Functional public procurement in the National Innovation Council (NIC)

The Swedish government took a decision to adopt the National Procurement Strategy in late June 2016 – Ardalan Shekarabi is responsible Minister. Functional procurement is an important element in that strategy. What is described in the procurement documents (förfrågningsunderlagen) in such procurement is functions or solutions to problems rather than products (goods and services). This issue has several times been discussed in the Swedish National Innovation Council (NIC) during 2015-2016.

In practice, functional procurement will not mean any substantial new costs, but an alternative way of using the funds that are already allocated to public procurement. Public procurement accounts for 20 % of GDP. If 10 percent of the 700 billion crowns used for public procurement will stimulate innovation in the future, this corresponds to 70 billion crowns. The public annual research is 35 billion crowns. The funds will be used to obtain products with a higher quality (which will lead to better needs satisfaction and/or problem solving) and lower costs in the long run. At the same time there will be creation of new jobs, exports, profits and welfare.

This means that functional public procurement may develop into the most important instrument in Swedish innovation policy. Since this instrument operates from the demand-side, it constitutes a supplement to research policy and other instruments that drive innovation from the supply side. It could thereby be an important element in transforming Swedish innovation policy from a linear to a holistic one, and thereby making it more efficient.

The possible breakthrough for functional procurement in state policy would not have happened without the notion of ”holistic innovation policy”, without the discussions in NIC (chaired by Prime Minister Stefan Löfven) and if NIC had not operated as a stimulus to policy development.

The national procurement strategy can be found at:

This issue is dealt with in Charles’ paper entitled: “The Swedish National Innovation Council – Governance to replace linearity with holism in innovation policy?” to be presented at the SPRU 50 Year’s Conference, September 7- 9, at Sussex University, Brighton, UK.