1. Demand-led Innovation Policies Innovation Procurement
Dr. Bertrand Wert
DG Enterprise and Industry
Policy Development for Industrial Innovation
PUBLIC PROCUREMENT of INNOVATION: Kick-off meeting of the Fired-IP project
11 June 2012 / London (UK)

2. Where are we coming from? Where are we? Where are we going?
1. Demand-driven inno. policies; LMI Public Procurement Networks (1.0) Outcomes
2. Call for proposal ENT/CIP/11/C/N02C011 on Public Procurement Networks of Innovation 2.0
3. Revision of 2004 Directives novelties & HORIZON 2020

3. Demand-driven innovation Policies & Innovation procurement Current activities: Lead Market Initiative Where are coming from?

4. Supporting market VS supporting technology push
Public policies tools for action
Supply and demand-led innovation policy tools
Measures from the demand-side
- Regulation
- Standardisation
Lead Market Initiative –
Towards a policy mix
- Public procurement (PCP/PPI)
Intention:
Supporting market VS supporting technology push
- Fiscal Measures
- Financing R&D
- Equity support
- Grants, loans
- Training, fairs
- ...
Measures from the supply side 4

5. Why supporting demand of innovation & innovation procurement?
Potential lever for action: 19% of EU GDP
Foster & accelerate access to market for innovative solutions
Foster EU Internal Market to benefit of EU businesses (SMEs)
Delivering better EU pubic services/ Societal challenges
Policy mix and international rising field of innovation support policies

6. What is innovation procurement? Composed of 2 main aspects
Following the need assessment realised by the procurer there are 2 possibilities
1/ Procurement of innovative solutions that do not require R&D = Public Procurement of innovation
 Normal procurement procedure/directives
2/ Procurement of innovative solutions that require R&D = Pre-Commercial Procurement
 Working under R&D exemption of the procurement procedure/directives

7. Main difficulties of procurers purchasing innovative solutions?
Wrong incentives
Lack of knowledge and capabilities on technologies, innovations, market developments
No strategy that aligns public procurements with public policy objectives (e.g. health, environment, transport), and with R&D&I support programmes
Fragmentation in demand
Difficulties for innovative SMEs to be involved in public procurement as direct beneficiary/ client of a purchasing authority

8. Lead Market Initiative 09-12’
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
For this region, check are: Franche-Comté
Automotive % %***MediumStrongFranche-Comté
Metal % %**MediumWeakFranche-Comté
Finance % %*MediumWeak
But also power and metal (link recycling)
This is an overview of activities started in 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
Lead Market Initiative 09-12’
Policy tools 8

9. Cities: sustainable construction & rehab.
“SCI-NETWORK” Sustainable Construction & Innovation through Procurement : ICLEI (lead) Local Governments for Sustainability (Europe), Transport for London TFL (UK), City of Torino (IT), 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)
Results:
120 organisations are participating in the pilot phase
Online Forum 5 Working Groups WG: application of environmental standards in renovation; new technical solutions; procuring innovation; whole-life costing; financing & contracting.
WG for helping public sector to become key driver for sustainable innovation
WG encourage knowledge & experience sharing, identifying best practice, innovative technologies & products relevant to public authority
WG will engage with the market to identify the best solutions: Online forum developed
contact:

10. Fire-brigades protective garments
“ENPROTEX”: Dutch national Disaster Response Agency LFR (NL), Belgian Ministry of the Interior IBZ (BE)
Results:
A web-portal for public procurers and SMEs
Innovation mapping in textile research on protective clothing
Providing industry with forward commitments to meet future needs of procurers
A Personal Protective Equipment public procurers network is under development
Dissemination at national and international level.
Discussions with industry on barriers to innovation as well as dialogue with SME associations on involvement of SMEs in innovation and the supply chain
Model for tender documents will be produced
contact:

11. Low carbon Hospitals
“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), Rawicz Hospital(PL), Department of Health DH (UK), European Health Property Network EuHPN (NL)
Results:
Develop a sustainable, self-funding, trans-national network
Stakeholders' consultations commenced at the European Congress on Healthcare Planning and Design in June 2010 in order to develop guidance and recommendations for European hospitals on how to procure innovation
A survey of barriers to investment in low carbon solutions available
A European state-of-the-art report
Several procurement of innovation realised: e.g. "Ultra Efficient Lighting for Future Wards" in the Rotherham hospital (UK): by implementing a Forward Commitment Procurement project refurbishment leaders expect: energy consumption saving of 30% or €5,200 for 40 beds over 10 years, and Maintenance Saving of 88% or €15,400 for 40 beds over 10 years.
contact:

12. Rotherham Ultra Efficient Lighting FCP (€2M)
Sweden
Fagerhult – Luminaires
Ecophon – Acoustic Tiles
Sweden
Lund University,
United Kingdom
Cundall – Lighting Designers
Austin Smith Lord – Interior Designers
Wandsworth – Nurse Call Systems
EX-OR – Lighting Control UK
Kings College London,
De Montfort University,
Germany
OSRAM – LED’s, Lamps, Control Gear
Discuss
Pan European collaboration of designers, engineers, manufacturers & researchers.
Discuss research and the realisation of research into product design.
Requires multi-discipline teams to truly create / deliver innovation,
Brings curiosity driven research and market needs / product development together.
Rotherham Hospital is a 500 bed acute unit in the North East of England
New SME created through the FCP process. 12

14. Discuss briefly the solution. European IPR Prototyping
FCP process timing,
Credible buyer promoting private investment,
Key benefits of FCP. These align well with the feedback to CSF, i.e.
Demand driven innovation,
Focus on Societal Changes
Brings curiosity driven research and market needs / product development together. 14

15. Innovation procurement Current activities: Towards H2020 “2
Innovation procurement Current activities: Towards H2020 “2.0 networks” and 2013 CIP-EIP call for proposal Where are we?

16. Current activities
8 new networks of European Public Procurers of innovation covering the following fields 1/ Combating climate change: Innobuild (Lyngdal Kommune (NO)) 2/ Improving care for senior citizens/active aging: EcoQuip (Business Innovation and Skills (UK)), Happi (Réseau achats hospitaliers d’Ile de France (Paris, FR)) 3/ Fostering energy efficiency: Prolight (Transport for London, UK), Fired-up (London Fire Brigade, UK), Spea (Barcelona city, SP) 4/ Supplying better mobility infrastructure: Syncro (Conseil Général de l’Isère (Grenoble, FR)) 5/ Creating more healthy working conditions: Innobuster (Austrian central purchasing authority AT)) 16

17. “The Innovation Procurement Hub”
Current activities
“The Innovation Procurement Hub”
Project leader: ICLEI, European platform of sustainable cities (Freiburg in Brisgau, DE) contact:
Future activities for 2012 – 2016
Development of an innovation procurement database
European prize for the best innovation procurements
Maintenance and development of a European user-friendly and interactive website:
Representing the European Innovation Procurement Community
Development of personal exchange and/or joint training activities on PCP and PPI
Drafting and compilation of guidelines in innovation procurement 17

18. Current CIP-EIP type of activities supported
Current activities
Current CIP-EIP type of activities supported
1/ Preparation phase: financial support ≤ 95%
Capabilities improvement: trainings, workshops
Procurement strategies development
Meeting the market: state-of-the art, technical dialogue, market consultation
Development of functional specifications
Forward Commitment Procurement
Standardisation, certification and/or insurance
Networking activities to Develop a Joint Procurement
2/ Procurement phase: financial support ≤ 20%* (€ max per consortium for real procurement co-financing)
Specification and publication of a (joint or coordinated) call for tender.
Implementation of a (joint or coordinated) call for tender (including marketing)
(Joint) evaluation and selection of proposals
(Joint) monitoring and evaluation of projects

19. Implementation of the project - important
Current activities
Implementation of the project - important
SPECIFIC OBJECTIVE (page 8-9 ToR)
1/ Development of public procurement of innovative solutions (preparation phase and implementation phase):
· to create buyers groups dedicated to prepare for the procurement of innovative solutions (including needs assessment, market consultation (involvement of the supply chain (in particular European SMEs)), specification development, risk management), and the actual procurement process (including defining the conditions for the collaboration between contracting authorities, sharing resources in the evaluation of bids and related procedures, translations and publicising the calls for tender);

20. Implementation of the project - important
Current activities
Implementation of the project - important
SPECIFIC OBJECTIVE (page 8-9 ToR)
2/ and, with the possibility to implement within the time-line of the project a public procurement of innovative solutions co-financed by the European Union; resulting in the first application / commercialisation of innovations of European Union relevance which
have already been technically demonstrated with success but which, owing to residual risk, are not yet commercially available in the market in which the procurement authority operates. This includes solutions based on existing technologies that are to be utilised in a new and innovative way, as well as non-technological innovations. The solutions have to be
new to the contracting authority and new to the Internal Market. By the implementation of the procurement of innovative solution we mean:
The publication at Official Journal;
The evaluation of the tenders;
The conclusion of the award procedure followed by the payment to the
"beneficiary of the market" (refer to part 4 "EU Financing").

21. Implementation of the project - important
Current activities
Implementation of the project - important
Nota Bene for Strand 1 (page 15 ToR)
A maximum of 20% of the price of actual purchase(s) of innovative solution (s) will be
eligible, if the six following conditions are met:
1. The purchase takes place during and as part of the action and is otherwise eligible in
accordance with Art. II.14 of the General Conditions;
2. In general, applicants and partners of applicants must be Contracting Authorities
according to Directives 2004/18/EC and 2004/17/EC, Contracting Authorities shall be the State, regional or local authorities, bodies governed by public law, associations formed by
one or several of such authorities or bodies governed by public law;
3. Multiple procurements can be implemented in a single consortium in the life-time
of the action. The total co-financing does not exceed EUR 500,000;
4. The total amount of the EU contribution for the purchase(s) does not exceed one third
(1/3) of the total EU contribution for the action;
5. The call for tender(s) for the actual purchase(s) of innovative solution(s) has/have
to be done following an EU wide publication, at least in English, and all offers are
evaluated according to the same objective criteria regardless of the geographic location of
company head offices, company size or governance structure, which ensure compliance
with the principles of transparency, non-discrimination and equal treatment and which
guarantee that tenders are assessed in conditions of effective competition;
6. The call for tender(s) for the actual purchase(s) of innovative solution(s) has/have
to use best value for money (and not just lowest price) criteria for evaluating offers.

22. 1/ Being able to evaluate the innovativeness of a solution procured
Current activities
Our challenges
1/ Being able to evaluate the innovativeness of a solution procured
2/ Demonstrating that financially supporting public procurement of innovation at European level could work
3/ Being successful in puling the demand of innovation at European level (Internal Market)

23. Innovation procurement Revision of 2004 Directives novelties & HORIZON 2020 Where are we going?

24. Innovation Procurement & Horizon 2020
Awareness Raising: events, PCP newsletter etc
Political agenda’s
EU level: Digital Agenda for Europe & Innovation Union targets on PCP & PPI
Council Conclusions of February 2011 and March 2012
MS agenda’s: half of EU MS are/start engaging in pilots or are defining their PCP / PPI policy strategy
Ongoing pilots EU support to procurement actions
Creating networks of public procurers
Co-financing PCP & PPI procurements
Mainstreaming EU support in Horizon 2020
Draft Commission Horizon 2020 proposal includes financial support for cross-border PCP & PPI actions
Possibility for EU to be involved itself also

25. Innovation Procurement & Horizon 2020
Future developments
Innovation Procurement & Horizon 2020
Horizon 2020 should support both Public Procurement of innovation & Pre-Commercial Procurement, preparation costs and procurement of innovation being done (+measurement, trainings, evaluation…)
Links to be established with the 3 stages (via grants reserved to SMEs) innovative SME support scheme

26. Future developments
PPI Feasibility Study within Horizon 2020: Full-Fledge EU Support Scheme
Proposal from feasibility study on future EU support to public procurement of innovative solutions

27. From needs assessment to innovation procurement – the demand
Future developments
Support from specialized organizations/ clusters: e.g. platforms of cities/ hospitals/ procurers …
From needs assessment to innovation procurement – the demand
Pre-commercial procurement 2.
NEED in R&D development
Procurers needs
assessment + market consultation/ technology assessment =
No solution available
Support from specialized organizations/ clusters: e.g. platforms of cities/ hospitals/ procurers …
Support from Chambers of Commerce, EEN, Innovation agencies… 1.
NO Need in R&D
Public procurement of innovation:
Forward commitment procurement
Competitive dialogue
Design contest
Catalytic procurement
(…) 3.
Support from Chambers of Commerce, EEN, Innovation agencies; European Technology Platforms…

28. Some of the future public events
Future developments
Some of the future public events
Various kick-off meetings (Strand 1)
5 July: Innovation procurement and SME involvment – Paris
12 September 2012: Nordic Innovation Procurement conference - Helsinki
19-21 September: Eco-Procura conference – Malmö
3-4 November 2012: Inno-demanda/ Inno-procura conference – Madrid
December 2012-January 2013: Innovation procurement and launching of 2013 call for proposals 3.0 Networks - Stuttgart

29. THANK YOU FOR YOUR ATTENTION
Contact:
Public Procurement & Innovation:
Pre-Commercial Procurement:
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