Procurement for Innovation: Lessons from the US Experience

In response to interest from the European Union (EU) in using public procurement to drive innovation in Europe's single market, this article explores US procurement methods which encourage innovation, including competitive negotiations, small business innovation research initiatives, and 'other transactions'. The article also assesses broader US reforms which have facilitated innovation, including the US government's willingness to allow private firms to retain intellectual property rights in innovations created under federal procurements. The article concludes by noting that while not all these approaches may succeed in the EU, in part because of the United States' unique history, culture and economy, the US experience does suggest that the United States has useful lessons learned to share on procurement reforms intended to spur innovation.