Charles in Policy Dialogue on functional public procurement

On May 25, 2022 Charles participated in a panel discussion organized by the Committee on Innovation, Competition and Public-Private Partnerships, hosted by the United National Economic Committee for Europe (Geneva). The focus was on how to unlock the potential of public procurement to boost the innovation needed for the 2030 Agenda and for the Circular Economy. Hence, the discussion focused on one particular innovation policy instrument: public procurement.

United Nations, photo credit: eGuide Travel | cc

In traditional public procurement, public agencies describe the products that they want to buy. We call this “product procurement” If products can be described in the procurement documents, it is because they exist and hence, they cannot be regarded as innovations. If the products demanded by public agencies are described in technical terms, the procurer will get exactly those products – and not innovations. Hence, “product procurement” is an obstacle to innovation. One cannot describe not-yet-existing products in advance. Referring to philosopher Karl Popper we cannot predict future knowledge or future innovations.

An alternative to product procurement is that the procuring organization describes the problems, missions or functions that the buyer want to solve or fulfil. When such a description exists, we use the term “functional procurement”. Functional procurement is when a public agency buys products that perform functions that provide solutions to problems. In the case of functional procurement, the procuring organization specifies what is to be achieved rather than how. Functional procurement can lead to new products (innovations) developed in the procurement process, and hence, it opens for innovations. These innovations can, for example, contribute to saving the climate, save the environment or curing diseases.

  1. Please read more about functional procurement: Edquist, C and Zabala-Iturriagagoitia, J M (December 2020). Functional procurement for innovation, welfare, and the environment. Published in Science and Public Policy, December 2020.Download at: Alternative link here.