The power of public procurement will be harnessed systematically for the first time to stimulate innovation, the government said on Thursday.
A commitment to create demand for innovative products and services by targeting £150bn ($305bn) a year worth of public spending was the most eye-catching feature of the wide-ranging “innovation nation” white paper.
“The government has built up the supply side of innovation successfully [by increasing research funding] over the last 10 years,” said John Denham, innovation, universities and skills secretary. “Now it is time to focus on the demand side.”
The white paper builds on several recent reports, including Lord Sainsbury’s review of science and innovation policy, which urged the government to make more imaginative use of procurement to stimulate new technology.
Every government department will “publish an innovation procurement plan, setting out how it will embed innovation at the heart of procurement practices and encouraging them to engage with businesses at an early stage”.
At the same time, the government will relaunch its Small Business Research Initiative, which the white paper says has failed to reproduce the success of its US counterpart in stimulating small, high-tech companies through public procurement.
The new SBRI will be focused more tightly on technology-based research. Mr Denham admitted that government buyers often opted for safety-first “industry standard” solutions. But this approach could hinder the adoption of innovative solutions “which might become the industry standard in five years’ time”.
He has asked the National Audit Office to report on how it might treat departments that went for bold, new solutions. Mr Denham said he thought that if departments went through the right procedures and took sound decisions they “should not be criticised if an innovative approach doesn’t work”.
Mr Denham denied that an innovative approach to procurement would necessarily cost more than going for safe, standard solutions. For every innovative solution that failed, the government could save money overall from the ones that succeeded, he said.
Other initiatives include:
● providing 1,000 innovation vouchers a year by 2011, which small and medium-size businesses can use to work with a university, college or research organisation of their choice to develop a new product or service;
● doubling the number of knowledge transfer partnerships between businesses and higher education to boost competitiveness and productivity;
● introducing a new specialisation and innovation fund for the further education sector;
● expanding the network of National Skills Academies.