Pre-commercial procurement, procurement of innovative solutions and innovation partnerships in the EU: rationale and strategy. Issue 8 (17th November 2018)

• Record Type: Journal Article
• Authors: Iossa, Elisabetta; Biagi, Federico; Valbonesi, Paola
• Is Part Of: Economics of innovation and new technology. Volume 27:Issue 8(2018)
• Page Start: 730
• Page End: 749
• Publication Date: 2018-11-17
• Subjects: Innovation -- demand-side policies -- incentives -- pre-commercial procurement -- public procurement of innovative solutions -- innovation partnership -- bundling -- rationales; O31 -- O32 -- O38 -- H57; Technological innovations -- Economic aspects -- Periodicals; 338.06405
• DOI: 10.1080/10438599.2017.1402431
• Languages: English
• ISSNs: 1043-8599

Abstract

ABSTRACT: We discuss public procurement instruments for acquiring innovation, focusing on the European Pre-commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships. We analyse, in particular, how firms' innovation incentives are affected by: (i) economies of scope and externalities between R&D and large-scale production; (ii) the degree of specificity of the innovation; (iii) the presence of Small and Medium Enterprises in the market and the level of market competition; (iv) the risk of market foreclosure and supplier lock-in. Our study contributes to the literature on incentives in demand-side innovation policy by tapping into the contractual design features and by offering relevant implications for academics and policy-makers.