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Demand Acceleration

Innovation is not limited by supply but by demand. Demand Acceleration is a methodology for how the public sector can drive innovation and transition with public procurement as an instrument, by accelerating the demand for sustainable solutions. 

Public procurement can drive innovation!

Public procurement is worth over 80 billion euros in Sweden alone. If only one percent could be used to drive innovation and development, it would correspond to more than twice as much as the Swedish Innovation Acency Vinnova's current budget.

Are you interested in how public sector can drive innovation of sustainable solutions, based on needs and challenges, through an efficient procurement process? Read more about the Demand Acceleration methodology below, or contact us!

Lina Svensberg, Process Leader

Watch the film to get an overview of the methodology, as well as an insight into how the municipality of Karlstad procured the very first service with the support of Demand Acceleration.

Here you will find another film which also describes the methodology, but with an even greater focus on the process and innovation work in the first procurement.

Six Principles of Demand Acceleration:

1. Procurement can drive development and innovation

Purchases of services and products in the public sector are made through procurement, where tenders are evaluated against each other based on prescribed specifications. For innovation, on the other hand, specifications are rarely either formulated or known in advance and the process itself becomes a journey into the unknown. But it is possible to combine procurement and innovation. A prerequisite for this is to see the five basic principles of public procurement (non-discrimination, equal treatment, proportionality, transparency and mutual recognition) as guidelines for interaction between the public customer and its suppliers.

2. Innovation requires room for experimentation and learning

Innovation is about new or better solutions that create value for society, companies and individuals. Those solutions generally arise through an exploratory, experimental and iterative process, where the development of the product goes hand in hand with the development of a market for the product. If you want to create conditions for innovation, you need to create space for this in your organization. This means that there needs to be resources for exploration and experimentation, and a plan for when and how those resources can be used. An anchoring in the organization is also required, from all the roles and functions involved. Most innovation efforts fail. But comprehensive analyzes early in the process, with the aim of minimizing the risks, above all lead to longer processes, not necessarily better ones. It is the ability to embrace failure, and to learn step by step what works and what does not work, that is the key to success. And it is a necessary mindset for successful procurement of innovations with a scalability perspective. This means that the participants in the process can take limited risks at the beginning, when there is the greatest uncertainty, and gradually increase risk-taking as the uncertainty decreases.

3. Success cannot be analyzed beforehand, only be experienced as it emerges

Innovation is usually a co-creation process between users and those who provide the solutions. But it is not possible to analyze in advance which supplier will co-create the best solution with the users. Instead of selecting a single supplier for the co-creation process, many alternative suppliers should be invited. Those who prove to lack the conditions to meet the customers' needs, or to be able to sustainably scale up the solution on the market, should be discarded throughout the process. The innovation process therefore needs to provide room for co-creation in several phases, where each phase means reduced risk and uncertainty, and where those who do not have the conditions to meet the needs are discarded.

4. Interaction triggers insights

Needs, requirements and solutions are exposed, developed and sharpened as the innovation emerges. Use of mockups, slideware, prototypes and MVPs creates conditions for interaction and dialogue. The understanding of the need will thus develop during the course of the process. In a co-creation process, this means that the potential solutions and their suppliers need to be included in the process as early as possible. Therefore, the formulation of the need does not need to be seen as an end point of a needs analysis, but as a starting point for a needs analysis integrated in the innovation process. The buying organization often needs to develop its operations in order to benefit from the innovation. The interaction with the emerging innovation creates insights about one's own operation, and operational development becomes an integral part of the procurement process and creates conditions for successful implementation.

5. Scalablility aspects are essential, both to the customer and the supplier

Scalability needs to be included in all stages of the process, from the market potential of the need, to the evaluation of the solution's business potential and the suppliers' ability to spread the solution. If the solution is not spread, then value is only created for the procuring customer, and other organizations with similar needs cannot take part in the solution. This limits the societal value of the innovation. The first and only customer then needs to bear all the costs of further development and maintenance, and the supplier has only one source of income. No single customer can compete with the development that is forced to be improved in a competitive market. It also means that it is in the customer's interest that the supplier succeeds in creating an economically sustainable solution - and that the customer should strive for their suppliers to succeed. For the supplier, this means that in parallel with the development of the solution, they also need to develop their business model in order to assess and develop the scalability of their business. A profitable and scalable business model is a prerequisite to ensure a long-term and value-creating delivery to the purchasing organization and spread the solution to others. But since it is not in the public organization's mandate to evaluate or develop the market potential of a need or a solution, an intermediary needs to be involved in the process.

6. Intellectual assets belong to the supplier

The suppliers must own the intellectual assets developed during the process. This can be combined with the principle of co-creation in the following way: The supplier owns his idea (concept/prototype/product etc), but not the insights that emerge in the purchasing organization, as a result of interaction with the idea (the concept/prototype/product etc ). All insights that are triggered in the purchasing organization during the process need to be shared with everyone participating in the process, including all the suppliers. In this way, the collective work of everyone involved in the process will lead to a deeper understanding of the need, and the final product will benefit from all the insights that emerged during the process.

Film: Hear Lina Svensberg talk about all the principles

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Contact us

Lina Svensberg

Process Manager
+46 (0)76 137 97 68

Elin Fouganthine

Process Manager
+46 (0)73 328 17 36



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