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The use of public demand to spur innovation has recently seen a very significant increase in political support. Such a policy promises improvement of public services on all state levels, combined with a contribution to innovation dynamics. It has become clear that strong efforts are needed to mobilise procurement at all state levels for innovative markets. These efforts need to be based on a better understanding of how public procurement actually can and should work–in a very practical sense–to contribute to more innovative activity in industry and to the growth or even creation of markets for innovative products and services. This is shown by the literature review.

In innovation theory, user-producer interaction and interactive learning are centrally important aspects of the innovation process. In innovative public procurement, knowledge about procurers’ needs must be transferred to potential suppliers, and suppliers’ knowledge of possible technological solutions must be transferred back to procurers. Regular public procurement of standardised products such as office materials does not typically require this kind of interaction, as the characteristics of these products are well known and the corresponding needs are self-evident. From this perspective, public procurement of innovations has heavier requirements for interaction between procurers and potential suppliers than does ‘regular’public procurement of standard products.