Innovative public procurements
Funding is targeted at public procurement units that aim to renew their services and operations.
The Finnish public sector annually spends some EUR 27 billion on procurement. By harnessing innovation, the public sector can provide citizens with better services at lower cost. Responding to challenges requires an open-minded search for solutions and operating practices. More innovations should be demanded from service and product providers. The public sector can overcome the demands it will face over the coming decades based on fresh innovations. In the best-case scenario, the public sector can create new markets.
The target group consists of procurement units with
- an opportunity and a need for long-term development of services and operations
- the ability and the resources to conduct innovative procurement
- the willingness and strategic commitment to thoroughly reinvent their procurements
What is a Young Innovative Company like?
Promotion of innovations in public procurements requires that those procurements be specified, in cooperation between providers and end users, in order to create a need for the markets to develop new solutions. This could mean goals that are challenging or creation of new kinds of parameters for procurements. The goal is to create added value, for example
- by having lower life cycle costs
- by offering better quality
- by employing innovative and more efficient production processes
- by environmental friendliness
Three types of procurement
1 Purchase of a new product or service
A product or service satisfying the requirements of the procurement unit cannot be found in the markets. The procurement should clearly improve the existing solutions, or lead to the development of a brand new or improved version. For example more strict environmental demands may require innovations. The procurement focuses on the purchase of a product to be developed or purchase of a service.
2 Pre-commercial procurement
If a product or a service that would satisfy the requirements of the procurement sought is not available on the market and the demand at the time is too meagre to motivate companies to carry out development at their own risk, the public authority can resort to competitive tendering for the research and development work.
Also in pre-commercial procurements, the aim is that more demand is created for the product or service to be developed. For companies, procurements can offer a development environment and close cooperation with top users, which will help in finding access to the markets. Pre-commercial procurement focuses on purchasing research and development.
3 Catalyst procurement
There may be market demand for new solutions under development in their prototyping phase, but the bottleneck in accessing markets is lack of trust concerning the performance or operation of a new solution. A public authority can act as a top user and offer a test environment for the completion, operational testing and verification of performance for the new solution.
Catalyst procurements reduce companies' risks on the market and speed up market access. Unlike pre-commercial procurements, catalyst procurement mainly targets a nearly new product or service.
Procurement size and cooperation
The procurement size must be large enough to boost the sector in question, at least on a regional scale. The planning and preparation of innovative public procurements must include cooperation with potential providers and end users.
The amount of Tekes funding
Tekes typically grants funding for 50% of the project's total costs. The funding is paid retrospectively, based on the recipient's project report and cost statements.