Public procurement and innovation: a systematic literature review

Abstract

Public procurement and innovation is the subject of a growing body of literature. This article systematically reviews the existing research, documenting its evolution and highlighting dominant and overlooked themes. We find a dramatic increase in the number of journal publications on this topic since 2008, the existence of thematic communities within the literature, and a focus on empirical work. We analysed keywords and abstracts to identify the broad boundaries of research on public procurement and innovation as well as particular areas of focus in the literature. We found a variety of terms used to describe the application of public procurement as an innovation policy tool and a variety of thematic interests and theoretical foundations. We argue that this makes it challenging to consolidate the research on the topic. From a policy perspective, the geographical context of research is overwhelmingly concentrated in OECD and EU countries.

Public procurement for innovation through supplier firms' sustainability lens: A systematic review and research agenda

“…According to Edquist et al (2015), public procurement for innovation (PPI), can be realised mainly by aligning public procurement to stimulate sustainable innovative products development in upstream supply chain management. However, to date, existing knowledge of the role of public procurement in driving innovation has largely focused on the interests of public sector buyers—paying little attention to suppliers of public goods and services (Kundu et al, 2020). A limited understanding of supplier perceptions of, and capabilities towards, PPI has partly contributed to a failure to fullycapture the impact of sustainable innovation through public procurement (Uyarra et al, 2014).…”

“…Prior studies have largely viewed the impact of public procurement on innovation as a linear process—implying a positive relationship between PPI and innovation impacts. Accordingly, they have often overlooked the conditions under which suppliers participate in public procurement processes aiming to foster innovation and lack understanding of how those conditions impact sustainable innovation outcomes (Kundu et al, 2020; Uyarra et al, 2014).…”

“…The PPI literature advances three main justifications for the public sector using its public procurement function to stimulate innovation (see Edquist et al, 2015; Kundu et al, 2020). The first of these relates to the buyer–user rationale .…”

“…With the conceptualisation of user‐led innovation initiatives, public buyers, through their desire to address sustainability challenges, can urge users (either their officials or beneficiary citizens) to consume certain desirable products or services that meet sustainability standards to create new needs. The second of these justifications is the market/system failure rationale (Kundu et al, 2020). Within this market failure scenario, government agencies support critical industries by providing incentives, through government purchases, to improve the abilities and capacities of suppliers to exploit their full innovative potential to produce sustainable products.…”

Will the Volume-Based Procurement Policy Promote Pharmaceutical Firms’ R&D Investment in China? An Event Study Approach

“…Some scholars propose that whether the government has planned a clear innovationoriented procurement policy or not, their decisions on price, volume, and standard will have a positive or negative impact on innovation of corresponding industries participating in government procurement [4,31,32]. The question of whether the "4 + 7" volume-based procurement policy promotes or inhibits the R&D investment of pharmaceutical firms can be transformed into the following question: does the high R&D investment alleviate or aggravate the negative market reaction during the announcement of "4 + 7" volume-based procurement policy?…”