Demand, public procurement, and transformation

This chapter explores the role of the state in influencing and supporting the demand for innovation in the context of transformation with a triple focus. First, it discusses the importance of demand for innovation and transformation. Second, it elaborates on the conceptual underpinning of state intervention on the demand side, linking these interventions with both the transformation debate and the debate on the innovation-based competitiveness of systems. The third and main focus of this chapter is on public demand and public procurement practices for innovation and transformation, as these can be powerful levers to spur both transformation and innovation, which are largely underexplored and underused. The chapter differentiates between various forms of public procurement and the different functions they can play in different transformation contexts. It concludes with a number of high-level recommendations for policy and analysis to further a debate whose value has been recognised but has not yet materialised in any serious policy strategies for procurement.