Bridging the Innovation Gap in EU Public Procurement?

Public procurement serves as a powerful instrument for innovation and sustainability, accounting for nearly 14% of the European Union’s GDP. Yet, despite its scale and transformative potential, procurement that truly drives innovation remains the exception rather than the norm.

Illustrative representation

Rigid frameworks, conservative mindsets, fragmented tools, and entrenched administrative systems frequently hinder the public sector’s ability to realise the strategic potential of procurement. This article examines the persistent barriers to innovation in public procurement, the gaps in current tools and funding mechanisms, and proposes practical strategies to bridge these divides through capacity-building, policy reform, and cross-sector collaboration.

1. Recurring Barriers Across the Ecosystem

Public procurement systems across Europe share structural, operational, and cultural limitations that stifle innovation. These issues span public and private sectors, regions, and supply chains.

Overemphasis on Price

A prevailing issue is the focus on short-term cost. Procurement decisions frequently prioritise the lowest bid over long-term value, sustainability, or innovation. This discourages suppliers from proposing forward-thinking or impactful solutions that may involve higher initial costs but offer greater value over time.

Lack of Capacity and Expertise

Procurement professionals often lack the necessary legal, technical, or sustainability-related expertise. Many are not sufficiently trained in market engagement or environmental and social criteria, which limits their ability to make progressive purchasing decisions.

Fragmentation and Siloed Efforts

Departments and sectors often work in isolation, leading to duplicated efforts and inconsistent practices. Private sector ESG networks and public procurement forums rarely intersect, which limits knowledge sharing and innovation uptake.

Inaccessible Supply Chains

Small and medium-sized enterprises (SMEs), social enterprises, and minority-led businesses face barriers accessing public contracts. Tendering processes can be overly complex and opaque, while procurement pipelines are often unclear or inaccessible.

2. Systemic Gaps in EU Tools, Funding, and Networks

The EU has developed numerous tools to support innovation in procurement, but several critical limitations persist.

Top-Down Design Limits Relevance

Many tools are developed centrally, without adequate input from local or regional actors. This top-down approach reduces their relevance and uptake, particularly among SMEs and non-traditional suppliers.

Fragmented and Complex Funding Landscape

Funding schemes are frequently burdensome and fragmented. SMEs and local stakeholders often find application processes overly technical or time-consuming, which discourages participation.

Limited Multilingual and Localized Support

Tools and guidance often lack linguistic and contextual localisation. Challenges faced in rural or less-developed areas are rarely addressed effectively, and generic support materials miss regional nuances.

Weak Feedback Loops

Successful pilot projects or good practices are not always scaled or institutionalised. Lessons learned are often lost, and systemic change is delayed due to a lack of mechanisms to capture and replicate innovation.

3. Capacity-Building, Matchmaking, and Knowledge Exchange

Addressing the innovation gap requires sustained investment in human capacity, networks, and collaborative infrastructure.

Procurement Officer Training

Comprehensive training programmes—covering sustainable procurement, innovation models, and supplier diversity—are vital. These can be delivered through e-learning, regional workshops, and on-the-job guidance.

Matchmaking Platforms

Targeted platforms can connect public buyers with responsible suppliers, particularly SMEs and social enterprises. These tools should enable pre-market dialogue and facilitate visibility through supplier registries and innovation showcases.

Knowledge Hubs and Communities of Practice

Multilingual knowledge-sharing hubs and practitioner networks (such as Buy Social Europe B2B and SPP Chapters) offer peer learning, toolkits, and real-life case studies. These must be sustained and expanded to promote consistent progress.

4. Structural and Policy-Level Solutions

To move beyond ad hoc successes, structural reform and policy change are needed at both national and EU levels.

Mandate Sustainability Criteria

Public procurement directives should include mandatory yet adaptable sustainability criteria. This ensures alignment with ESG goals while allowing flexibility for local needs.

Reform Tendering Frameworks

A rigid focus on lowest-price criteria must be replaced with frameworks that consider long-term value, social impact, and innovation outcomes. Value-based and outcomes-oriented procurement models should be prioritised.

Promote Interoperability and Shared Metrics

Procurement and ESG data must be standardised to enable benchmarking and improve accountability. Shared indicators can support strategic procurement planning across the public sector.

Leadership and Governance

High-level political and executive commitment is essential. Strong leadership signals the importance of responsible procurement and helps embed innovation in institutional strategies and processes.

5. Enablers for Cross-Sector Innovation

Responsibility for innovative procurement extends beyond the public sector. Engagement from industry, academia, and civil society is crucial.

Design Inclusive Tools and Funding

Tools and funding should be co-created with users, particularly SMEs and non-traditional suppliers. Accessibility, simplicity, and relevance to real procurement cycles are key.

Invest in Shared Platforms

Collaborative platforms for supplier development and procurement matchmaking increase efficiency, reduce duplication, and enhance innovation ecosystems.

Support Supplier Training and Development

Onboarding and training support helps suppliers, especially those unfamiliar with public procurement, to participate effectively. Capacity-building should be inclusive and continuous.

Recognize Responsible Procurement

Recognition schemes, tax incentives, and awards can encourage both buyers and suppliers to adopt sustainable and innovative practices, turning good intentions into action.

6. A Path Forward: Bridging the Gaps

Simplify and Streamline

Funding mechanisms and support tools should be simplified. Clear, localised guidance, translated resources, and tiered entry points will broaden participation.

Establish Long-Term Investment

Short-term, project-based funding often limits impact. Long-term, flexible investment should back procurement reform, supplier engagement, and digital infrastructure.

Enable Data and Transparency

Procurement processes must be more transparent. Interoperable systems and clear data standards will help track diversity, sustainability, and innovation across supply chains.

Co-Create Policies and Networks

Policy must reflect the experience of those it affects. SMEs, local authorities, social enterprises, and procurement practitioners should have a seat at the table when designing rules and tools.

Conclusion

The innovation gap in public procurement is not an unknown—it is a systems-level challenge with clearly defined causes and well-documented solutions. Addressing it requires strategic alignment, collaborative investment, and bold reform across sectors and levels of governance.

Europe has the resources, talent, and imperative to become a global leader in sustainable, inclusive, and innovative public procurement. The real question is not whether it is possible—but whether we are ready to act.

And you, what are your thoughts?

In your view, what are the priorities or the most effective levers to make public procurement a genuine driver of innovation and sustainability? Do you have any experiences, examples, or ideas to share on overcoming the challenges highlighted in this article?Please share your reflections and suggestions in the comments: your input is valuable to enrich the discussion and help advance the transformation of public procurement.

Fanny Ganti - Transformative Procurement Change® - Nice - France - May 2025