Public Procurement Policies to Foster Innovation Development

Abstract

Government and public sector demand from the perspective of demand-push policies as a tool of technology and innovation policy have been discussed in detail in the literature. Policymakers have always considered advantages such as promoting local production goals, reducing imports and dependence upon foreign countries, and meeting domestic needs with technology development and innovation. In Iran such policies have been designed and implemented and can be classified into two categories: horizontal and vertical policies. Horizontal policies refer to policy programs that regulate the general government market and the public sector. In vertical policies, however, government demand in a particular product area is regulated. In order to analyze the different types of application of these policies in Iran, several cases of horizontal and vertical policies have been studied and compared in this article. From the horizontal policies, the law of maximum use of domestic power and Foreign Finance Credit have been selected. Among the vertical policies, the policy of 10 basic oil products and the experience of the Iran-Lab-Expo have been examined. Attempts have been made to analyze and compare the above policies  based on the general pattern of government programs to stimulate government demand for technology and innovation. Finally, the lessons learned from Iran’s policy experiences in the field of public sector demand orientation as a tool of technology and innovation policy are described.