Latvian Association of Local and Regional Governments (LALRG) is one of the members of the working group in the Interreg Europe project - “iBuy - Fostering the role of public authorities as demanders of innovation through public procurement” set up by the Ministry of Economics.
As part of the project, on 24-25 April, Andra Feldmane, Adviser on entrepreneurship of the LALRG, in an interregional working group meeting presented the vision and subject of the LALRG “Regional development and challenges within Public Procurement of Innovation: financial perspective”.
The aim of this working group was to make practical recommendations on public procurement for innovation, both on the procurement process itself and on sharing experience on the use of financial instruments in the procurement of innovation and on identified risks.
In the EU and Latvia, the purchasing power of the public sector is about 14 % of GDP and constitutes a substantial part of the local economy. This, in turn, means that the public sector can stimulate the emergence of innovations and the stabilization, testing and practical implementation of innovations and their further development as an export product or service among global players. The willingness of this public sector to share the risk opens opportunities for Latvian SMEs (small and medium entrepreneurs) and new innovative companies, as the public sector acts as the main customer. Public buyers can give innovative companies the opportunity to test their new solutions in real-life. In addition, when becoming a customer and thus increasing their turnover, contracting authorities may encourage other public and private investors to invest in the activities of specific companies.
According to A. Feldmane, when it comes to the procurement of innovations, it is important to find the possibility to establish cooperation with the public sector with the private sector at the stage of the development of the idea and prototype: it allows to develop a special solution for a particular problem and to get the added value of public procurement of innovation.
Adviser on entrepreneurship of the LALRG