Pre-commercial procurement can be used when there are no near-to-the-market solutions yet and new research and development is needed. It challenges the industry from the demand side to develop innovative solutions for public sector needs and it provides a first customer reference that enables companies to create competitive advantage on the market.
Pre-commercial Procurement (PCP), as an innovation procurement tool, is still a relatively recent, and experimental instrument, with huge potential for the development of cities, by helping them to prepare and overcome societal challenges, such as climate change, the ageing of population, energy security, and turn Helsinki into the most functional city in the world.
PCP enables public procurers to compare alternative potential solution concepts and filter out the best possible solutions that the market can deliver to address the public need.
The possibility of assessing the pros and cons of competing solutions, via the PCP process, enables to de-risk the most promising innovations step-by-step via solution design, prototyping, and pilot testing inside the cities.
By developing a forward-looking innovation procurement strategy that uses PCP, cities can drive innovation from the demand side, by steering the development of new solutions directly towards its needs. This enables the public sector to modernize public services faster while creating opportunities for companies in Europe to gain leadership in new markets.
In conclusion, PCP is a very attractive tool capable of empowering cities to drive innovation towards concrete challenges and needs not currently answered. For the city of Helsinki, its innovation unit Forum Virium Helsinki will continue to explore PCP as an instrument for:
- Developing breakthrough innovative solutions for answer societal challenges and help turn Helsinki into the most functional city in the world (e.g. better wellbeing and healthcare, clean & efficient energy, better urban mobility and digital public sevices);
- Facilitating the access of new innovative players (e.g. local startups, SMEs) to the public procurement market, in Europe and beyond;
- Allowing the cities to share the risks for developing truly innovative and disruptive solutions by combining its resources, and with the cofund of the EC;
- Increasing chance of real breakthroughs with several competing suppliers in parallel to compare alternative solutions;
- Sharing the risks and benefits of designing, prototyping, and testing new products between procurers and suppliers
- Immediate wider market for companies through a larger pool of public procurers
Pre-commercial procurement in Helsinki – a great tool for city innovation and companies
Forum Virium Helsinki, as the innovation unit of the City of Helsinki group, has been one of the key actors in the testing of innovation procurement tools as means to drive innovation Helsinki and in Finland, overall.
Forum Virium was a partner in SILVER PCP, the first EU level Pre-commercial Procurement (PCP), funded by the 7th EU Framework Programme. SILVER searched for new technologies to assist elderly people in their everyday lives, and was completed in August 2016. It resulted in a successful commercialisation of LEA, a robot that assists elderly with mobility problems at their homes.
Since then, Forum Virium has developed two other PCPs targeting different areas of public interest, such as, the democratizing the Internet of Things as enabler for new services generation by all, as in SELECT for Cities, turning Cities into Internet of Everything labs, and FABULOS, developing the future of urban mobility, with the creation of urban transportation systems for the management of fleets of autonomous buses for cities.
Both projects are EU level actions, coordinated by Forum Virium Helsinki, involving multiple cities across Europe, co-funded by Horizon 2020, and are currently under different stages of execution.
Forum Virium Helsinki is the innovation unit of the City of Helsinki, which aims to build Helsinki into the most functional smart city in the world in collaboration with companies, the scientific community and residents. Follow us on Twitter and subscribe to our newsletter!