Public procurement as an innovation policy tool: The role of institutions

Policy-makers in the EU have increasingly emphasised the role of public procurement as a policy instrument that can be used to stimulate innovation. This development reflects and responds to a growing concern among EU member states about how to maintain competitive advantage in an economic environment increasingly subject to global competition. To contribute to these emerging policies, this paper develops an innovation theory-based approach regarding public procurement of innovations, by elaborating an institutional focus. In contrast to current institutional approaches in innovation studies, the approach applied here brings in the often neglected endogenous perspective. The empirical studies cited in this paper suggest that the needs of endogenous, or informal, institutions also need to be taken into account in order to understand better the institutional set-up enabling public procurement of innovations.