professor Nicola Dimitri and Dr. Anne Rainville from MSM discussing the opportunities and mechanisms of the public procurement of innovation in the EU)

In a public lecture and webinar on 20 March at Maastricht School of Management, the Corvers-MSM Chair in Innovation Procurement, Professor Nicola Dimitri, and Dr. Anne Rainville, from Corvers and VTREK, and also research fellow at MSM, discussed the law economics of these public procurement solutions for innovation.

In the lecture Professor Dimitri and Dr. Rainville explained that the EU envisages two broad categories of innovation procurement. The one is Pre Commercial Procurement of Innovation (PCP), which ‘can be used when there are no near-to-the-market solutions yet and new R&D is needed. PCP can then compare the pros and cons of alternative competing solutions approaches’. Therefore, PCP is conceived to fulfill the public sector needs with solutions that are unavailable in the market and require R&D activities.

The second broad category of innovation procurement is the Public Procurement of Innovative Solutions (PPI), which ‘is used when challenges can be addressed by innovative solutions that are nearly or already in small quantity in the market and don’t need new Research & Development (R&D)’. The main distinguishing feature between the two categories is that PCP focuses on R&D while PPI excludes R&D.

Improving our understanding of how these instruments could improve the effectiveness of innovation, how it should best be managed, and how especially small and medium companies can benefit in tandem with the public sector, are among the main aims of the recently established Corvers-MSM Chair in Innovation Procurement at the Maastricht School of Management.

The full paper can be downloaded here : https://www.msm.nl/resources/uploads/2017/03/Working-Paper-No.-2017-1.pdf

About the Chair in Innovation Procurement
The Corvers-MSM Chair in Innovation Procurement was launched in October 2016. It builds up on the strong attention received in recent years by both Public Procurement and Innovation, as two fundamental drivers for growth and development, a point particularly stressed by the recent 2014 EU Public Procurement Directives. Indeed, since for example in the EU innovation procurement through public expenditure counts for about 18% of the GDP, with tight public finances procurements delivery of best value for money has become crucial for the public sector. Moreover, because of its size, innovation procurement is in a best position for promoting innovative solutions to enhance societal growth and welfare. Innovation procurement also plays a role in industrial policy – vital for creating and maintaining a competitively growing economy, and an area of concern in the EC and industrially lagging countries in Africa and Latin America in recent years.

The Corvers-MSM Chair in Innovation Procurement has since it inception been active in generation of a number of publications and public lecturers on the topic. Moreover, it has created and offers a flexible training programme in innovation procurement that is suitable for open enrollment as well as to be tailored to organizational needs. Recent clients include the Dutch Ministry of Defense and Het Waterschapshuis, who is supporting doctoral research in the field.

In this the Chair is deepening the expertise of Corvers Commercial and Legal Affairs, a leading legal consultancy firm in the Benelux area, specialized in European public procurement law, innovation, IPR and contracting. Covers is consortium partner for the European Commission’s EAFIP initiative (www.eafip.eu) on innovation procurement.