Advisory report 9: Buying from start-ups

On 9 April 2019, the Flemish Minister of Economy and Innovation, Philippe Muyters, asked VARIO for advice on the concept note to the Flemish Government 'Buying from start-ups'. VARIO supports the 3 measures in the concept note 'Buying from start-ups' for the creation of a level playing field for young innovative companies, IF certain conditions are met that should increase the level of ambition and the impact of innovative procurement in Flanders.

Firstly, on the supply side, the focus should be broadened to an open ecosystem approach with a diversity of innovative actors. In addition to the innovative young companies (startups and scale-ups), sufficient attention should be paid to the inclusion of the more mature innovative companies. Innovations are generally more likely to blossom in innovation systems that stimulate effective symbiosis between younger and older companies. An open ecosystem approach also implies that initiatives to stimulate the number of innovative tenders do not lose sight of the importance of international openness. That is why the Flemish government should NOT prioritize the policy objective “creating an important home market for young Flemish ‘scalable’ companies". In the midst of the return of protectionism in global trade, Flanders must guard against such a reflex. The continuation of the possibilities Flemish 'scalable' companies have to compete in innovative tenders abroad, is more important than support for the Flemish home market. After all, as a small, open economy, Flanders is heavily dependent on exports for its prosperity. Next to that, foreign companies can enrich the local ecosystem, as well as expanding the range of innovative products and services available for government purchases.

Secondly, on the demand side, 30 to 40 billion euros is spent annually on public procurement in Flanders by the public actors at the various policy levels. To increase the impact of such purchases by augmenting the level of innovative procurement, an integrated governance approach is needed with sufficient critical mass, smart KPIs and innovation-stimulating legislation and culture. This approach should more systematically stimulate innovation as a procurement criterion for a wider range of policy areas and public actors. The project 'Buying from start-ups' should be integrated into this. VARIO puts Finland forward as a best practice with regards to the implementation of an integrated governance model. It is currently the best scoring European country in innovative procurement.