Pre-commercial public procurement should become a bridge from research to innovation, says Commission ICT expert group

March 27, 2006

Brussels, 24 March 2006

Proposals to drive forward innovation in the field of information and communication technologies through public procurement were presented yesterday in Vienna by an ad-hoc group of ICT experts from all national administrations. The group, which had been initiated on 11 October 2005 and chaired by the Commission, proposes that national administration should invest more in purchasing innovative products and services that still require further research in the underlying ICT. Such “pre-commercial procurement of innovation” should become an important new driver of the research and development in the 25 EU Member States.

“Europe must create a commercial environment that encourages more rapid innovation and take up of research results”, said Viviane Reding. “The public sector has massive buying power, but it needs the right incentives to share the risks as well as the benefits of investing in new technologies and services.”

A classical approach to public procurement of established products and services is to minimise the risk and to maximise the benefit to buyers. In contrast to this, yesterday’s proposals of the ad hoc expert group for pre-commercial procurement of innovation suggest that buyers should come together to share the risks and the benefits of pursuing novel services and products with the providers themselves. Such an approach would greatly stimulate innovation, increase investment levels and stimulate take-up of related R&D, and at the same time reduce risks through a pooling of resources.

U.S. and Asian economies are already procuring pre-commercial R&D services in line with WTO rules. Such an approach could have a profound impact in the EU, where R&D investment by Member States is much lower than in other regions of the world, and represents only a very small fraction of their public procurement expenditures.

The Commission ad-hoc group of ICT experts that submitted these proposals yesterday includes National ICT Directors, representatives from the Commission services and from the services of the Committee of the Regions. They presented their findings yesterday to a high level conference on ‘Investing in ICT research and innovation’, jointly organised by the European Commission and the Austrian EU presidency to drive the i2010 agenda of a European Information Society for growth and jobs. This conference was attended by researchers, industry representatives, policy makers and the members of the Commission’s advisory group on IST research (ISTAG). The findings of the report are based on interviews conducted with representatives from Member States to get an overview of the current state of play with pre-commercial public procurement in all 25 EU Member States.

To follow-up on the proposals made by the expert group on pre-commercial public procurement, the next step is to explore with those directly responsible for public procurement – in particular national authorities –, opportunities for a number of joint actions in domains such as health, transport, security and government, and also to see whether further legal guidelines are required to facilitate pre-commercial public procurement.

Background

Following the European Council at Hampton Court last Autumn, a group chaired by the former Finnish Prime Minister Mr Esko Aho, underlined the urgency to develop an explicit strategy at European level to use public procurement to drive demand for innovative goods and services: "while at the same time improving the quality of public services and the productivity of Europe’s large public service sector.. ....Actions to mobilise procurement are needed to coordinate or aggregate demand to create sufficiently large orders that make innovation worthwhile."

The European Council on 23-24 March 2006 is expected to consider a number of specific priorities for action related to research and innovation.

Further information:

The report on “Pre-commercial procurement of innovation: A missing link in the European innovative cycle”:

http://europa.eu.int/information_society/research/key_docs/documents/procurement.pdf

Commission’s preparations for 7th framework programme of research and for innovation in Information and Communication Technologies

http://europa.eu.int/information_society/research/vienna_process/index_en.htm

Related site of Austrian Presidency:

http://www.bmvit.gv.at/en/eu_rat/innovation/events/ict2010.html

Commission Communication on “More Research and Innovation - Investing for Growth and Employment” COM(2005) 488 final 12 October 2005

http://europa.eu.int/comm/secretariat_general/impact/docs/ia_2005_3/COMM_PDF_COM_2005_0488_F_EN_ACTE.pdf

Item source: IP/06/373 Date: 24/03/2006

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