101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

1/11

Demand driven innovationthrough public procurement

Viorel PecaEuropean Commission

DG CONNECT (Communication Networks)F2 unit (Innovation)

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

2/11

Policy debate that lead to EC activity on publicprocurement driving research & innovation

2006: Aho report recommended EC actions driving demand forinnovations through public procurement

2007: Lead Markets Initiative and PCP communication

2008-today: Council conclusions and EP resolutions asking EC tosupport public procurement of research and innovative solutions

2010: Digital Agenda for Europe, Innovation Union and RegionalEU2020 flagships calling also Member States for more PCP & PPI

DAE: PCP key to double annual public ICT R&D spending from 5,5 to 11 Bn Innovation Union: from 2011, MS dedicate 10Bn per year on PCP and PPI

Regional flagship: calls on regions to do PCP & PPI also via structural funds

2011: Revised industrial policy communication calling forinnovation procurement in support of European industrial policy

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

3/11

Health care

Climate Change

Energy Efficiency

Transport

Security

Public sector efficiency

Why? To get best value for money solutionsdeveloped for public sector challenges

Public sector is faced with important challenges.

Addressing these, often requires public sector transformations forwhich no commercially stable solutions exist yet. In many cases, solutions are near the market and would be provided if clear

requirements/sufficient demand expressed by the market (PPI)

In other cases, still R&D required to de-risk technology, still differentcompeting solution approaches to compare before committing to deploy (PCP)

Public procurement is 'the tool' that enables the buyers to steerindustrial R&I to its needs. However, public procurement driving

R&I from demand side is underutilised in EU.

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

4/11

Why? To shorten time to market & provide firstcustomer reference for innovations

Market Share %

Innovators2,5%

Early

Adopters13,5%

Early

Majority34%

25%

50%

75%

100%

Late

Majority34%

Laggards

16%

PCPH2020, SF

PPIH2020, SF

PPICEF, SF

Normally functioning procurement market (e.g. in US, Asia):

2,5% of innovator type customers (PCP)Who invest in R&D with suppliers ($50Bn/Y in US 2,5Bn/Y in EU)

16% of early adopters (PPI)

ICT public procurement market in Europe:0,5% of innovator customers (PCP)

5% of early adopters of

new tech in e-gov (PPI)CEF = Connecting Europe FacilitySF = Structural/Cohesion FundsH2020 = Horizon 2020

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

5/11

Supplier B

Supplier C

Supplier D

Phase 1

Solut ion designPhase 2

Prototype

development

Phase 3

Orig inal development

of l imi ted volume

of f i rst test products /

servicesSupplier A

Supplier B

Supplier C

Supplier D

Supplier B

Phase 0

Cur iosi ty

Driven

Research

App lied R&D / Pre-commercial Procurement (PCP)

Phase 4

Deployment of comm ercial

end-products

Diffusion of n ewly developed

products / serv ices

Suppl ier D

Publ ic Procurement of

Innovative Solut ion s (PPI)

PCP to steer the development of solutions towards concrete publicsector needs, whilst comparing/validating alternative solutionapproaches from various vendors

PPI to act as launching customer / early adopter / first buyer ofinnovative commercial end-solutions newly arriving on the market

Supplier(s)

A,B,C,D

and/or X

Also normal ly mult ip le sourcing

here to keep compet i t ion going

Why? To create growth and jobs 'in Europe'How? PCP-PPI combo

Because of split between PCP and PPI: PCP falls outside WTO rules (conditions possible ensuring job creation 'in Europe'), Regardless whether follow-up PPI is only for ltd PCP test series or for large volumes

requiring quantity production to recup R&D cost (normally not exempted from WTO)

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

6/11

EC support to PCP & PPI

Why EC support needed?

PCP /PPI in some EU countries but not spread across rest of Europe Defragmenting demand side for challenges of common European

interest (common requirements setting, de facto standard creation)

2009: First EU calls for proposals creating European networks ofpublic procurers on PPI (LMI CIP) and on PCP (ICT theme FP7)

2011-2013: EC support for PCP via FP7 and for PPI via CIP

DG CNECT and ENTR are piloting support to PCPs by procurers(FP7 grant: co-financing up to 75% of the price of procured R&D)

DG ENTR, ENV and CNECT are piloting support to PPIs done bypublic procurers (via CIP grant: co-financing up to 20% of the price

of the innovative solutions procured/deployed)

2014-2020: Horizon 2020 (+ possibilities in SF & CEF)

EC can co-finance PCPs/PPIs carried out by grant beneficiaries

EC or EU funding bodies (e.g. agencies) can carry out PCPs/PPIs on

their own behalf or jointly with Member States

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

7/11

Status of PCP implementationacross EuropeUpdate March 2013 status

More info about EU funded cross border PCP projects: http://cordis.europa.eu/fp7/ict/pcp/projects_en.html

More Info about national PCP initiatives in Member States: http://cordis.europa.eu/fp7/ict/pcp/msinitiatives_en.html

Pilotsstarted

Framework identified and/or

Pilots in preparation

HungaryBelgium

Netherlands

Awareness RaisingExploring possibilities

Denmark

Austria

Finland

Sweden

Poland

Working onframework

GermanyFrance

Luxembourg

Ireland

Cyprus

Romania

Slovenia

Slovakia

Bulgaria

Czech Republic

Estonia

Greece

Latvia

Lithuania

Malta

Portugal

Spain

Norway

Switzerland

Italy

Projects in dotted-line are cross-border EC funded PCP projects that have started:

SILVER: started January 2012 (Supporting Independent Living of Elderly through Robotics)

CHARM: started September 2012 (Common Highways Agency / Rijkswaterstaat Model for traffic management of the future)

V-CON: started October 2012 (Virtual Construction / Modelling of Roads)

SMART@FIRE: started Nov 2012 (Integrated ICTs for Smart Personal Protective Equipment for Fire Fighters and First Responders)

DECIPHER: started February 2013 (new applications based on Distributed EC Individual Personal Health Records)

PRACE 3IP: started July 2012 (PRACE 3rd phase on high energy efficient high performance computing)

SILVER

UK

Iceland

CHARM

V-CON

SMART@FIRE

DECIPHER

PRACE 3IP

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

8/11

Regulatory requirement to seriously reduce CO2 emissions by 2016 without negative effectson health/environment, beyond what market is able to offer

PCP started in 2011, currently comparing solution approaches of 5 vendors, time-to-marketshortened

Follow-up procurement for deployment in preparation for 2014 (open to whole market)

More info on this case on: http://cordis.europa.eu/fp7/ict/pcp/docs/statoil-pcp-case-v2.pdf

PCP example on CO2 emissions Large projectCarbon capture Norway attracting large firmsStatoil/Gassanova

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

9/11

9

Potential 160m

p.a. saving

Potential 30m p.a. saving4,000 per HCAI avoided

Potential 17m p.a. saving

Potential 19m p.a. saving

www.nic.nhs.uk

Example PCP-like Smaller projectsin Healthcare attracting SMEs

Potential Value to NHS:

The NIC has supported the development of innovations to improve the quality of thepatient experience and generate significant cost savings to the NHS (236m).

Value to the economy:

With the support of the NHS National Innovation Center (NIC), a number ofinnovations have been able to attract significant financial investor funding (290m).

More info on this case on: http://cordis.europa.eu/fp7/ict/pcp/uk-nhs-pcp-fcp-case.pdf

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

10/11

Example EU funded cross-border PCP

7 Local and regional contracting authorities from 5 EU Member States carrying out this PCP jointly:city of Odense and region of Southern Denmark (Denmark), city of Vsters (Sweden), city of Vantaa andOulu (Finland), city of Stockport (UK), city of Eindhoven (Netherlands).

SILVER contracting authorities procure R&D services via the PCP to get robotics solutions developed andtested in the 5 participating countries that will allow by 2020 to care for 10% more elderly people livingindependently at home with the same amount of care staff.

SILVER call for tender is 'OPEN NOW'.Potentially invited tenderers are invited to info meetings in March-April

and to make offers by 12 June (see SILVER website and tender publication in OJEU) !

www.silverpcp.eu

8/10/2019 101_PCP and PPI Berlin Event 21-22 March-2013-EC_VP

11/11

For more info: http://lowcarbon-healthcare.eu/

UK brand name for PPI = Forward Commitment Procurement (FCP)

Low carbon healthcare PPI started 2006Introducing more energy efficient LEDs innetwork of over 20 hospitals in 8 EU countries(cross border PPI cooperation funded by EC/DG ENTR)

30% energy consumption saving 88% maintenance savingsTotal cost savings enable take-in of +10% patients

Swedish environmental/energy efficiency PPIsdone by NUTEK/STEM agency:

heating-ventilation-cooling of buildings public transportation (hydrogen busses) office blocks (sun shading, lighting) white appliances (washing machines, fridges) wind energy parks

Result: Reduced the SE dependency on nuclear energy with 15% through PPIs incombination with product certification/labeling, take-up subsidies & tax incentives

More on UK & SE PPI cases: http://cordis.europa.eu/fp7/ict/pcp/msinitiatives_en.html

PPI examplesIn Europe

(PPI is called teknikupphandling in Sweden)