Public procurement of innovation and regional development in peripheral areas

Abstract

Public procurement of innovation (PPI) is a demand-side innovation policy tool. The use of PPI to foster innovation and regional development is not a trivial task, due to the combination of different goals that may be contradictory. The role of PPI to promote regional development may be more relevant in peripheral regions, due to the institutional thinness and the lack of technological capabilities. The main aim of this paper is to assess the potential role of PPI to contribute to regional development. It analyses the empirical evidence of the use of PPI in the Spanish regions, focusing on the main characteristics of the enterprises. Special attention is given to the healthcare sector, due to its relevance in public procurement. In this sense, the pioneer experience of Galicia (Spain) is illustrative of its use in a peripheral region. The results suggest that the effects on regional development depend on several features, such as the productive structure and the innovation capabilities of the region. The coordination of supply and demand-side policies seems crucial to obtain better results regarding innovation performance and regional development.