Guest blog: Procurement for innovation

In turbulent times, there has been some good news. UK tech companies secured a record £5.5bn in foreign investment in the first seven months of this year – more the amount invested per capita in the US tech sector in the same period, according to DCMS. Given that the UK has many great tech companies, some of the best people and, above all, great ideas, this shouldn’t come as too much of a surprise. The level of investment underlines the health of the UK’s tech sector and its increasing importance to the overall economy.

The key findings of the European Digital Economy and Society Index (DESI) 2019 bear this premise out. The UK is shown as the second largest public funder of R&D expenditure in technology, lagging only behind Germany and one of the EU's six main contributors in terms of R&D expenditure in technology.

Its an interesting report but will be uncomfortable reading for some. The UK is ranked at only 11th for digital public services overall and falls as low as 22nd for the user-centricity of its public services.

Government recently published its Technology Innovation Strategy, which describes the foundations government organisations will need to make the most of emerging technologies. Needless to say, procurement for innovation is a feature of the strategy (but not the lynchpin). The Digital Marketplace, the GovTech Catalyst and the various playbooks and standards that have been developed are great ideas but are not in themselves the whole solution.

To many, the words “procurement” and “innovation” are contradictions in terms. If procurement is simply the means that one organisation buys goods and services from another organisation, and innovation simply a new idea or method, then they need not be mutually incompatible - even if procurement is subject to regulation, and innovation mostly isn’t. 

As frustrating as it can seem, procurement regulation exists for a reason. Its purpose is to prevent corruption, to ensure transparency and competition, and provide a level playing field.  Whilst regulation can inhibit innovation - and by its nature can never catch up with it - the competitive principles at the heart of procurement regulation and competition law foster and support innovation.

Government is in a unique position to foster the Gov-Tech sector and overall UK economic outcomes through its own spending decisions. We all expect Government to be an open, non-discriminatory and technologically neutral purchaser. This allows competition, drives value and - above all - allows innovation, as it gives small players and new entrants market access on equal terms.   

Monopolistic lock-in is innovation’s death knell. There are great examples where government is working within procurement’s regulatory framework to genuinely enable innovation – whether through relatively mature channels such as the Digital Marketplace, or new channels such as the SPARK Dynamic Purchasing System. We will need more, and faster, if GovTech is to help Government move the dial and become a leader in digital public services once again.

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