Barriers to public procurement for innovation: A case study of ICT projects in the specialised health services in Norway
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In this study we have looked at the concept of public procurement for innovation, and tried to reveal the main barriers that prevent successful procurement for innovation to take place. A natural next step has been to explore the nature of these barriers, and through this understand how they can be managed. In order to accomplish this, we have conducted a case study on ICT projects in the specialised health services, building on existing literature in the fields of purchasing, innovation, public management and public procurement.Similar to scholars before us, we conclude that the key to public procurement for innovation is to have a collaborative relationship between the public customer and the supplier. By this we understand interaction in all the phases of the procurement, including the development and piloting stages of the innovation process. These stages, we found, can either be a part of the commercial procurement, or take place in a pre-commercial procurement preceding it. In case of the first, it is important to ensure that the contract does not restrict the conditions for the development stage with too many specifications. In the case of the latter, the challenge is to avoid a gap between the pre-commercial and ensuing commercial procurement.In the end, collaborative relationship is about the interaction between people in the supplying and buying organisation. In our case we identified three main actors, namely the supplier at one side, and the procurer and user at the other. We argue that collaborative relationship can only take place if they have the ability (the right competence), willingness (the right incentives) and possibility (the right resources) to take part in such a relationship, and if any of these three factors are not present, they constitute a barrier to public procurement for innovation.Underpinning all of this is the requirement for a long-term strategic thinking. We argue that public procurement for innovation is distinctly different from regular procurement in the sense that it sets out to explore new possibilities, rather than exploit existing solutions. The advantages of innovation will commonly not manifest itself in the short term, but can have a significant impact on the activities in the long run, and ultimately lead to better public services. A public organisation that primarily focuses on efficiency in the short term will fail to see this benefit, and as such not be able to provide the competence, incentives and resources required for public procurement for innovation to take place.For practitioners our study comes with implications particularly for managers in procurement and operations, who have to work on providing the conditions for collaborative relationship to take place in the cases of public procurement for innovation. This requires support from top management, who has to see the long-term benefit of this approach. For researchers, we have provided a model on public procurement for innovation, which will be useful for further studies.