The learning mechanisms through public procurement for innovation: The case of government‐funded basic research organizations

Paolo Castelnovo and Martina Dal Molin

Annals of Public and Cooperative Economics, 2021, vol. 92, issue 3, 411-446

Abstract: We investigate how the procurement activity of government‐funded science organizations support the performance of the firms involved in their supply chain. Specifically, the aim of the paper is to identify the mechanisms and disentangle the channels driving this process. Our testing ground is the Italian Institute for Nuclear Physics (INFN). We frame our study as a mixed‐methods research project: three distinct but complementary methodologies are employed, which combine quantitative and qualitative evidence. Firstly, econometric and Bayesian Network analyses are performed, using the information collected through an online survey to suppliers as well as balance‐sheet data extracted from online databases. Then, five case studies are investigated in depth, carrying out direct interviews with company staff. Our findings suggest that four types of benefits stem from suppliers’ cooperation with INFN: learning, innovation, market penetration, and networking. These gains represent “intermediate outputs” which in turn impact on suppliers’ socio‐economic performance. We provide evidence that suppliers involved in innovative procurement usually experience the greatest benefits. This is mainly explained by the new technical competencies acquired, which are exploited to develop new products that support company business development and sales. In contrast, reputational gains, leading to the acquisition of new clients, are experienced also by companies involved in regular procurement.

Date: 2021
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