Companies face difficulties in commercialising novel goods and services when potential customers perceive these products as being too risky or expensive. Without first customers and a significant number of sold units that proof their performance under real life conditions, many promising solutions do not make it from the drawing board to the market place.
The public sector represents almost a fifth of Europe's overall gross domestic product and has an even higher market share in areas such as construction, healthcare, environment or mobility. When addressing its procurement needs it could, at the same time, use its purchasing power to help innovative solutions entering the market.
However, not only individuals and private sector organisations, but also public purchasers often shy away from buying such products. This is in particular true when public procurers have no innovation strategy in place, prefer to avoid risks and lack specific knowledge in this field. Therefore, public procurers need also to be supported particularly in facing major societal challenges areas such as healthy ageing, climate change, sustainable construction, energy efficiency and renewable energy, sustainable mobility, resources scarcity and waste management.
The aim is to achieve in Europe innovative procurement markets that are equivalent to those in the United States. While many European Member States and regions have declined to set aside dedicated budgets for pre-commercial procurements (purchase of extramural research and development services) and public procurements of innovative products and services, it seems nonetheless possible to create a European procurement market of at least €10 billion a year for innovations.
It should be noted that these procurement would not only enhance the competitiveness of European industry but improve the efficiency and quality of public services and help addressing major societal challenges at the same time.
Following an open call for proposals in summer 2011, to test the pooling of purchasers across Europe, and the development of co-ordinated or joint procurement of innovative solutions at European level, in early 2012, around eight projects will start and address public procurement needs. Targeted areas will be the one of the Lead Market Initiative and societal challenges.
These projects will provide the opportunity to public procurers to collaborate on common needs assessments, market consultation and involvement, technology and solutions screening and road-mapping. A large part of each project's budget should, however, be spent on the actual purchase of innovative goods and services.
Apart from giving financial aid to these pilot projects, the Commission has contracted a team of experts to analyse the feasibility of running a large-scale programme for supporting both forms of innovation procurement: extramural research and development services and innovative solutions. The findings will be presented in early 2012 and may be implemented within the framework of the upcoming Horizon 2020 programme.
Finally, the Commission will support the creation of a European-wide community, the European Procurement Forum, which brings together like-minded public procurers interested in purchasing innovations and in exchanging experience with international colleagues. Between early 2012 and early 2016, a group of European partner organisations will set up a dedicated interactive website, organise conferences and promote the dissemination of best practices.