University of Twente Student Theses
How public procurement can foster innovation through effective tender formulation
Hof, A.W. (2024) How public procurement can foster innovation through effective tender formulation.
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| Abstract: | Public procurement plays a crucial role in the acquisition of goods and services by governments and public entities. In 2020, global public procurement accounted for between 13% and 20% of GDP, with an estimated value of $9.5 trillion. This study investigates how the specification of PP tenders influences the selection of companies and their ability to innovate. A qualitative approach, involving interviews with procurement officials and suppliers in the Netherlands, was employed to gather insights. The findings reveal that to foster innovation through public procurement the application of a functional approach to tender formulation is paramount. By utilizing a functional approach market parties are invited to utilize their expertise and to apply their innovations. Furthermore, the inclusion of innovation as a reward criterion aids innovation. A lack of knowledge of market developments was found to be a barrier to the effective formulation of specifications, thereby limiting the innovation potential of the responding firms. Factors such as time constraints, risks and politics hinder innovation fostering specification formulation. The findings reveal that the complexity of tenders and time constraints are significant barriers to innovation, especially for SMEs. Furthermore, a lack of knowledge of public procurement procedures at SMEs was found to be a barrier to innovation. The study highlights the need for early market involvement and collaboration between public and private sectors to enhance the innovation potential of PP. These insights can aid policymakers in formulating tenders that meet public needs and drive technological advancements. |
| Item Type: | Essay (Bachelor) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | International Business Administration BSc (50952) |
| Link to this item: | https://purl.utwente.nl/essays/100317 |
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