Innovation Procurement in Croatia

4. Moving forward: Action plan to promote the uptake of innovation procurement in Croatia

Abstract

This chapter provides policy recommendations that Croatia could consider to promote the uptake of innovation procurement based on the key findings from the analysis of the current state of play of innovation procurement in Croatia. It also presents an action plan table which describes the context, responsible authority(ies) and the estimated timeframe for each recommendation.

This report assessed the current state of play of innovation procurement in Croatia by focusing on the enabling elements of innovation procurement. Based on this analysis, the report provides the government of Croatia with recommendations to promote the uptake of innovation procurement under the leadership of key institutions: (i) the Ministry of Economy (MINGO), as the public procurement authority, and (ii) the Croatian Agency for SMEs, Innovations and Investments (HAMAG-BICRO) as the competence centre of innovation procurement in Croatia.

In the short and medium term, Croatia could aim at promoting innovation procurement which seeks incremental innovation like the case of the city of Koprivnica rather than transformative innovation. This will allow for gradual paradigm shift among key stakeholders by moving from traditional procurement procedures such as open procedure to more innovation-friendly procedures that require dialogue and negotiation such as competitive procedure with negotiations and competitive dialogue.

To promote the uptake of innovation procurement, Croatia could benefit from considering the following policy recommendations.

4.1. Aligning the institutional design and the strategic framework to develop new opportunities to use public procurement for innovation.

With the transposition of the 2014 EU Directives in its national regulatory framework, Croatia has developed all the procedural means allowing to leverage public procurement to support innovation. However, an overarching vision, enshrined in a dedicated strategy, would provide contracting authorities and contracting entities with a better understanding of the rationale for using public procurement as a tool to diffuse innovation and demonstrate a greater commitment to reach common objectives. Such strategy could also help bringing together main stakeholders which contribute to a robust innovation procurement ecosystem and provide opportunities to review the effectiveness of related-procurement policies. Therefore, Croatia could benefit from:

• developing a strategy on innovation procurement, whether stand-alone or part of the broader national public procurement policy and ensure its alignment with sectoral policies.

• considering the possibility of establishing a formal institutional mechanism to coordinate innovation procurement policies at higher level to demonstrate a clear vision and commitment.

• providing contracting authorities and contracting entities with a better understanding of how this strategy can be translated into daily procurement practices, through dedicated guidance or support.

4.2. Strengthening and structuring capacity-building initiatives to upskill the procurement workforce and make the public sector an innovation partner of choice.

Increasing the use of public procurement projects as catalysts of innovation is a complex endeavour on its own and requires a skilled procurement workforce. Croatia recently leveraged on the initiatives to build innovation procurement capacities in the public sector, but an effective uptake of innovation procurement in the country will require further professionalisation initiatives sustainable over time.

The assessment of the current level of competences of public buyers and the evidence gathered on training needs supported the design of a tailored training programme covering the entire cycle of innovation procurement. 15 trainers from four entities (MINGO, HAMAG-BICRO, the Central State Office for Central Public Procurement and SAFU) were trained and had the opportunity to provide training in two pilots. These experiences confirmed the benefits of a practical, case-based approach to trainings and helped to refine content.

To ensure sustained benefits, this knowledge transfer now needs to be disseminated throughout the Croatian public procurement ecosystem and for this, Croatia could consider the following:

• follow-up on the commitment to roll-out several trainings on innovation procurement in the years to come.

• review and update the training programme by carrying out a self-assessment survey to public procurement officials and/or a feedback survey to participants of training.

• maintain the current policy to consider the training on innovation procurement as part of 32-hour training for the renewal of the certificate under the national certification framework or establishing a dedicated certificate for innovation procurement, if highly demanded, in the long run.

• update a manual by adding to new elements and cases from Croatia as more cases of innovation procurement are witnessed in the country.

• consider the possibility of establishing excellence award system on innovation procurement.

• consider developing educational programs for bidders that not only inform but also prepare them for innovation procurement procedures, with a focus on creating tailored, targeted content.

4.3. Reinforcing a Competence Centre for Innovation Procurement.

A competence centre for innovation procurement is an organisation or organisational structure officially designated by the government, with a legal mandate to promote the broader adoption of procurement methods and procedures supporting innovation. Its responsibilities include offering practical and/or financial support to public procurers for the preparation and implementation innovation procurement across various sectors of public interest. Enhancing the role of such a centre can profoundly influence the adoption of innovation procurement nationwide by addressing current gaps and fostering a more supportive and dynamic environment. Croatia could consider the following actions:

• enhance the mandate of an existing centre to effectively drive and support the adoption of innovation procurement practices in Croatia.

• enhance, in the medium-term, the existing subpage within the portal of HAMAG-BICRO by including comprehensive information, such as training programmes, technical support services, and examples of good practices on innovation procurement, to improve accessibility and usability for contracting authorities and economic operators.

• develop, in the longer term, an independent portal dedicated to innovation procurement.

• develop digital platforms and networking events to facilitate interactions between contracting authorities and economic operators to exchange ideas and identify needs related to innovation procurement.

• foster collaboration with key stakeholders to strengthen partnerships with entities to provide co-ordinated technical support.

• secure resources for sustainability by ensuring adequate funding and staffing to support the evolving and expanding functions of the competence centre.

• ensure that along with experts specialising in SMEs, startups, and innovation promotion, the team working on this task should also include several professionals with advanced expertise in public procurement.

4.4. Establishing a Comprehensive Monitoring System for Innovation Procurement

Establishing a comprehensive monitoring system for innovation procurement provides valuable insights into the effectiveness and impact of procurement strategies, enabling data-driven decision-making and continuous improvement. By tracking progress and identifying best practices, a monitoring system reinforces accountability, promotes transparency, and strengthens stakeholder confidence in innovation procurement initiatives. To ensure effective implementation, Croatia could consider the following actions:

• implement the OECD's performance measurement framework, which includes 33 indicators (and 56 sub-indicators) to address the lack of structured monitoring of innovation procurement activities.

• ensure data availability and quality by the collection and maintenance of relevant data, including pre-commercial procurement-related information, to enable accurate performance assessment.

• testing the performance measurement framework across different innovation procurement procedures, adjusting indicators as needed before a full-scale launch.

4.5. Engaging Stakeholders to Promote Innovation Procurement

The success of innovation procurement hinges on the active engagement and understanding of all relevant stakeholders, including economic operators, senior management at contracting authorities, remedy bodies, and control bodies. Croatia could take the following steps to foster stakeholder buy-in:

• raise awareness and build capabilities by providing targeted training and outreach to key stakeholders such as economic operators, DKOM (the remedy body), and control bodies to enhance their understanding and support for innovation procurement.

• increase market interest by using mechanisms like the Best Price-Quality Ratio (BPQR) criterion and more active market consultations to encourage economic operators to participate in innovation procurement opportunities.

• increase collaboration among key actors such as MINGO and SAFU by working closely to raise awareness and strengthen the capability of control bodies to oversee and support innovation procurement effectively. This could involve the establishment of a joint task force and coordinated training initiatives to ensure effective oversight and support for innovation procurement.

Table 4.1 presents an action plan table to implement these recommendations to promote the uptake of innovation procurement in Croatia. It describes the context, responsible authority(ies) and the estimated timeframe (short, intermediate, long) for each recommendation proposed in this report. This action plan table for policy recommendations is expected to stimulate policy dialogue on innovation procurement in Croatia and feed elements to establish a strategy of innovation procurement in the future.

Table 4.1. Action plan for implementing the recommendations to promote the uptake of innovation procurement in Croatia

Rec No.	Initiative	Context	Recommendation	Responsible authority(ies)	Estimated timeframe (**)
1	Regulatory framework	Public buyers need to understand the regulatory framework related to innovation procurement.	Croatia could benefit from continuing to clarify to contracting authorities a legal aspect of innovation procurement, in particular, R&D procurement.	MINGO	Short
2	Uptake of innovation procurement	The uptake of innovation procurement is still limited in Croatia. There are only a few procurement procedures in Croatia which could be classified as innovation procurement.	In the short and medium term, Croatia could focus on promoting innovation procurement which seeks incremental innovation rather than transformative innovation. This will allow for gradual paradigm shift among procurement officials by moving from traditional procurement such as open procedure to non-traditional procedures that require dialogue and negotiation such as competitive procedure with negotiations and competitive dialogue. In the long-term, Croatia could promote innovation procurement which involves R&D to seek more drastic innovation such as PCP and innovation partnership.	MINGO / HAMAG-BICRO	Short - Long
3	Institutional framework	Currently, Croatia does not have a formal institutional mechanism to coordinate innovation procurement policy at high level (e.g. inter-ministerial committee).	Croatia could consider the possibility of establishing a formal institutional mechanism to coordinate innovation procurement policy.	MINGO and all the key stakeholders	Medium
4	Strategy	Currently, Croatia does not have a national public procurement strategy nor a strategy of innovation procurement. In addition, Croatia does not have quantitative targets of innovation procurement.	Croatia could benefit from developing a strategy of innovation procurement, whether it is stand-alone or part of the national public procurement policy. It is essential to align a strategy of innovation procurement with sectoral policies. Croatia could consider the possibility of setting up quantitative targets of innovation procurement. However, Croatia could even start from specifying the number of innovation procurement procedures rather than the share against the total of public procurement procedures to avoid setting too ambitious targets from the beginning.	MINGO	Medium
5	Capacity-building	A comprehensive training programme on innovation procurement was developed in collaboration with the OECD under the TSI project.	Croatia could benefit from: • continuing to provide training on innovation procurement under the initiative of the key stakeholders of public procurement system; and • further rolling out workshops for economic operators	MINGO / HAMAG-BICRO	Medium
6	Capacity-building	Currently, training on innovation procurement can be counted as 16 hours of 32-hour training for the renewal of certificate.	Croatia could benefit from considering the possibility of linking the training programme on innovation procurement with the training requirements under the current national certification framework to maximise the use of training programme. For the time being, Croatia could continue considering the training on innovation procurement as part of 32-hour training for the renewal of certificate. In the long term, Croatia could consider the possibility of establishing a certificate for innovation procurement, if highly demanded.	MINGO	Medium
7	Capacity-building	A manual on how to carry out innovation procurement was developed in collaboration with the OECD under the TSI project. In addition, excellence award system can contribute to increasing the motivation of public procurement officials as well as encouraging the knowledge sharing of good cases of innovation procurement in Croatia.	Croatia could benefit from: • updating a manual by adding to new elements and cases from Croatia; and • considering the possibility of establishing excellence award system on innovation procurement.	MINGO / HAMAG-BICRO	Medium
8	Capacity-building	Procurement officials at contracting authorities/ entities face difficulties in convincing key actors within contracting authorities such as the senior management to approve the launch of innovation procurement process due to the lack of awareness of innovation procurement.	Croatia could benefit from raising awareness of innovation procurement among key actors within contracting authorities, in particular, senior management.	MINGO / HAMAG-BICRO	Medium
9	Competence centre	HAMAG-BICRO has a subpage of the competence centre of innovation procurement within its website. However, there is opportunity of further enriching its content. HAMAG-BICRO has the plan to launch a survey to contracting authorities in Croatia to collect the needs of innovation in the public sector. However, HAMAG-BICRO does not provide digital platforms nor networking events whereby contracting authorities and economic operators interact to exchange ideas and needs on innovation.	In the medium-term, HAMAG-BICRO could benefit from enriching the content of this one-stop portal. For the time being, HAMAG-BICRO could consider the possibility of publishing the information such as training programme, technical support, and good practices (such as innovation procurement carried out by the city of Koprivnica). In addtion, HAMAG-BICRO could consider the possibility of establishing digital platforms and networking events whereby contracting authorities and economic operators interact to exchange ideas and needs on innovation. In the long-term, develop an independent portal dedicated to the competence centre of innovation procurement.	HAMAG-BICRO	Medium - Long
10	Competence centre	HAMAG-BICRO had been facing challenges in securing sufficient resources for its effective operations since the PPI2Innovate project was completed.	It is essential to secure adequate resources for the effective operations of the competence centre of innovation procurement, as its scope evolves and expands.	Government of Croatia	Short
11	Market readiness	Currently, the level of awareness of innovation procurement among economic operations is low. The survey carried out to economic operations in Croatia showed the relevance of raising awareness of innovation procurement and providing economic operators with innovation procurement training. In addition, active market consultation is key to attract innovation procurement.	Croatia could benefit from • organising workshops to raise awareness of innovation procurement among economic operators. The presence of key stakeholders of the public procurement system will contribute to communicating strong commitment of the public sector in innovation procurement; and • promoting more active market consultation	MINGO / HAMAG-BICRO	Short
12	Remedy system	DKOM needs to be familiar with innovation procurement as Croatia witnesses more cases of innovation procurement in the future.	Croatia could benefit from increasing the capability of the DKOM officials in reviewing the remedies claimed against innovation procurement procedures in the future.	MINGO / DKOM	Long
13	Control system	SAFU is expected to play key role in promoting innovation procurement among control bodies.	MINGO and HAMAG-BICRO could benefit from strengthening further collaboration with SAFU to raise awareness of innovation procurement among control bodies as well as to reinforcing the capability of control bodies on innovation procurement.	SAFU	Medium
14	Performance Measurement	The performance measurement framework of innovation procurement was proposed by the OECD with 33 indicators (56 sub-indicators). Most of the indicators are calculable even now except some indicators such as PCP. Croatia will be able to launch it as the country witnesses more cases of innovation procurement in the future.	Croatia could benefit from: • ensuring the availability and access of relevant quality data to assess the performance of innovation procurement. In the long-term, it will be necessary to establish the mechanism to collect the data on PCP; and • piloting the identified indicators by calculating them for all the innovation procurement procedures (a few procedures per year) until Croatia witnesses an increased number of innovation procurement procedures in the future	MINGO	Long

Note: (*) Short-term: recommendations could be implemented within the next 12 months, Medium-term: recommendations could be implemented between 1 to 3 years, Long-term: recommendations could be implemented in more than 3 years.

Source: Created by the authors