Innovation, government procurement and the National Bioeconomy Blueprint

I’m just catching up on the Obama Administration’s National Bioeconomy Blueprint released in April. The document defines and discusses the importance of the “bioeconomy” which encompasses health, energy, agriculture and environment. It then outlines of 5 part policy strategy:
1. Support R&D investments that will provide the foundation for the future U.S. bioeconomy.
2. Facilitate the transition of bioinventions from research lab to market, including an increased focus on translational and regulatory sciences.
3. Develop and reform regulations to reduce barriers, increase the speed and predictability of regulatory processes, and reduce costs while protecting human and environmental health.
4. Update training programs and align academic institution incentives with student training for national workforce needs.
5. Identify and support opportunities for the development of public-private partnerships and precompetitive collaborations–where competitors pool resources, knowledge, and expertise to learn from successes and failures.
Most of these are straightforward (and needed) technology policy initiatives. One recommendation, however, jumped out at me. Under the topic of point #2 (“research to market”) is the following discussion of government procurement:

Driving Innovation with the Procurement Power of the Federal Government
Advancing Biofuels for Military and Commercial Transportation: As stated in its Blueprint for a Secure Energy Future, the Administration recognizes the need for the Federal government to lead by example to help move the Nation toward a clean energy economy, given the government’s status as the largest energy consumer in the U.S. economy. In August 2011, the Secretaries of Agriculture, Energy, and the Navy announced the creation of a cooperative effort to develop drop-in advanced biofuels. Drop-in biofuels are direct replacements to existing gasoline, diesel, and jet fuels that do not require changes to existing fuel distribution networks or engines. This collaboration by the three Departments was developed in response to the Blueprint for a Secure Energy Future, and promises to advance U.S. efforts to reduce dependence on oil.
Driving Innovation and Creating Jobs in Rural America through Biobased and Sustainable Product Procurement: As part of a commitment to leading the way in procurement of biobased products to create jobs and open new markets in rural America, the President signed the Presidential Memorandum on Driving Innovation and Creating Jobs in Rural America through Biobased and Sustainable Product Procurement. Biobased product materials are typically grown and manufactured in rural areas. Their increased procurement will lead to increased jobs in rural areas, benefits to the environment, and overall use of fewer petroleum-based products. The Presidential Memorandum provides guidance to increase and better track biobased procurement as well as expand the list of designated biobased products available to the Federal government.

Bringing the topic of government procurement directly into the discussion on innovation policy is welcome step forward. I has long argued for a more pro-active role for procurement as an innovation policy (see earlier posting). As I noted before, government as a demanding customer can create the “thin opening wedge” — new products and services that have a specialized use. Once that specialized use is established, the product or service can be refined and adopted to a broader customer base. The demanding customer in fact becomes a co-creator.
There have been some examples of the Federal government, especially the Defense Department, using procurement to drive innovation. For example, DARPA is using the Experimental Crowd-derived Combat-support Vehicle (XC2V) Design Challenge as a means to foster innovation (see earlier posting). There are have also been some successes in government procurement in IT fostering innovative software solutions — although this has also provoked some skepticism.
But in general, the procurement tool has been left out of the innovation toolbox. The discussion of the role of government procurement in bioeconomy innovation may help spur a broader discussion — and a better development of this important policy tool.

3 thoughts on “Innovation, government procurement and the National Bioeconomy Blueprint”

  1. New National Academy study on innovation

    The Board on Science, Technology, and Economic Policy (of the National Academy of Sciences) has issued a new report on innovation: Rising to the Challenge: U.S. Innovation Policy for Global Economy. The result of a multiyear endeavor, the report brings…


  2. Demand-side innovation policies

    Readers of this blog will note that one of the re-occurring themes is the role of demand-side policies in promoting innovation. Such policy especially include regulations and government procurement. As I have noted before, government as a demanding cus…


  3. 2013 Economic Report of the President

    The 2013 Economic Report of the President came out last week covering many of the economic issues that the Obama Administration is likely to concentrate on. The Report had sections on macroeconomics, fiscal policy, tax reform, immigration (as part of…


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