What’s in the Mix: Opportunities + challenges for municipal innovation procurement

As governments look to purchase innovations as well as purchase innovatively, what are the challenges and opportunities? We explored innovation procurement and the potential for more experimentation.
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What’s in the Mix: Opportunities + challenges for municipal innovation procurement
Annalise Huynh
Policy Analyst + Designer
Heather Russek
Director of Policy Innovation
Michelle Park
Project Manager

About this Report

Public procurement has always been the way that governments provide essential services to people, by obtaining the goods and services that allow government to function: from computers and software to fire trucks and road salt. Recently, governments are increasingly interested in making procurement faster, more flexible, more inclusive, and easier to understand.They are also interested in enabling a greater diversity of firms to participate in the development of ideas that could help governments solve pressing issues.

As innovation procurement practices emerge and continue to be tested by practitioners inside and outside of government, we aim to use this research to improve the understanding of innovation procurement in Canada and how it has been put into practice. As federal, provincial, and municipal governments work to adopt new approaches, this research highlights what space there is for experimentation in procurement processes. What are the opportunities in building innovation procurement practices and what are the challenges?

This report will support the Municipal Innovation Exchange (the MIX) and its work on innovation procurement. The MIX is an emerging virtual centre of excellence developed by the Cities of Guelph, London and Barrie, as well as MaRS Discovery District. The MIX is working to run innovation procurement challenges in each city, explore multi-city procurement challenges, conduct policy research, develop a peer-network of municipalities, and codify learnings into a best practice Municipal Innovation Procurement Framework. The MIX benefits from the support of various partners along the innovation pipeline including the Guelph Lab and Innovation Guelph. This report was commissioned by MaRS Discovery District to support the work of the MIX.

Read this report to help you:
  • Understand how governments and procurement experts are talking about innovation procurement across the globe; how it is being described in different sectors and how it is being applied in practice.
  • Glean insight into the opportunities and barriers faced by policymakers, academics, consultants, procurement experts, and companies that are working to make innovation procurement more effective.

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Key findings from the report:

  • The definition of innovation procurement is not always clear, nor is innovation procurement always desirable or applicable to procurement across all sectors and governments—or even across all departments. The adoption and implementation of innovation procurement is uneven and subject to interpretation.
  • Governments feel a constant pressure to innovate balanced with ensuring that all procurements are fair, transparent, and accountable. The culture of procurement is characterized by the necessity of stringent risk management often seen as preventing the testing of new ideas and partners. As such, there is a shared sense that government procurers should have some controlled space to experiment with procurement approaches and solutions, manage risk, and anticipate new challenges related to innovation.
  • Emerging models for innovation procurement have been challenging ideas of which companies can do what kinds of work for government. Procurers across all levels of government are interested in engaging more small-and-medium sized businesses as a potentially untapped set of problem-solvers.
  • While not all efforts will lead to a purchase, both procurers and suppliers are well-positioned to benefit from burgeoning relationships. This will help build mutual awareness and understanding of how public, private, and nonprofit organizations can collaborate, and grow the pool of future suppliers and potential partners.

Methodology

Our research includes a literature review focused primarily on academic literature, grey literature, and policy frameworks from the EU and Canada. Additionally, twenty-one expert interviews were conducted with a diversity of procurement-focused policymakers across all levels of government, as well as academics, consultants, companies providing digital platforms and consulting models for procurement, and one legal expert. Interviewees were from Canada, the US, and the EU. Interviews focused on barriers to and enablers of innovation procurement, including cultural and legal obstacles, approaches and tools being used, products and services being procured, and opportunities to help make innovation procurement happen more effectively.

An initial discussion paper was created from the expert interviews, summarizing our insights and findings to date. We also hosted a roundtable with each of the three MIX municipalities – Guelph, London and Barrie to discuss these insights further. All discussions to date have been synthesized into the insights and recommendations presented in this report.

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