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Public procurement is a major economic force in the UK, accounting for £385 billion annually. While procurement is widely recognized for its ability to stimulate innovation, create market opportunities, and drive social value, its direct impact on firm productivity remains underexplored. This research brief examines how government contracts influence business performance, analysing trends in procurement income, supplier composition, and the effect of different government buyers—central government, local government, and the NHS—on firm productivity. Read More
Public procurement is a powerful tool for economic growth, innovation, and social impact. Local governments play a crucial role in shaping regional economies by using procurement strategies to stimulate innovation, create jobs, and deliver social value.
This research brief explores how public procurement can be used strategically to address regional needs, particularly in a time of constrained public resources. The West Midlands serves as a prime example of how procurement policies can drive place-based transformation. The West Midlands Innovation Programme (WMIP) supported Digital Innovation in Public Services (DIPS) project, which presents how a region can create values through procuring innovation. The Innovation procurement partnership model demonstrates how local authorities can foster economic and social values through strategic partnerships. By integrating procurement with local industrial strategies, the region enhances SME participation, promotes green innovation, and delivers measurable social value.
Key Highlights:
• Public procurement acts as a catalyst by connecting public services with cutting-edge technologies and forward-thinking businesses.
• Innovative procurement models are enabling small and medium-sized enterprises (SMEs) to participate in public contracts, fostering economic resilience and job creation.
• The integration of sustainability goals into procurement policies ensures that public spending contributes to the region’s decarbonisation and green growth objectives.
By adopting a place-based approach, local governments can tailor procurement policies to address specific regional economic and social challenges. The findings from the West Midlands serve as a valuable guide for policymakers, businesses, and researchers seeking to maximise the impact of public procurement on regional development. Read More
This research brief discusses the implication of recent policy developments, including the National Procurement Policy Statement (NPPS) and the Procurement Act 2023, which highlight the potential for procurement to drive local economic growth and innovation. It argues that, in order to harness the full potential of public procurement for regional development, a shift towards more strategic, innovation-friendly, and regionally sensitive procurement practices will be needed. Key recommendations of this brief include: Read More
Understanding trends in public sector spending, supplier engagement, and funding allocation effectiveness is crucial in building trust in the government. A comprehensive understanding of procurement contracts enhances accountability and provides actionable intelligence for policymakers and stakeholders, enabling them to assess the effectiveness of procurement strategies and monitor progress toward sustainability goals. Read More
Knowledge-Intensive Business Services (KIBS) are the cornerstone of innovation in a knowledge-based economy. Acting as facilitators, carriers, and sources of innovation, KIBS firms play a pivotal role in enhancing both public and private sector capabilities. These services encompass a wide range of expertise, from accountancy and management consultancy (Professional KIBS or P-KIBS) to IT and R&D services (Technology-based KIBS or T-KIBS). Read More
The UK is at a critical point in its transition to a net-zero future, with one of the most urgent challenges being the retrofitting of social housing to transform them into energy-efficient, low-carbon homes to meet the 2050 net-zero targets. While the benefits of this transition are apparent (lower emissions, higher living standards, and cheaper energy prices), attaining it will necessitate overcoming numerous barriers. Public procurement is at the heart of this challenge: the mechanism through which funding is secured for projects, quality is maintained, and key stakeholders are aligned. Read More
Public procurement represents a pivotal mechanism for fostering innovation, constituting nearly 15% of GDP in OECD countries. In the UK, this accounts for a significant portion of public expenditure, with SMEs playing a vital yet underutilised role. This research publication investigates how public procurement influences SME innovation, with a particular focus on patenting activity from 2016 to 2019. Read More
Public procurement holds significant potential to drive innovation across industries. Despite its importance, the role of public procurement in fostering innovation is underrepresented in the UK Innovation Survey (UKIS). Enhancing this tool to capture procurement's impact can yield vital insights for achieving goals such as sustainability, healthcare advancements, and economic resilience. Read More
The city of Birmingham is using public procurement to address its socioeconomic challenges and make its local economy more equitable. Read More
Conrad Parke, from the Centre for Local Economic Strategies (CLES), examines both theoretical and applied aspects of Practising Innovation in Public Sector Procurement in two research briefs. Read More