Buyers' Role in Innovation Procurement: Evidence from U.S. Military R&D Contracts

Public Procurement as an Innovation Policy: Where Do We Stand?

“…These results suggest that the death of managers leads to a disruption in specialized human capital that is difficult to replace. Decarolis et al (2021) also discuss the possible mechanisms behind the buyer's role. Better work environments do not compensate for the sudden loss of specialized human capital through higher levels of perceived office cooperation, skills, or incentives.…”

“…This paper treats cooperative agreements as a hybrid instrument between grants and PPI. See Bruce et al (2019), de Rassenfosse et al (2019), and Decarolis et al (2021 for more details on RDP and cooperative agreements.…”

“…Causal evidence on the relevance of the demand side for publicly funded R&D was first provided by Bruce et al (2019) and Decarolis et al (2021). The former study emphasizes that federally funded standard R&D grants in the US have worse innovation outcomes than cooperative agreements precisely because the buyer has greater discretion over cooperative agreements.…”

Bureaucratic Frictions and Innovation Procurement

“…1 Innovation scholars argue that buyers play a key role by communicating needs and specifying the functional requirements that procured activities or goods must fulfill (Edquist 2015). Despite empirical evidence confirming that contracting personnel have a direct impact on innovation outcomes (Bruce et al 2019;Decarolis et al 2021), the underlying causal mechanisms remain a black box. Unpacking this issue promises to shed light on how bureaucracies may promote (or stifle) innovation (Kelman 2021).…”

“…Unlike Bruce et al (2019), our results show that more oversight in the acquisition process results in better contract performance. Decarolis et al (2021) provide the first empirical quantification of the role of public buyers in the success of R&D procurement. In particular, the authors exploit variation in manager deaths across agencies and years to estimate the probability that contracts deliver patented inventions.…”