A Nordic model for innovation procurement?

The Finnish Competence Centre for Sustainable and Innovative Public Procurement KEINO had the pleasure to invite colleagues from Swedish and Norwegian support agencies and competence centers for innovative procurement to Finland in November 2018 to discuss topical issues and collaboration opportunities. The meeting followed Nordic experts’ discussions started in Stockholm in June 2018. This time, the main topic of the meeting was measurement of innovation procurement, which generated innovative ideas amongst the participants, one of them being a Nordic model for innovative procurement.  

Developing a ’Nordic Model’?

Concluding from the consensus that prevailed when discussing both the objectives and challenges of public procurement, borders between the countries seemed to exist only geographically.

“The similarities in perspective were anticipated but not to the extent we discovered,” revealed Nina Widmark, Managing Director from Sweden’s Innovation Agency Vinnova.All the attendants sitting together

“We all have the same challenges, for example how to reach the top management and how to use innovative procurement as a strategic tool,” said Johanna Enberg, Strategist from the National Agency for Public Procurement in Sweden (Upphandlingsmyndigheten).

All three countries face challenges especially with promoting and measuring innovative public procurement, but this was not seen from a negative perspective.

“Colleagues in Sweden and Norway are facing the same challenges as we do regarding the definition of innovative procurement and measurement of innovation/innovative procurement. Outcomes and longer lasting impacts of (innovative) procurement are not known and would require more attention. This creates a good opportunity for a presentation of a joint Nordic view, a ‘Nordic Model’, and its development for the EU Commission,” remarks Juha Oksanen, Senior Scientist from VTT, the Technical Research Centre of Finland.

“We all share the view that the objective of innovative procurement is to achieve an impact either on organizational or societal level. Innovations are a means to reach the desired impact,” continues Isa-Maria Bergman, Director of Circular Economy in Sustainable Public Procurement from Motiva, a governmental agency for sustainable development in Finland. “We should definitely consider stronger involvement in influencing the EU policy on innovative procurement by co-operating with our neighbors and possibly with the other Nordic countries as well.”

All the participants agreed that there are vast possibilities in co-operation not only in terms of exchanging ideas, but also on a more operational level.

“We could co-operate in developing measurement indicators for innovative and sustainable public procurement (SPP), share best practices on SPP and innovative public procurement, and share experiences on buyers’ group activities. As we operate in a common market, we could also consider common (Nordic) buyer group activities,” notes Katriina Alhola, Senior Scientist from the Finnish Environment Institute SYKE.

“We could benefit more from promoting a Nordic market in public procurement,” states Mrs. Bergman.

Winds of change in public procurement

All countries saw sustainable and innovative procurement as a means to achieve several impact goals set for the public sector operations. Despite the positive advancements in public procurement in the countries, the procurement experts identified some issues they would address in each country.

“In Norway, more work needs to be focused on how the procurement function is linked to contracting authorities‘ (CAs) general processes and on finding new ways of linking them. Following this, focus should be on the new required competencies and the role of the procurement function,” notes Kjersti Berg, Senior Adviser from the Agency for Public Management and eGovernment (Difi) in Norway.Discussion between Norway's and Sweden's representatives

“There are many possibilities for progress in Sweden, but these issues still need more study and analysis. For example, looking into the idea of expanding the financial support available to buyers’ networks and groups, e.g. by an open call/program,” considers Mrs. Widmark.

“If I could change something in Finland relating to public procurement, it would be the culture and orientation to innovative procurement risk sharing in public organizations. In addition, they should have a strategy that supports sustainable and innovative public procurement, and enough resources to implement the strategy,” Mrs. Alhola says.

“Setting a clear impact goal for every procurement and measuring the impact should be a standard. Not only in Finland but in all the countries,” states Anna Tonteri, Leading Specialist in Impact Investing from the Finnish Innovation Fund Sitra

However, all three countries have some ongoing activities that may result in desirable changes. These include encouraging contracting authorities to adopt a strategic perspective to procurement, collaboration with different actors around public needs (e.g. innovation competitions of different kinds, needs databases in Sweden and improving methods for spreading and implementing new solutions from innovation projects, e.g. through facilitating their procurement).

Lessons learned

The participants were invited to give an update on progress made in each country and to share their views and experience on measuring the innovation component in public procurement. The meeting provided an opportunity to share best practices on measurement concepts and methods as well as possibilities to streamline measurement activities between the Nordic countries, which also allowed comparison of progress between the countries. All countries also presented one inspiring example of an innovative public procurement case. Each country seemed to get encouraging ideas from the examples of others.a slide representing public procurement in Norway

“It is always useful to share experiences with other countries to get an outside view,” says Mrs. Berg.

“It would be interesting to analyze whether Sweden could launch a program for financing innovation partnerships, the same way as Innovasjon Norge has done,” says Mrs. Widmark. “Both our neighbours provided concrete examples of questions that need to be asked to track innovative procurement, which was very helpful I feel that we now have a good foundation for putting together a more comprehensive Swedish model.”

“It is especially interesting to follow the development in Sweden: instead of A slide from Sweden's presentationprocurement procedures, the Swedish actors involved are increasingly emphasizing and focusing on end results and impact logic of procurement,” Mr. Oksanen observes. “I was also surprised to hear that DIFI in Norway and Upphandlingsmyndigheten in Sweden have already several years of experience from the implementation of procurement focused surveys. It’s a great chance to jointly refine methodology and approaches in the future.”

“There’s no right way of doing things, but many great ways. It is essential to share experiences and learnings, set the goal and choose the most suitable solution to the challenge,” Ms. Tonteri summarises.

Next stepsA slide from Finland's presentation

The possibilities of cooperation are inspiring and extensive, as Mrs. Widmark states, but the prevailing fragmentation and lack of resources for arranging cooperation challenges actors both nationally and internationally. 

“It is surprising how fragmented our systems are even in small countries such as our own, the Nordic countries” ponders Ms. Tonteri. “Since we all have a large public sector, public procurement really makes a difference in developing our societies. There’s thus little point in doing things by yourself.”

The participants all agreed to continue Nordic collaboration and scheduled the next meeting to take place in April 2019 with measurement of innovative procurement issues still on the agenda. In addition, the focus will be on how to build networks and increase collaboration on the regional level to engage a larger variety of public procurers, many of which are municipalities, regional government agencies or municipality-owned utilities.

“It will be exciting to explore the opportunity of building on regional strengths in terms of local knowledge base and industry profile. If one region is particularly strong on a certain sector, for instance maritime industry or health technology, how can public procurement create demand for innovative products and services in this domain to boost economic growth and job creation? We already know there are examples to be built on”, concludes Ville Valovirta, Senior Scientist from VTT Technical Research Centre of Finland.

KEINO is a network-based consortium, whose founding members responsible for the operation and co-development are Motiva Ltd, the Association of Finnish Local and Regional Authorities, VTT Technical Research Centre of Finland Ltd, The Finnish Funding Agency for Innovation – Business Finland, the Finnish Environment Institute SYKE, Hansel Ltd, KL-Kuntahankinnat Ltd and the Finnish Innovation Fund Sitra.

The Centre’s main objectives for 2018–2021 are that

•the number of innovative and sustainable procurements in Finland increases,

•public procurement is recognized and actively used as a management tool,

•contracting entities openly disseminate information on their own experiences and learn from one another.

The value of the Finnish public sector’s procurements is approximately EUR 35 billion annually, or on average 16% of the country’s GDP.