PCP and PPI in EC policies (synergies between H2020 and structural funds for PCP and PPI projects) Vassilis Tsanidis Dr. Jur. Innovation Unit (F2) DG CNECT European Commission Why Innovation procurement?

Innovation Procurement = PCP + PPI / Complementarity Pre-Commercial Procurement(PCP) to steer the development of solutions towards concrete public sector needs, whilst comparing/validating alternative solution approaches from various vendors Public Procurement of Innovative Solutions(PPI) to act as launching customer / early adopter / first buyer of innovative commercial end-solutions newly arriving on the market

Investing in innovation procurement = Investing in growth and jobs Public procurement accounts for some 2400 €Bn/year (19% of GDP) in Europe Almost half of the ESIF budget is spent through public procurement (only the above the threshold procurements is measured) Majority of procurement budget in EU is spent at regional level Innovation Procurement: win-win situation Modern and efficient public services More competitive European companies

R&D public procurement/year Innovation procurement is under-used in the EU R&D public procurement/year 50 $ Bn 7,5 €Bn eGov solutions procured are 'innovative' 15% 5% Public procurement is 'the tool' that enables potential buyers to steer industry R&I to its needs. However, it is under-used in EU In Europe most of the time we buy off the shelf eGov solutions instead of going for fit for purpose, cutting edge solutions that would offer better services to European citizens. Study published here: https://ec.europa.eu/digital-agenda/en/news/quantifying-amount-public-procurement-ict-and-rd-across-europe

Exploring possibilities Exploring possibilities PCPs projects on-going Progress PCP implementation Learn from first movers Framework identified and/or pilots in preparation Awareness Raising Exploring possibilities Working on framework Pilots started 2007 Denmark Malta Ireland Sweden Latvia Lithuania Estonia Romania Norway Poland Spain Slovenia Bulgaria Cyprus France Greece Netherlands Slovakia Germany Finland Luxembourg Iceland Italy Austria Czech Republic Belgium Portugal UK Switzerland Hungary Framework identified and/or pilots in preparation Awareness Raising Exploring possibilities Working on framework PCPs projects on-going or finished 2015 Malta Estonia Finland Sweden Latvia Romania Lithuania Ireland Poland Cyprus Bulgaria Netherlands Greece Spain UK Norway Slovenia Belgium Italy Czech Republic Luxembourg Denmark Iceland Slovakia Portugal France Germany Austria Switzerland Hungary 5

Why Innovation Procurement? Speed up public sector modernisation – improve quality and efficiency of public services with breakthrough solutions Get better value for money through cooperation - enable public sector around Europe to share cost + experience to buy new solutions that can respond to concrete public needs Create growth and jobs in Europe – help innovators bring European R&D to the market (the majority of R&D in H2020 funded PCPs should take place in Europe, ltd set of first test products can be bought in the PPI from companies in the PCP)

Evidence from Successful Examples Shortening of time-to-market Attracting venture capital Creating lead markets Retaining lead market position cheaper products and higher product quality Removal of supplier lock-in Benefits on local economy

Overview EU funded projects doing PCPs (FP7) More info on: http://ec.europa.eu/digital-agenda/en/eu-funded-projects HEALTH AGEING NYMPHA-MD (PCP) THALEA (PCP) Tele-detection/care of ICU patients Mental care for bipolar disorders SILVER (PCP) UNWIRED-HEALTH (PCP) Robotics ageing well Mobile care for vaccination & heart failure DECIPHER (PCP) Human Brain project Services mobile health data PCP on supercomputing/brain modelling TRANSPORT E-GOV Cloud for Europe (PCP) CHARM (PCP) Cloud computing Traffic Management PREFORMA (PCP) V-CON (PCP) Long term digital preservation Virtual road infrastructure modelling SUSTAINABILITY EDUCATION IMAILE (PCP) ENIGMA (PCP) Personalised learning needs City Lighting SAFETY PRACE 3IP (PCP) SMART@FIRE (PCP) High Performance Computing Smart Textiles ICT for fire fighters

Overview EU funded projects doing PPIs (CIP) More info on: http://ec.europa.eu/digital-agenda/en/eu-funded-projects HEALTH AGEING HAPPI (PPI) STOP AND GO (PPI) Healthy Ageing Telecare for elderly with multiple conditions ECOQUIP & LCB-HEALTHCARE (PPI) Low carbon healthcare TRANSPORT FIRED-UP (PPI) SYNCRO (PPI) Vehicles Fire Fighters Smart roads communication SUSTAINABILITY SPEA (PPI) PRO-LITE (PPI) Sustainable buildings Cities/Metro Lighting INNOBUILD (PPI) Sustainable buildings INNOBOOSTER (PPI) Office Furniture & Lighting INNOCAT (PPI) Sustainable catering PROBIS (PPI) PAPIRUS (PPI) Sustainable construction Sustainable construction

EU funded CSAs/Networks of procurers (FP7/CIP/H2020) More info on: http://ec.europa.eu/digital-agenda/en/eu-funded-projects HEALTH AGEING SAEPP (preparing PCP) C4BI (networking) PRO4VIP (preparing PCP) Ambulance ICT Cities on healthcare ICT for Visually impaired EPP-eHealth (preparing PCP/PPI) INSPIRE (Training PCP, link with VC) Cities on e-health E-health procurers TRANSPORT P4ITS (Preparing PPI) TRANSFORM (Networking) Intelligent Transport Systems City/Regional transport ICT COMPLETE (Preparing PPI) PICSE (Preparing PCP/PPI) Photonics broadband Cloud computing research cloud SUSTAINABILITY BRODISE CEPPI 2 (prep PPI) WATER PIPP Cities – energy consumption Cities brown field decontamination Water procurers SPP regions (capacity building) EURECA (prep PPI) PPI – sustainability PPI4WASTE Green data centers InnProBio Forum (capacity building) Authorities Waste management GREENS (prep PPI) PPI – bio based products Energy agencies – CO2

Data collected from EU funded projects Opening route-to-market for new players/SMEs 75,5% of contracts won by SMEs (SME lead bidder, bidding alone or with partners) Compared to 29% in public procurements across Europe Mostly small young SMEs: 34,5% below 10 people, 81% below 50 people, 56% less than 10 years old Stimulating cross-border company growth 33% of contracts won by bidders that are not from a country of any of the procurers in the buyers group (e.g. DE company working for UK+NL procurers) Compared to 1,26% in public procurements across Europe Relevance of PCPs also to universities 33% of winning contracts have university/R&D center partner in consortium - Winning SMEs are also often university start-ups Encouraging wider market commercialisation Bidders offered on average 50% cheaper R&D price for keeping their IPRs (they see IPR value/real market beyond the first potential buyers, the PCP procurers) Creating growth and jobs in Europe All bidders do 100% of R&D in Europe (except 1 doing 85% of R&D in Europe)

Innovation Procurement Support of Innovation Procurement in the ESIF context

Why Innovation Procurement at Regional Level ? Why PCP/PPI at regional level Why Innovation Procurement at Regional Level ? ……it is a win-win situation for Regions/ Public Authorities Realise concrete quality and efficiency improvements to public services in the region Obtain better value for money solutions(economies of scale) and reinforce regional cooperation through joint procurements Improve the local innovation ecosystem as stronger local public sector demand for innovative solutions attracts additional financial investments into the region and combats relocation of innovative companies to other parts of the world Enhance the technical know-how of the Region Innovators Can get first client for new product (lead customer) Shorten time to the market (because of earlier customer feedback) Wider commercialization opportunities (companies keep IPR ownership in PCP)

Political encouragement Encourage demand side to meet supply side What can countries/regions do? Political encouragement Modernising public sector 'a priority' Quality-efficiency improvement targets e.g. Lombardia/IT, UK, Flanders/BE Target % proc budgets to innovation Monitoring framework e.g. UK, NL, ES, Nordics, FR Implementation - Innov Proc Competence center Training / assisting procurers (e.g. SE, FI, ES, Flanders/BE, DE) - Innov Proc financial support program Encourage demand side to meet supply side Early notification innov proc needs Open market consultations Meet the buyers events Leverage EU funding Horizon 2020 Increased (syn) ESIF support for EIB loans innov proc

Cohesion policy may support measures in the Operational Programs (OPs) to Foster innovation through public procurement TO 1 (IP1B) Strengthening research, technological development and innovation Target group: public sector Foster better meeting of public needs TO 1 (IP1A) enhancing research and innovation (R&I) infrastructure TO 2 (IP2C) strengthening ICT applications for e-government, e-learning, e-inclusion, e-culture and e-health TO 4 (all IPs) supporting the shift toward a low–carbon economy in all sectors TO 5 (all IPs) promoting climate change adaption, risk prevention and management TO 6 (all IPs) preserving and protecting the environment and promoting resource efficiency TO 7 (all IPs) promoting sustainable transport and removing bottlenecks in key network infrastructures Target group: town planners, transport, environment, health etc. ministries – ERDF, Cohesion Fund and ESF) Foster more innovative public procurement procedures and administrative capacities TO 11 (IP11) Enhancing institutional capacity and an efficient public administration TO 2 (IP2C) strengthening ICT applications for e-government, e- learning, e-inclusion, e-culture and e-health Target group: procurement officers

ESIF may also support: Major projects / Joint Action Plans in cooperation with other Regions and key players in the Cohesion Policy Coordination, Networking and Preparation activities for the implementation of a PCP and/or PPI through European Territorial Cooperation Programs (ETC)

on Innovation Procurement Possible Synergies between the ESIF and H2020 on Innovation Procurement

Joint or simultaneous use of funds CATEGORIES OF POSSIBLE SYNERGIES BETWEEN H2020 AND ESIF ON THE PCP/PPI IMPLEMENTATION Joint or simultaneous use of funds Sequential funding Additional funding Alternative funding

GENERAL RULE IT IS NOT ALLOWED !!!!!! To use ESIF and H2020 funding accumulatively to finance the same cost/expenditure item To finance the own contribution of the participant from H2020 or ESIF

Coming soon PCP impact study Compared the impacts of national PCPs across EU compared to other procurements Concludes PCP is more effective in creating route-to-market for SMEs + stimulating new open standardised solutions + avoiding vendor lock-in Findings consistent with results from first EU funded PCPs: Increased EU promotion & assistance on PCP & PPI for 2016-17 Consortium of experts appointed that will do promotion and provide training and local assistance to public procurers across the EU Member States: Next 3 years, 12 info and training events on PCP & PPI in different EU countries: 3 major policy events + 9 smaller events with public procurers in different sectors.  Training based on a toolkit for policy makers, public procurers and legal staff. Procurers can also send questions to a helpdesk that posts replies to FAQs online. Local assistance for public procurers that intend to start concrete PCP and PPIs for ICT based solutions (includes legal assistance in the start-up and implementation phase of a PCP or PPI). Target is to kick-start 6 new PCPs and 6 new PPIs. More info: http://www.eafip.eu/

For more info on Innovation Procurement please visit the following site: http://ec.europa.eu/digital-agenda/en/innovation-procurement For the synergies between the H2020 and the ESIF please visit: http://ec.europa.eu/regional_policy/sources/docgener/guides/synergy/synergies_en.pdf

Thank you for your attention Vassilis Tsanidis Dr. Jur Thank you for your attention Vassilis Tsanidis Dr.Jur. Innovation Unit (F2) DG CNECT European Commission