Procurement of Innovation platform

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10 July 2019

Interview with Tiiu Treier, Area manager of Enterprise Estonia

What is the current situation of innovation procurement in Estonia?
The annual volume of public procurement in the public sector was around € 10 billion by 2018. Thus, public sector demand has a significant impact on the national economy. Therefore, public sector procurement must become an effective and sustainable tool for bringing new innovative products, services and processes to the market and for managing innovation and related awareness, valuation and motivation in the country as a whole, at the public, private and individual levels.
One of the obstacles to obtaining an innovative solution is certainly the weak knowledge of the applicable procedure and the weak involvement of the private sector in obtaining solutions. Support measure for innovation-enhancing procurement has therefore been launched.
Support for innovation-enhancing procurement has been implemented with the aim of raising public purchasers' awareness and demand for innovative solutions and creating demand in the private sector for innovative products or solutions. It will also increase cooperation between the public and private sectors, thereby increasing the competitiveness of companies on both the domestic and foreign markets and thereby contributing to the development and growth of the country's economy.
Between 2016 and today, a total of 16 applications for support for innovation procurement have been submitted, of which 9 have been assessed as worthy of support.

What projects have been supported so far?
Here is the list:Integration of the street lighting management and management system over the data exchange layer - Harku

  • Local Government Panoramic Market is a technical and substantive solution for the Red Tower of Pärnu - Pärnu Museum
  • Optimal road construction methodology - Road Administration
  • Development of transcription software - Police and Border Guard Board
  • A smart pedestrian crossing - Tartu City Government
  • Development and Deployment of Solar Electricity Road Roads - Tallinn Municipal Agency
  • Books on the Move - The National Library of Estonia
  • Creating a prototype of a technological solution for 3D data monitoring of underground facilities - Tallinn Municipal Agency
  • Health Care Support - Estonian Health Insurance Fund

Why is Enterprise Estonia interested in boosting innovation procurement in the country?
One goal for Enterprise Estonia (EAS) is to win new innovative companies, increase exports and increase the added value of companies. There are many areas where public sector has an important role to be reference to open up markets for innovative solutions of companies. Therefore, we just help to put together different sides of a coin - the public sector gets more efficient and transparent public service and the companies gets a new product or service or new market.

What will your competence centre offer to procurers?
We are looking for a partner who would help us implement awareness raising events and would help public authorities to procure innovative solutions through:

  • formulation of procurement needs, procurement planning
  • helping to conduct market research
  • selection of procurement strategy and type of procurement procedure
  • where appropriate, the provision of a research and development service (e.g. promotion of PCP), and
  • launching a procurement procedure

What services are you planning to offer to suppliers of innovative goods?
There are no specific services yet, but we have some thoughts:

  • Promotion events
  • Training, workshops, seminars
  • Advise
  • Online tools
  • PCP projects
  • Grants to conduct the innovative procurement

Why is it important for Enterprise Estonia to be part of the Procure2Innovate Network?
Procure2Innovate gives us a great opportunity to build our own innovation procurement competence centre using the best practice from more experienced European countries and get the contacts of the top of professionals of the area.

What do you think are the main obstacles for innovation procurement in Estonia and what steps can be taken to overcome them?
We started with innovation-enhancing procurement programme in 2015. After three years of work, we analysed the results (nine supported projects and no new projects came) and came to the conclusion that politically it was not clear who should be responsible for innovation. For example, supporting measures for innovation are under the authority of the Ministry of Economic Affairs and Communication but the Central supplier is under the authority of Ministry of Finance. We also asked for the feedback to the applicants, and the biggest problems they raised are:

  • public sector budgeting policy;
  • conservative procurement policy of a public authority;
  • defining the subject of the contract by the contracting authority in a way that does not leave room for alternatives;
  • too precise conditions in place of performance-based conditions;
  • lack of dialogue by the public contracting authority;
  • lack of know-how in the public organisation;
  • too high risk management in public organisation for procurement process, and
  • high level of co-financing of the innovation promotion programme.

We understood that we cannot change the first and last problem, but we need to create a stronger demand for new products and solutions for companies through the public sector reference and we need to promote pre-commercial procurement (PCP) and pilot projects, as they can test new solutiosn or models before they are put into use through procurement at the real production stage. So, we are planning to find a partner who helps us to implement our action plan 2019-2023 to raising awareness of innovation-enhancing procurement and, through public sector counselling, demand for the private market can be enhanced.