Pre-Commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships in the EU: Rationale and Strategy
IEFE - Centre for Research on Energy and Environmental Economics and Policy, Working Paper No. 89, October, 2016
40 Pages Posted: 12 Oct 2016 Last revised: 9 Nov 2017
Date Written: October 28, 2017
Abstract
Abstract: We discuss public procurement instruments for acquiring innovation, focusing on the European Pre-commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships. We analyse in particular how firms’ innovation incentives are affected by: (i) economies of scope and externalities between R&D and large-scale production; (ii) the degree of specificity of the innovation; (iii) the presence of Small and Medium Enterprises (SMEs) in the market and the level of market competition; (iv) the risk of market foreclosure and supplier lock-in. Our study contributes to the literature on incentives in demand-side innovation policy by tapping into the contractual design features and by offering relevant implications for academics and policy makers. (107 words)
Keywords: Keywords: Innovation, Demand-side policies, Incentives, Pre-commercial Procurement, Public Procurement of Innovative Solutions, Innovation Partnership, Bundling, Rationales
JEL Classification: JEL Code: O31; O32; O38; H57
Suggested Citation: Suggested Citation