Good practice:

Driving innovation through public procurement -Small Business Research Initiative (SBRI) catalyst

SBRI Catalyst is a Welsh Government initiative that enables the development of innovative products and services through Public Procurement Innovative (PPI). It is not supported by the ERDF currently in Wales and the programme is administered by Innovative UK.
This Policy instrument came from evaluation of the policy mix to maximise public sector procurement spend and the barriers to its use. The instrument connects challenges of the public sector with innovative ideas from industry, leading to better public services and improved efficiency and effectiveness. The 1 pilot plus 14 SBRI challenges have been launched in Wales since 2012.
It generates new business opportunities for companies, especially small and medium-sized enterprises (SMEs), providing a route to market for their ideas and bridges the seed funding gap experienced by many early stage companies.
SBRI Catalyst funding allows the public sector becomes an intelligent lead customer and successful businesses gain opportunities within the public sector with their innovative solutions whilst retaining their intellectual property rights. A 2 stage competitive process, a contract for feasibility (up to €100,000) and then if successful, a larger demonstration contract (up to €1 million) normally for 2 ideas.
Pre-start-ups may apply, however the contracts can only be awarded to legal entities. All applicants must demonstrate a route to market.
SBRI promotes economic growth of companies & creates new markets

The financial resources allocated for the initiative reached €7.37m (€2.95m from WG €2.6m from Innovate UK and €1.8m from challenge owners or other stakeholders). Support available started at 100% but has been reduced depending on the sector to 30-60%

Welsh Government SBRI Catalyst has launched 15 challenges (14 +1 pilot challenge) since 2012. Projects have involved Welsh Government’s (WG) departments (Transport, Health, Environment, Food, and Education), Natural Resources Wales (Environment agency), 2 Regional Health Boards, 2 Local Government regions and 2 Welsh Regional Police forces. 89 contracts were awarded, valued at over €7.37m. The policy has meant 50% of winners are Welsh businesses, securing nearly €3.4m value in contracts.

Determining the intervention rates was a challenge. By offering 100% to public sector bodies in call 1,proved the concept, then in the following calls the rate was 80% then falling to 30-60% with support to help find the gap funding. Awareness raising for procurement professionals also needed.

SBRI Catalyst presents a policy evaluation which can deliver great potential for learning as it promotes the development of innovative products and services and it shows the importance and need for collaboration between public sector and enterprises to promote R & D. This allows the transference of knowledge and expertise among different entities.
It also generates solid business opportunities for SMEs and entrepreneurs, being a key factor in the economic growth of a region. They can develop solutions that can be sold in other markets.
Given the characteristics of this initiative, other regions can observe the impact of the initiative and the commitment of the Welsh Government to foster innovation. In this way, SBRI has great potential to be transferred to other European regions. For example, SBRI has now been copied by Scotland, Northern Ireland, Republic of Ireland and UK Governments that have launched ‘GovTech’ – a €22.7m SBRI programme focussed on digital challenges