This report explores the opportunities for innovation from local government procurement, with a special focus on Greater Manchester.

Key findings:

• Procurement is the process of acquiring goods, works and services by government or public sector organisations. Besides trying to deliver value for money, public procurement also aims to further social inclusion, sustainability, regeneration, employment generation and support for small businesses.
• Procurement is much broader than the activities of the procurement departments.
• Central procurement units often have little involvement in many important strategic procurement and commissioning decisions. Procurers must regain influence (by increasing their institutional profile and engage only in core activities with true leverage).
• Procurement will have an influence on innovation. (Suppliers and the supply chain will adapt to the signals of public demand and respond with innovative solutions.) Discussions on procurement of innovation cannot take place in isolation. They should recognise both complex organisational issues and diverse, often conflicting, policy goals.

In today's economy, local authorities are being expected to do more with less. Tight financial constraints leave local authorities with a difficult balancing act between ensuring good quality and more efficient public services. Public procurement can be a good way of increasing efficiency while minimising the impact on frontline public services.

This research aims to develop understanding of the relationship between procurement, innovation and the local economy. It identifies case studies which reflect he ways in which local procurement can stimulate innovation, look at preconditions for local procurement to stimulate innovation, and derives policy recommendations.

Author:

Dr Elvira Uyarra, Manchester Institute of Innovation Research