Public procurement of innovation and local authority procurement: procurement modes and framework conditions in three European cities

Abstract

Local authorities present complex implementation settings for public procurement of innovation (PPI) practices and include a range of barriers, yet their proximity to citizens and local economic actors suggests that they are likely to encounter unmet needs in advance of national governments, creating potential to act as lead users. This paper develops a conceptualisation of the local authority procurement environment, using it as a framework for analysing the potential for PPI in three city authorities across Europe, representing three distinct modes of public procurement: functional procurement, tactical procurement and strategic procurement. The paper proposes that local authorities are broadly characterised by cyclical, geographically bounded procurement activity, which contains potential for stimulating incremental innovation through normal procurement activity if the external institutional setting is permissive. The paper suggests conditions for increasing the possibilities for more disruptive innovation through local authority procurement and areas for further research.