VTT's Matti Pihlajamaa's presentation dove into the depths of transformative innovation policy and the potential of innovative public procurement. Find out more at the ORSI project website: https://www.ecowelfare.fi/en/

1. D.Sc. (Tech) Matti Pihlajamaa, Senior Scientist
VTT Technical Research Centre of Finland
Innovative Public Procurement and Grand Challenges
What Is an Eco-Welfare State seminar 21.1.2020

2. The evolution of science, technology and innovation policy
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Figure: Diercks et al., 2019
The three framings: Schot & Steinmüller, 2018

3. The evolution of science, technology and innovation policy
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Figure: Diercks et al., 2019
The three framings: Schot & Steinmüller, 2018
”Innovation for growth”
- WW2→
- Boosting basic research
and private R&D for
economic growth

4. The evolution of science, technology and innovation policy
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Figure: Diercks et al., 2019
The three framings: Schot & Steinmüller, 2018
”National Systems of
Innovation”
• 1980s→
• Creating institutions,
policies and networks that
ensure national
competitiveness.
”Innovation for growth”
- WW2→
- Boosting basic research
and private R&D for
economic growth

5. The evolution of science, technology and innovation policy
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”National Systems of
Innovation”
• 1980s→
• Creating institutions,
policies and networks that
ensure national
competitiveness.
”Innovation for growth”
- WW2→
- Boosting basic research
and private R&D for
economic growth
”Transformative
innovation policy”
• 2010s→
• Promoting innovation
for solving grand
challenges
Figure: Diercks et al., 2019
The three framings: Schot & Steinmüller, 2018

6. Why do we need transformative innovation policy?
Problems with promoting innovation for
innovation’s sake:
– Economic competitiveness is
not sufficent to solve many
environmental and social
problems
– Innovations produce negative
effects: emissions, inequality,
oppression, excessive use of
natural resources…
– We are unable to address
these negative externalities by
regulation
– Significant share of global
human capital goes to
generating unnecessary or
harmful innovations
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7. Creating demand for an eco-welfare state
• Need for a ’normative turn’ in
innovation policy
• Until recently, the policy
measures to tackle ’grand
challenges’ have mostly
focused on investing in
research (e.g. Lund
Declaration 2015;
Horizon2020).
• New emphasis on demand-
side measures: public
procurement as an engine for
promoting and guiding
innovation.
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8. The potential of innovative public procurement
In Finland, public authorities
spend ca. 35 billion € annually
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9. Innovative public procurement
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Type Aim In practice
Pre-commercial procurement:
buying solutions that don’t yet exist
Increase R&D towards solving
societal problems
Buying concepts or prototypes for
solving an identified problem
Procurement of new innovative
solutions: government as a lead
user
Boosting further innovation,
generating customer references
Buying novel solutions with few
use cases
‘Catalytic’ procurement of
innovation: catalysing the
development of innovations for
broader public use
Market creation for innovative
solutions
Aggregating the demand of
multiple procurers: KEINO buyer
groups in Finland
Innovation-friendly
procurement: practices for
ensuring that innovative solutions
are not excluded
Wider diffusion of innovations Market dialogue, quality criteria,
functional or outcome-based
specifications
Modified from Uyarra et al., 2020

10. Challenges for research and practice
• From grand challenges to concrete actions
• Improving procurement skills and capabilities
• Scaling local successes
• From innovative public procurement to effective policy mixes
• Challenges from directionality:
– Co-creating desirable futures
– Vulnerable to lobbying and political opportunism
– Avoiding ‘picking the winners’
– Taking care of those who the innovations affect in negative ways
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11. Thank you
Matti Pihlajamaa
D.Sc. (Tech), Senior Scientist
Ethics and responsibility of innovations
VTT Technical Research Centre of Finland
Vuorimiehentie 3, Espoo, P.O. Box 1000, 02044 VTT, Finland
Phone: +358 40 673 1050
Email: matti.pihlajamaa@vtt.fi
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