Driving the provision of innovative solutions through intelligent public demand is another way for governments to stimulate innovation. In most countries, public consumption accounts for approximately 20 percent of total domestic demand, so there is a huge potential for stimulating innovation through intelligent demand.

Usually, public demand is subject to restrictions to guarantee fair competition. Obviously, such restrictions are useful and necessary. But the question is if the public sector could use its purchase power more intelligently to create more innovative solutions to the challenges facing society?

Traditionally, the private sector has provided new ideas and products requested by the public sector. Today this is changing. The public and private sector are increasingly developing innovative solutions in close collaboration, often initiated by the public sector.

2 policy actions are suggested:

1. Public procurement
2. Platforms and systems

Suggested policy actions:

1. Public procurement

Government should:

• Use public procurement to stimulate private innovation where the government acts as a novel firm.

2. Platforms and systems

Government should:

• Initiate well-organized experiments where private companies are invited to provide innovative solutions to societal challenges.
• Provide new education programmes based on the latest research, targeting public institutions and civil servants to raise innovation readiness in public institutions and endow employees with better skills to collaborate with the private sector in order to find new innovative solutions to welfare challenges.
• Assist in creating new types of physical or digital platforms and infrastructure where consumers, users and companies could meet and interact.