Procurement for Innovation

In “It’s Not All About Growth for Social Enterprises,” Kimberly Dasher Tripp discusses the need for “cultivating the ecosystem” work.  This framework challenges the idea that the size of a venture is the most important aspect of measuring success and instead looks to measure overall changes sustained, with an eye on populations and regions impacted.  Paul Bloom builds on some of these ideas when discussing social ventures and scale.  He specifically calls for some interaction with government through lobbying and, what could easily be a part of policy debates, stimulating market forces through fair trade.

I believe that government could play an even larger role in social innovation.  Particularly, rethinking the government procurement process has the potential to affect the ways companies develop their ideas and how the larger ecosystem is built around those investments.

A 2015 OECD Report estimated that procurement contracts amount to a quarter of total U.S. government expenditure with over 60% of contracts spending an estimated $2 trillion dollars at the state and local levels.  Some of these contracts are funding non-profit organizations doing service work.  In a blog about how government contracts social services Third Sector Capital Partners notes that the government procurement process could be improved noting “The American social sector is likely to become driven by performance, rather than limited by compliance.”

This is reflective of larger issues with how procurement could change to encourage innovation, including the way contracts are competed for by for-profit companies.  David Gragan, Chief Procurement Officer, District of Columbia noted in the Power of Social Innovation Webinar Series at the Harvard Kennedy School that the procurement landscape today is slow and laborious, featuring an exaggerated focus on process and unnecessary redundancy.  Noted ways to improve included simplifying problem statements to encourage innovation and more generally streamlining what is currently a very bureaucratic system.

This brings up several questions for me.  What else can government, and the large amounts of money that go into procurement, do to spur innovation?  How can the understanding of success in government procurement also be shifted to “cultivate the ecosystem” both in social impact and in the overall functioning of government programs themselves?