Commission launches debate on public procurement for R&D

Pre-commercial procurement in the research and development (R&D) domain is being underutilised, according to the European Commission, a new communication published on 14 December seeks to
launch a debate on how to encourage more public spending on R&D and the development of technology.

At the pre-commercial stage, when a product or service is not quite ready for the market, investment is key to research breakthroughs. But the investment can be at risk of non-return.

The Commission plans to encourage the procurement of public R&D spending during this phase in order to boost innovation in Europe. High technology areas such as information and
communication technologies (ICT), healthcare and medicine are the focus of the proposal.

A major hurdle is that public spending cycles tend to operate on a significantly shorter time scale than technological innovation cycles.

‘A clever use of the power of public procurement could be a great force for developing new, innovative solutions to existing challenges facing the public sector,’ said EU Science and Research
Commissioner Janez Potocnik.

‘Europe’s public sector has massive buying power, but until now it has not found a clear way to strongly link mid- to long-term public purchasing needs with research and development programmes.
This could become a lost opportunity for Europe if we do not act quickly,’ added Information Society and Media Commissioner Viviane Reding. The EU’s use of public spending must be more
‘proactive and pro-innovative’, she said.

Europe is way behind its major competitors. In the US, the public sector spends USD 50 billion (?34.85 billion) every year on R&D procurement, which is 20 times higher than spending in the
EU. This can be equated to half the research investment gap between the US and the EU.

The difference in R&D procurement expenditure is predominantly due to disparities in the defence and space budgets. However expenditure in areas such as health, energy, education, transport
and the environment is still four times higher than in the EU.

This low spending in Europe is in spite of concrete examples of innovative solutions that have emerged from R&D procurements. These include Internet Protocol technology, the global
positioning system, high performance computing and key innovations in semiconductor technology.

The communication explains that pre-commercial procurement differs from and complements other innovation instruments, such as grants, tax incentives, access to finance and Joint Technology

The debate that follows this communication should focus at first on mid- to long-term public needs that require the development of new technology solutions. ‘The relevant public authorities and
the Commission could then evaluate the potential role of pre-commercial procurement strategies in meeting the relevant policy objectives,’ the Commission states.

On the basis of the debate, the Commission will then consider proposing a series of actions during the second half of 2008. The proposal would address pre-commercial procurement in areas of
policy priority. The Commission may also support networking by theme (energy, environment, health, security) on pre-commercial procurement.

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