NESTA urges innovation through public procurement

19 February 2007
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19 February 2007 | Paul Snell

The National Endowment for Science, Technology and the Arts (NESTA) has joined the CBI and the Conservative Party in calling for public spending to be used to stimulate innovation.

The organisation, which aims to encourage innovation through investment, claims policy makers are neglecting the role that "demand and markets play in pulling innovation through". Its report Demanding Innovation, published last week, said it is likely that EU procurement directives do not go far enough for buyers to drive innovation. It also urged that rewards and penalties for innovative buyers be re-appraised, as punishment for procurement failure in the public sector is far greater than the reward for success.

One suggestion to remedy this was the creation of a "procurement innovation index", a collection of statistics that would record the extent of innovative procurement. High profile awards should also be offered for innovative procurement at individual and corporate level.

Yet the report disagreed with the Tory suggestion (News, 24 August) that the UK should follow the US by creating an innovation agency. "The pivotal issue, however, is one of budget," the report said. "DARPA's [The US defence innovation agency] annual $3 billion (£1.5 billion) is enough to move the market - present UK spending (£370 million over three years) has no chance of achieving such effects."

The report also called for better training for buyers to improve skills in innovation, which would benefit potential suppliers, including SMEs, in the process.


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