How to measure procurement with innovation surveys

Public procurement represents holds significant potential to drive innovation across industries. Despite its importance, the role of public procurement in fostering innovation is underrepresented in the UK Innovation Survey (UKIS). Enhancing this tool to capture procurement's impact can yield vital insights for achieving goals such as sustainability, healthcare advancements, and economic resilience.

Key areas where improved procurement data is critical include:

• Policymaking: Robust data is needed to understand how public contracts incentivise innovation in high-impact areas.
• Measuring green innovations: With increasing focus on sustainability, it is crucial to track whether public procurement supports environmentally friendly technologies and processes.
• Reducing barriers for SMEs: Small and medium enterprises (SMEs) face unique challenges in accessing public procurement opportunities, limiting their ability to innovate through government contracts.

Innovation Procurement Empowerment Centre commissioned experts from the University of Manchester to develop evidence-base that would inform procurement processes and unlock the full potential of government spending to drive the transformation of UK economy. This research brief highlights several gaps in current edition of UKIS, which limit the understanding of procurement's role in stimulating innovation. To address this, the following steps are recommended:

1. Reintroduce and Expand the Survey Questions: Reinstate and broaden procurement-related questions to include details on contracts, revenue from public procurement, and innovation outcomes such as R&D investments or process innovation.
2. Include Sustainability Metrics: Introduce questions specifically targeting green procurement practices to align with the UK’s net-zero and sustainability objectives.
3. Ensure Inclusivity: Extend questions to all firms engaging with public procurement, not just those identifying cooperation with public entities, to minimize underreporting.
4. Capture Barriers to Innovation: Explore challenges like contract complexity and competition, particularly for SMEs, to inform reforms that enhance innovation outcomes through public procurement.

By addressing these gaps, policymakers can better understand how public procurement fosters innovation, ultimately enabling the design of more effective policies that align with broader economic and sustainability goals.