Procurement for Innovation: Developing a Framework for Continuous Innovation Diffusion and Knowledge Transfer through Integrative Procurement Systems

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New technologies and novel ways of managing processes effectively and efficiently in new situations or environments come under the umbrella of innovations. The adoption of these innovations is proving challenging under existing contractual arrangements for various reasons. These include the adversarial relations between participants in some industries, e.g. construction; complex contractual relationships that hinder natural progression of innovations between parties involved, e.g. traditional contracting arrangements; and the fragmentation, instability and disintegration of procedures used in the organisation of a supply chain.A number of attempts have been made to drive through the adoption of innovation in the health service through its ProCure21 programme and also in the defence sector through its SMART Procurement initiative. Both approaches are based on the thinking that innovation adoption could be achieved through the use of partnering. However, more work needs to be conducted to develop a proactive, systematic and structured approach for the range of Integrated Procurement Systems (IPS) available which would also incorporate performance measures in the form of critical success factors and key performance indicators.Integrated procurement approaches such as PPP, PFI and prime contracting have the potential to overcome the problems of fragmentation in project delivery which are prime barriers to effective knowledge sharing and flow of new technologies and ideas in project environments. These types of integrated supply chains have the prospect of benefiting industry by encouraging competition primarily on the basis of expertise innovation in processes and products rather than on the basis of short-term cost efficiency only as it has been the case through traditional procurement systems.To overcome the problems identified above, this research proposes a framework with a capacity to develop, absorb and exploit knowledge to enable continuous innovation diffusion within and between projects by evaluating the effectiveness of integrative procurement systems. The proposed research seeks to establish performance measures and success factors for innovation and knowledge sharing in projects' environments. Furthermore, it intends to analyse and investigate communication channels within supply chains to enable the flow of knowledge and the adoption of innovations.