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This is how circular procurement can drive innovation

Public procurement is one of the fastest ways to steer Sweden towards a more circular economy. Better research and prompt feedback between purchasers and suppliers are two crucial factors in boosting the procurement process and really driving innovation.

For there are no major legal problems. Emanuela Vanacore, a researcher at RISE in circular economy, says that certain grey areas in the Swedish Public Procurement Act (LoU) could be clarified to support sustainability.

– “So that it’s easier to switch to buying services instead of goods and get away from the linear cycle where you have procurement of newly manufactured goods every four years,” she says.

– “But in essence, LoU does not put any obstacles in the way.” The lessons come from the Proceed project, where RISE together with a number of larger municipalities* studied how procurements can be used to promote circularity.

Large part of GDP

In the EU, public procurement accounts for an average of 14 percent of the GDP, in Sweden about 18 percent. It would be an understatement to say that transforming this gigantic purchasing market into circular solutions is highly prioritised.

– “The public sector is typically a big spender,” says Emanuela Vanacore. “Municipalities, regions and government agencies of various kinds play an enormous role in any economy. It is important that the general public understands how this steers demand.”

If you want to promote circularity, this is the time to give the market a chance for innovation

More time is needed for research

There are a number of factors that come into play in a procurement process. Internal routines affect how departments and units are managed, how they interact, how information is shared, whether there is a common view of how goods and services are to be used sustainably and so forth. External factors deal with how the market works and communicates.

But what Emanuela Vanacore sees as absolutely crucial is what should happen first in a procurement.

– “As a public sector procurer, you need to spend more time and energy on research. Conduct an internal and thorough needs analysis which you then present to the market. Have far-reaching and open dialogue, call for and request information so that you can make truly informed decisions.”

It’s about having an in-depth understanding of what is available. Understand the properties, understand the peculiarities.

– “If you want to promote circularity, this is the time to give the market a chance for innovation. To develop solutions that may not even presently exist.

– “The knowledge that there is a better and possibly circular product within reach also enables you to develop and refine your tender requests,” Emanuela Vanacore explains.

Change requires collaboration between businesses and the public sector

Because if society is serious about truly changing the public sector's purchasing processes, a new form of collaboration is needed between the public sector and the business community. In practice – open and straightforward business relationships.

– “What needs to be created or improved is a solid feedback loop with dialogue with the companies,” says Emanuela Vanacore. An ongoing dialogue which is subsequently evaluated. What became more circular? How have we measured circularity? Did we reach the set goals?”.

Evaluation serves as feedback to suppliers and as incentives to continue work with innovation. The logic is that when a public sector procurer moves towards sustainable solutions, it can encourage green and circular innovations on the part of the suppliers.

– “An advantage for a company that wins a procurement and becomes a supplier is that it in one fell swoop, it affects thee entire subcontracting chain of that company. No company operates in isolation. In this way, you reach level 1, level 2, level 3 and so on,” Emanuela Vanacore concludes.

*Helsingborg, Jönköping, Luleå and Växjö, and RISE Purchasing

Emanuela Vanacore

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