Pre‐commercial Procurement, Procurement of Innovative Solutions and Innovation Partnerships in the EU: Rationale and Strategy

Abstract: We consider alternative European public procurement mechanisms for acquiring R&D services and innovative solutions, focusing on Pre-commercial Procurement, Public Procurement of Innovative Solutions and Innovation Partnerships. For each of these mechanisms, we identify conceptually strengths and weaknesses. We highlight the role played by (i) economies of scope and externalities between R&D and largescale production; (ii) degree of specificity of the innovation; (iii) role of SMEs in the market and level of market competition; (iv) risk of market foreclosure and supplier lock-in. This article contributes to the literature on incentives in demand-side innovation policy by tapping into the contractual design features and by offering relevant implications for academics and policy makers.