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Opportunities for public technology procurement in the ICT related sectors in Europe
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Opportunities for public technology procurement in the ICT related sectors in Europe

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The term “public technology procurement” can cover both procurements focusing on the early adoption and diffusion of new-on-the market technology (incremental innovation) as well as procurements focusing on the research and development of totally new technology (radical innovation). The study investigates through case studies the way the stimulation of competition between suppliers as well as risk and/or benefit sharing between public and private partners are used as mechanisms to drive innovation in the ICT domain. The study has an ICT focus as well as a research policy focus, looking beyond public procurement as a tool for cost efficient government acquisitions, focusing on procurement as a driver for market development, including the considerations of users and first buyers. Why public technology procurement? First, there is a need for improved public services. The public sector in the EU, as elsewhere in the world, is faced with important societal challenges such as the ageing population, the fight against climate change etc. The quality and efficiency of public services could be significantly improved if public authorities would more rapidly adopt technological innovations available on the market. However some of the improvements that are required in public services to address major strategic socio-economic challenges in a sustainable and affordable way are so technologically demanding that either no commercially stable solution exists yet on the market, or existing solutions exhibit shortcomings which require new R&D. Secondly, there is a need to increase investment in R&D and innovation in Europe. Productivity growth continues to fall behind that of the USA, in particular because of a failure to capitalize fully on the application of ICT; R&D intensity in Europe has stagnated since the mid-nineties, being overtaken by Asian countries such as Japan, China and South Korea and remaining also at a lower level than in the US – with the major part of this gap caused by differences in private sector R&D; and Europe is locked into obsolete traditional (manufacturing) sectors with a relatively low share of ICT–related sectors, a structural trade deficit in high-tech manufacturing and under-investment in services R&D.
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