Innovation Procurement is a new form of non-dilutive funding – an opportunity for innovative SMEs
Innovation Procurement – the background
Innovation procurement is a key focus of the Procurement Act 2023, which came into effect on February 24th 2025, aiming to leverage public sector spending to drive new market solutions. With financial pressures and urgent challenges in areas like climate change, transport, and housing, the need for procurement-driven innovation has never been greater.
The UK government has reinforced this priority through the National Procurement Policy Statement and the updated Social Value Model, ensuring procurement aligns with broader policy goals.
How Procurement Fuels Innovation
The UK public sector spends over £380bn annually with private suppliers, and advances in technology, AI, and sustainability present opportunities to optimise this budget. Through proactive engagement with start-ups, SMEs, and corporate innovators, the government can use its purchasing power to shape markets and drive economic growth.
Key Features of the new Procurement Act
The new Act introduces several mechanisms to make procurement more efficient, transparent, and innovation-friendly:
- Competitive Flexible Procedure – Allows a multi-stage process where R&D and scaling can occur within a single procurement cycle, fostering collaboration and new technology adoption.
- Pre-market Engagement – Encourages early market consultations to refine solutions before tendering, ensuring fair competition and increasing supplier participation.
- Central Digital Platform – A Find a Tender Service digital platform to simplify procurement processes and open opportunities for SMEs and start-ups.
- Most Advantageous Tender – Moves beyond lowest-cost criteria to consider quality, social value, and environmental impact, encouraging innovative solutions.
- Transparency & Open Frameworks – Large public bodies must publish procurement pipelines, allowing suppliers to anticipate upcoming opportunities and align their innovations accordingly.
Essentially, innovation procurement is like a government-backed ‘Shark Tank’ for cutting-edge solutions – where public sector buyers invest in pioneering ideas from SMEs and start-ups, not with equity, but with real contracts that fund development and drive market adoption.
Venturenomix and Innovation Procurement
Our team has been working in the field of innovation procurement, tendering and grant writing for over 20 years. This initiative is common in the European Funding landscape where we have been supporting clients (private and public) secure funding and design procurement calls. In 2024 we secured £1m in Contracts for Innovation for two of our UK based clients in the Health-tech sector.
Summing Up
By embracing new procurement approaches, engaging with innovators, and leveraging the opportunities created by the Procurement Act 2023, organisations can unlock significant value. Now is the time for public agencies, businesses, and innovators to work together to shape a more efficient, transparent, and impactful procurement landscape.
Want to learn more about how innovation procurement can benefit your organisation? Get in touch today to explore how you can seize new opportunities and drive meaningful change.
Oliver Cressall
I help clients unlock their funding potential by providing expert support on R&D grant applications across the UK and EU, driving impactful results. I deliver tailored guidance in grant funding, marketing, operations, and strategic growth.
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