Public procurement of innovation: new developments RAPIDE final – Conference Bringing innovation to the market Public procurement of innovation: new developments DG Entreprise et Industrie Direction D « développement des politiques d’innovation » Dr. Bertrand Wert Magdeburg , 15 June 2010

Overview of presentation: 1. Current situation & current innovation policies in the EU New orientations of Europe 2020 & the European Research and Innovation plan: mobilizing the demand… How to cross fertilizes initiatives/ dynamics?

1. Current situation… Overall national innovation performances are diverse Summary innovation performance EU Member States (2008 SII) Source: European Innovation Scoreboard 2009: http://ec.europa.eu/enterprise/policies/innovation/facts-figures-analysis/innovation-scoreboard/index_en.htm Some of the most innovative countries in the world are in the EU. They spend above the average on education, have the highest share of R&D spending as part of the GDP and have instruments to support the uptake of new technologies. The challenge is to spread this level of performance throughout the EU. Innovation leaders: Switzerland, Sweden, Finland, Germany, Denmark, UK Innovation followers: Austria, Ireland, Luxembourg, Belgium, France, Netherlands Moderate innovators: Cyprus, Iceland, Estonia, Slovenia, Czech Republic, Norway, Spain, Portugal, Greece, Italy Catching up countries: Malta, Hungary, Slovakia, Poland, Lithuania, Croatia, Romania, Latvia, Bulgaria, Turkey

2. Current situation… Overall regional innovation performances are diverse Scoreboard is able to replicate the methodology used at national level in the European Innovation Scoreboard, using 16 of the 29 indicators used in the EIS for 201 Regions across the EU27 + Norway. There is considerable diversity in regional innovation performances The most innovative regions are typically in the most innovative countries. Regions have different strengths and weaknesses Regional performance appears relatively stable since 2004 Some of the most innovative countries in the world are in the EU. They spend above the average on education, have the highest share of R&D spending as part of the GDP and have instruments to support the uptake of new technologies. The challenge is to spread this level of performance throughout the EU. Source: European Regional Innovation Scoreboard 2009: http://www.proinno-europe.eu/sites/default/files/newsroom/2010/02/I981-DG%20ENTR-Report%20RIS%20(Web).pdf

1. Innovation policies in the EU Example of the Lead Market Initiative From research & development policies, to innovation policies Lisbon strategy (2000) and its revision: the Broad-Based strategy (2006) Aho’s report (2006) and the demand side policy approach i.e. the Lead Market Initiative (2008-2011) Market and societaly driven more than technology push…

Complementing supply-side innovation policy 1. Innovation policies in the EU Example of the Lead Market Initiative Complementing supply-side innovation policy Demand-side measures - regulation standardisation - procurement clusters… Package = LMI - Fiscal measures - Equity support - R&D funding … Supply-side measures

1. Innovation policies in the EU Example of the Lead Market Initiative Policy tools Standardisation Labelling Certification Legislation Public Procurement Complementary Actions Lead Market Areas e-Health EU Recommendation for interoperability Introduce the Electronic Health Insurance Card EU Patient Smart Open Services large scale pilot funded Sector-specific networks of Contracting Authorities to foster demand for innovation Sustainable construction 2nd generation of Eurocodes Screening of national building regulations SMEs guide on collaborative working schemes in construction Protective textiles Inventory of all relevant standards Revision of the PPE Directive Training platform for buyers and users On the left hand side, you see that we identified 6 markets. For each, we made an action plan and here are some examples of the actions. SMEs are important in these markets. SMEs accounted for 90% for GDP in construction. Even in eHealth, there are over 3000 SMEs active in Europe. Services are important, even also for protective textiles were the maintenance of these high tech uniforms and garments is a high added value industry. Each action is implemented by a lead DG in the European Commission, that works together with other DGs and stakeholders to implement the actions. You note that funding does NOT play a big part in the LMI. The LMI is a demand-side policy approach. We do use some FP7 and CIP funding to fund complementary activities such as studies and networking, and investing into near-to-market projects, such as the bio-based products pilot plants. In May, we will announce the results of a CIP call to fund networks of public procurers in the lead markets. We would like small consortia of the best public procurers to come together and see how public procurement of innovative goods and services in a specific lead market can be improved. One of the core tasks of these networks is to exchange best practice in technical dialogue, so that hospitals, local councils, governments etc know what innovative solutions are out there on the market. Strongest industries in this region http://www.clusterobservatory.eu/index.php?country_ID=France&region_ID=NUTS-FR43 For this region, check are: Franche-Comté Automotive24 7670.95%5.387.60%***MediumStrongFranche-Comté Metal20 6890.53%2.986.35%**MediumWeakFranche-Comté Finance11 8740.17%0.943.64%*MediumWeak But also power and metal (link recycling) This is an overview of activities started in 2008. People can get more info by going to our website (updated hopefully before Easter) and by looking at the action plans. Bio-based products Product performance standards Inventory of legislation affecting bio-based products FP7 call on bio-refinery pilot plants Recycling CEN Packaging Standards Waste Framework Directive Financial support (CIP) for market replication projects Renewable energies Adopting minimal energy performance requirements Mandatory national targets for 2020 Guide on funding available for RE demonstration and pilot projects Running activities in 2010

1. Innovation policies in the EU Example of the Lead Market Initiative Public procurement: Public Procurement Networks (LMI) Situation: Too much focus on initial costs: many key decisions are taken on the basis of the lowest costs instead of quality, safety and environmental criteria and life-cycle costs. Action: Establish a network between public authorities in charge of procuring sustainable construction

1. Innovation policies in the EU Example of the Lead Market Initiative From September 2009 to September 2012: 3 networks 1/ “ENPROTEX”: Firebuy (Lead), the National Procurement Agency for the fire and rescue service in England (UK), Belgian Ministry of the Interior IBZ (BE), Dutch national Disaster Response Agency LFR (NL) http://www.enprotex.eu/index contact: joshua.osifeso@firebuy.gov.uk Potential results: establishing and sustaining a specialised platform of European Public Procurement, cooperation among public procurers; providing an interface with both end-users and manufacturers, forward commitments for the procurement.

1. Innovation policies in the EU Example of the Lead Market Initiative From September 2009 to September 2012: 3 networks 2/ “SCI-NETWORK”: ICLEI (lead) Local Governments for Sustainability (Europe), Transport for London TFL (UK), City of Torino (IT), Department for Environment, Food and Rural Affairs (UK), Dutch National Procurers Association PIANOo (NL), Culminatum, Helsinki Region Centre of Expertise (FI), University of Klagenfurt (AT), Motiva, National Agency for Energy Efficiency and Renewable Energy (FI) http://www.iclei.org/procurement contact: simon.clement@iclei.org Potential results: developing work Streams and Discussion Groups on https://eulab.viadesk.com in 1. Sustainable renovation - innovative approaches, 2. New technical solutions - innovative solutions for energy efficient buildings, 3. Procuring innovation - procedures and methods, 4. Developing a business case for sustainable construction – life-cycle/whole-life costing (LCC/WLC), 5. Financing & contracting sustainable buildings – innovative solutions, 6. Environnemental standards - applications in construction procurement. Public authorities who are interested in participating in the online working groups should send an e-mail to sci-network@iclei.org stating their areas of interest.

1. Innovation policies in the EU Example of the Lead Market Initiative From September 2009 to September 2012: 3 networks 3/ “LCB-HEALTHCARE”: Department for Business Innovation and Skills BIS (UK) (lead), Netherlands Organisation for Applied Scientific Research TNO (NL), Norwegian Directorate for Health Affaires(NO), Cracow Rydygier Hospital (PL), Department of Health DH (UK), European Health Property Network EuHPN (NL) http://lowcarbon-healthcare.eu/ contact: gaynor.whyles@jeraconsulting.com Potential results: Develop a sustainable, self-funding, trans-national network of public sector and related organisations, Undertake a series of activities that will stimulate demand for, and support procurement of, innovative solutions, Undertake at least one lead market demonstrator pilot in each of the four participating countries , Create a Low Carbon Buildings Hub for health care procurement professionals and the European supply chain, Disseminate the lessons to both the European health care sector and beyond to other public sector procurers

2. New orientations of Europe 2020 http://ec. europa 3 thematic priorities Smart growth: developing an economy based on knowledge and innovation Sustainable growth: promoting a more efficient, greener and more competitive economy Inclusive growth: fostering a high-employment economy delivering social and territorial cohesion 5 EU headline targets – translated into national ones including 3% investment in R&D (% of EU’s GDP) 7 initiatives majeures incluant l’“Union pour l’innovation”: Innovation Union, Youth on the move, A Digital Agenda for Europe, Resource efficient Europe, An industrial policy for the globalisation era, An Agenda for new skills and jobs, European Platform against Poverty

Climate, energy and mobility 2. New orientations of Europe 2020 Smart Growth Sustainable Growth Inclusive Growth Innovation « Innovation Union » Climate, energy and mobility « Resource efficient Europe » Employment and skills « An agenda for new skills and jobs » Education « Youth on the move » Competitiveness « An industrial policy for the globalisation era » Fighting poverty « European platform against poverty » Digital society « A digital agenda for Europe »

2. New orientations of Europe 2020 Orientations of the European Research & Innovation Plan Focusing R&D and innovation on societal challenges Climate, resource efficiency, health, demographic change Broadening policy scope of innovation Support for non-technological, design, services, user innovation and innovation in public sector/services Ensuring partnership and coordination Between policies, demand and supply side actions Between EU, national, regional policies, instruments Strengthening innovation chain - from ideas to market Accelerate the path from innovative ideas to new products Stronger demand side - Public procurement, standards, regulations

2. New orientations of Europe 2020 “A Single Innovation Market” Problems Lack of harmonised regulations for innovations (e.g. type approvals of green vehicles) EU standard setting too slow Public procurers lack incentives, knowledge or scale to benefit from innovation Actions 14. Screen regulatory frameworks linked to Partnerships (2011) 15. Independent review of EU standardisation system (2012)+ anticipate standards in R&D projects 16. Member States to set aside budgets for SBIR type procurements, with EC technical/ financial support (2012)

3. How to cross fertilizes initiatives/ dynamics? Guides, recommandations, networking, legal clarification, development of innovation policies, financing… 2006: .STandards in European Public Procurement lead to INnovation http://standards.eu-innova.org/Pages/Steppin/default.aspx 2007: .Guide on dealing with innovative solutions in public procurement – 10 elements of good practice http://www.proinno-europe.eu/admin/uploaded_documents/procurement_manuscript.pdf 2008: .3 Public Procurement Networks/ 3 réseaux d’acheteurs publics http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/files/ppn_factsheet_en.pdf October 2009: .Workshop “Linking Innovation and Public Procurement” http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/pp_workshop_en.htm

3. How to cross fertilizes initiatives/ dynamics? March 2010: .“Promoting Innovation through Public Procurement: Best Practice & Networking” http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/pp_conference_en.htm May 2010: .Starting of the EEN working group http://www.enterprise-europe-network.ec.europa.eu/index_en.htm .The INNO-Partnering Forum: a consortium of 6 european innovation agencies: Enterprise Ireland (IE), FFG (AT), SenterNovem (NL), Tekes (FI), Technology Strategy Board (UK) and VINNOVA (SE) Unleashing the innovation potential of European SMEs http://ec.europa.eu/enterprise/policies/innovation/future-policy/consultation/files/138_inno_forum_en.pdf July 2010: .“Feasibility study on future EU support to public procurement of innovative solutions” .Starting of the Enterprise Europe Network specific actions on public procurement + a Working Group dedicated to “Innovation – public procurement – SMES” in order to deliver guidance on SMEs access to Public Procurement and guidance to procurers to foster SMEs involvement in their calls: contact: Toni Saraiva toni@eiscltd.eu September 2010: Belgian EU Presidency organises a seminar on: “From knowledge to competitiveness” where public procurement of innovation will be on the agenda. For more information contact: delphine.lefebvre@economie.fgov.be 2011: .Pilot project PPN de 2nd generation + financing system of innovative procurements . PCP networks/PCP networks 2nd generation - DG INFSO

Thanks for your attention! References: Homepage Lead Market Initiative & procurement: http://ec.europa.eu/enterprise/policies/innovation/policy/lead-market-initiative/public-proc_en.htm “Innovation unlimited” blog: http://blogs.ec.europa.eu/innovationunlimited bertrand.wert@ec.europa.eu