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Anchoring the innovation impacts of public procurementto place: the role of conversationsDOI:10.1177/2399654417694620

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Citation for published version (APA):Uyarra, E., Flanagan, K., Magro, E., & Zabala-Iturriagagoitia, J. M. (2017). Anchoring the innovation impacts ofpublic procurement to place: the role of conversations. Environment and Planning C: Politics and Space.https://doi.org/10.1177/2399654417694620

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Anchoring the innovation impacts of public procurement to place: the role of conversations Author accepted manuscript - accepted for publication (27/01/17) in Environment and Planning C: Politics and Space ElviraUyarraa*,KieronFlanagana,EdurneMagrob,c,JonMikelZabala-IturriagagoitiacaManchesterInstituteofInnovationResearch,AllianceManchesterBusinessSchool,UniversityofManchester(UnitedKingdom)

bOrkestra-BasqueInstituteofCompetitiveness,UniversityofDeusto,Donostia-SanSebastian(Spain)

cDeustoBusinessSchool,UniversityofDeusto,Donostia-SanSebastian(Spain)

*Correspondingauthor:Elvira.Uyarra@manchester.ac.uk

AbstractPublicprocurementisfrequentlytoutedasameansofpromotinginnovationatthesub-nationallevel,buttheunderlyingmechanismsthroughwhichthisissupposedtoworkareseldomarticulated. Inparticular,while therelevanceofsocial interactionfor innovation is offered as a key rationale for the use of public procurement forinnovation (PPI), there is little discussion of its corresponding spatial dimensions.Thispapercontributestothisdebatebyadvancingourunderstandingofthespatialaspects of PPI and thus of the scope for using public procurement to achieveregional innovationpolicygoals.Weconnect thePPI literaturewith the literaturesoninnovation-drivenregionaldevelopmentaroundthenotionof‘conversations’tocapturethespatialandsocialaspectsofinteractionsrelevantforPPI.Differentformsof spatial anchoring of procurement, presenting different challenges andopportunities for regions, are explored.We provide illustrative examples for eachtype, fromwhich implications are derived for promoting place-based ‘innovation-friendly’procurement.Keywords: Public procurement, innovation, anchoring; place-based economicdevelopment.1.-IntroductionWith an estimated average contribution of around 15% to national GDP in OECDcountries(OECD,2015),publicprocurementhasattractedsubstantialattentionasapotential lever to promote innovation-driven economic development and socialwelfare(Aho,2006;Edleretal.,2006;EdlerandGeorghiou,2007).Interestin‘publicprocurement for innovation’ (PPI)hasalsobeendrivenbygrowingdisillusionmentwiththeabilityoftraditional,supplysideinterventionstopromoteinnovationandaconsequentshiftininteresttowardsthepotentialforso-calleddemandsidepoliciesthatshapetheconditionsfortheuptakeofanddiffusionof innovations(EdlerandGeorghiou, 2007). In addition, the financial crisis has brought with it significantbudgetpressuresfortraditionalresource-basedinstrumentsandarenewedinterestinchallengeormission-orientedpoliciesandtargetedindustrialpolicies.

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A growing literature has laid out the rationales for using public procurement topromote innovation, assessing its impacts as well as identifying the underlyingpracticesandbarriersassociatedwiththeireffectiveimplementation(AschhoffandSofka,2009;EdlerandGeorghiou,2007;Georghiouetal.2014;Edquistetal.,2015;Edquist and Zabala-Iturriagagoitia, 2012; Rolfstam, 2013; Uyarra et al., 2014).Howeverthegeographicaldimensionofthesepracticesisseldomdiscussed.Thereisalimitedunderstandingofwhatpublicprocurementcanachieveatmultiplelevelsofgovernment (Pickernell et al., 2011), and the potential role (if any) that publicprocurementcanhave in localand regional competitiveness (Lemberetal.,2011).Sub-national levels typicallyhavekeybudgetaryanddecision-making responsibilityfortheprovisionofpublicservices,yettheyareseenaslackingthescale,capabilitiesand resources todrive innovation throughpublicprocurement (seee.g. Lemberetal.,2011;Pickernelletal.,2011;FerreiradaCruzetal.,2013).Inthispaperwewillarguethatthereisasymbioticrelationshipbetweeninnovationand place that is often overlooked in the literature on PPI.Whilewe concurwithChicotandBleda’s(2016)argumentthatpublicprocurementcanbeusedtoaddressa problemof coordination and growth ofmultiple kinds of knowledge in order tofacilitateinnovationandthedevelopmentofmarkets,missinginsuchdiscussionsistherolethatspaceanddistancehaveinshapingthoseknowledgeinteractions.Weconsiderthat innovationcannotbeunderstood independentlyofspace;rather it issocially constructed through conversations that are often spatially bound andshapedbyplace-basedneeds.ThispaperdrawsfromtheliteratureonPPIandonpublic-privatepartnershipsmoregenerallyandderivesinsightsfromrelationalviewsofknowledgeandthe‘territorialknowledgedynamics’ literature(CrevoisierandJeannerat,2009;Rutten,2016;Binzet al., 2014) as well as from the product development and strategy literature,particularly the work of Lester and Piore (2004) on the role of ‘conversations’shapingsuccessfulinnovations.Weusethisideaof‘conversations’astheconceptualbuildingblockofamorespatiallysensitiveapproachtoPPIandproposeananalyticalframework to explore the multiple geographies of such conversations, and theopportunities and trade-offs associated with ‘anchoring’ procurement to supportplace-based innovation driven advantage. Using empirical examples from theliterature as illustrations, we explore the ways and contexts in which publicprocurementmightbeusedtoadvanceregionaldevelopmentgoals. Thisisimportantnotonlybecausetheliteraturehasthusfarneglectedtheterritorialdimensions of PPI but also given the spatial footprint and potential impact thatpublic procurement has on local economies. Given their budgetary and decision-makingresponsibilityovermanypublicservices,citiesandregionscanplayakeyroleinthedevelopmentofnovelsolutionstosocietalneeds.Itisalsoimportantatatimewhenplace-basedapproachestoinnovationandindustrialpolicyarehighlightingtheimportance of processes at the sub-national scale shaping the production anddisseminationofknowledge for innovation (Barcaetal.,2012;HildrethandBailey,2014;Pecketal.,2013).ThisthinkinghasheavilyinfluencedpolicyattheEuropeanlevel,most recently in the form of the ‘Smart Specialisation’ strategies (European

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Commission,2012;McCannandOrtega-Argilés,2015).TheguidancedocumentsonSmart Specialisation (European Commission, 2012) actually include publicprocurementaspartoftherecommendedregionalinnovationinstrumentmix.Howitistobeused,however,remainslargelyunarticulated.Thepurposeofthispaperisthereforeto imbuesomeplacesensitivity intothedebateofPPI,byexploringhowdistance and space dynamics shape the development of knowledge underpinningsuchinnovations.The paper is structured as follows: Section 2 provides a brief overview of theliterature on PPI, highlighting a relative neglect of geography and place dynamics.Section3bringsthesocialandspatialnatureofinnovationtogetheraroundtheideaof‘conversations’,thegeographicaldimensionsofwhicharedescribedinsection4.Section 5 takes this discussion forward to explore the various ways procurementmay be ‘anchored’ to place, and the tensions and challenges thatmay arise fromthem.Section6providesadiscussionanddrawssomeconclusions.2.-Publicprocurementandinnovation.AmissinggeographicaldimensionThe last decade or so has seen a renewed interest in the potential of publicprocurement to stimulatebusiness innovationandaccelerate thediffusionofnewtechnologies(EdlerandGeorghiou,2007;Pickernelletal.,2011).Theliteraturehasactively engaged with definitional issues and typologies around what preciselyconstitutes PPI, in an effort to better conceptualize and categorise PPI relatedinterventions(e.g.EdlerandGeorghiou,2007;HommenandRolfstam,2009;UyarraandFlanagan,2010;EdquistandZabala-Iturriagagoitia,2012). Inadditionempiricalstudieshaveexploredthe impactsofprocurementon innovationperformanceandidentifiedkeydrivers,barriersandprocessesassociatedwithitsuseasaninnovationpolicyinstrument(e.g.AschhoffandSofka,W.,Edquistetal.,2000,2015;Lemberetal.,2013;Uyarraetal.,2014;Rolfstam,2013,2015).Usingpublic procurement to spur innovationhasbeen justifiedon thebasis of itscapacityto:createnewmarketsforproductsandtechnologies; ‘pull’ innovationbyreducingmarketandtechnologicalrisk for innovators;overcome‘systemicfailures’byconnectingusersandsuppliers;provideatestinggroundforinnovativeproducts;and contribute to addressing societal challenges (Edler and Georghiou, 2007;Geroski, 1990; Rothwell, 1984). However discussions of the rationales associatedwith theuseof PPI largely relate tonational or sectoral policies (often large scalemission-orientedpolicies).Lessattentionhasbeenpaidtothespatialandmulti-leveldimensionsofsuchrationales.CitiesandsmallstatesareseenaslesswellplacedtocontributetoPPIbyvirtueofthelimitedscaleoftheirpurchasingpower(Georghiouetal.,2010;Lemberetal.,2011).Ontheotherhand,smallnesshasalsobeenseenasmakingforamoreattractivetestinggroundfornovelsolutionsandexperimentation(Morgan and Henderson, 2002; Dale-Clough, 2015; Hodson and Marvin, 2010;Lemberetal.,2015;UyarraandGee,2013).Finally,knowledgeasymmetries,suchasthosebetweensuppliersandprocurersorotherendusers,arekeyrationalesfortheuseofprocurement(FerreiradaCruzetal.,2013).Theregionalinnovationliteraturehas long emphasized the role of geographical proximity as enabler of knowledge

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interactions(Boschma,2005;HealyandMorgan,2012).However,thePPIliteraturehaspaidlittleattentiontothespatialdimensionsofuserproducerinteractions.ConceptualdebateshaverevolvedaroundthedefinitionofPPIandthedichotomousdistinction between ‘regular’ and ‘innovative’ procurement (Edquist and Zabala-Iturriagagoitia,2012).TheliteraturetendstoassociatePPIwithdeliberateattemptsto achieve innovation (understood as the development of novel products andservices). Some authors also consider procurement-related decisions that result ininnovation, as a by-product of normal procurement processes. This is importantparticularlyatthesub-nationallevel,wheninnovationislesslikelytobetheresultofa coherent or deliberate policy but rather occur as side effect of ‘every day’procurement activities trying to achieve other goals (Lember et al., 2011).Acknowledging that procurement affects innovation regardless of whether publicprocurement isexplicitlyoriented towards innovationornot,UyarraandFlanagan(2010) andKnutssonandThomasson (2014) suggest the term ‘innovation friendly’procurement,thatistheuseofpracticesandcompetencesingeneralprocurementthatensurethatinnovativesolutionsarenotexcludedorundulydisadvantaged.Public procurement has been further categorized depending on what is beingprocured,forwhomandhow.Forinstanceakeydistinctioniswhethertheprocuringorganizationistheenduserofthegoodandservice(directprocurement)orwhetheritseekstoaddresstheneedsofothers(catalyticprocurement)(EdlerandGeorghiou2007; Hommen and Rolfstam 2009). Uyarra and Flanagan (2010) note thatprocurementcanvaryintermsofthetechnicalsophisticationorstandardisationofdemandandsuggesta typologybasedon thedegreeof localoruser specificityofthe product/service procured and the knowledge requirements for its provision.Publicprocurerscanthusinfluencethedegreetowhichdemandismorededicatedorgeneric,ormoreorlessstandardisedorspecialised.A furtherdefinitional issuehasrevolvedaroundthetypesof innovationassociatedwith PPI. Early approaches (e.g. Edquist et al., 2000) have been criticised foradoptinganimplicitfocusonradicalproductinnovations,neglectingotherformsofinnovation including service (Pelkonen and Valovirta, 2015), process (Yeow et al.,2015)and system innovations (GeeandUyarra,2013)aswell as thediffusionandadoptionof innovations(UyarraandFlanagan,2010).EdlerandYeow(2015)arguethat procurement can enable solutions that do not exist (triggering demand) orwhich exist in the marketplace but are new for the organization (responsivedemand). Rolfstam (2013: 1) defines PPI as “purchasing activities carried out bypublic agencies that lead to innovation”, where innovation is understood broadly(i.e.astheintroductionofanewgood,anewmethodofproduction,theopeningupofanewmarket,ortheuseofanewsourceofsupplyofrawmaterialsornewwaysoforganising industries).Adoptingabroaddefinition isvital, sincemostofwhat isactually procured by the public sector, particularly at the local level, is services.Empirical studies show that public procurement drives services innovation morethan it does product innovation (Edler et al., 2011). Indeed, much procurementrelatedinnovationatthelocalandregionallevelisincrementalandofaresponsivenatureratherthanradical(Lemberetal.,2011).

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Lember et al (2015: 412) note a prescriptive bias inmuchof the literature on PPItowards“whatkindofPPIinstrumentsandmeasuresgovernmentsshoulduseratherthan explaining what policy and public administration institutional set-upmake itpossible to use these various PPI instruments andmeasures”. Less attention, theyargue,isgiventothewidersystemicsourcesofcapacity.Indeedanumberofstudies(Edelenbos and Teisman, 2008; Edler et al., 2015; Rolfstam, 2013; Uyarra et al.,2014; Edquist et al., 2015; Edler and Yeow, 2016) have pointed to institutional,governance and capability related obstacles to the implementation of PPI. Theseinclude institutional challenges such as decentralized or ‘silo’ budgets, lack of asystemic view or internal coordination (between the internal end user or thoseresponsible to deliver the service, and the procurers) and capacity and resourceconstraintsincontractingauthorities.Theseimpedimentsdifferfromplacetoplaceandatdifferentlevelsofgovernment(Pickernell et al., 2011). Cities and regions (or small states) often lack sufficientadministrative and financial capacities to undertake PPI, and are more likely todependonnation-state level regulation and financing, and tobeexposed to rent-seeking and other corrupt practices (Dale-Clough, 2015; Georghiou et al., 2010;Lember et al., 2011). Institutional contexts mediating these processes and thepresence (or absence) of trust and social capital thus tend to be regionallycontingent(HealyandMorgan,2012).Public procurement is already a multi-objective policy simultaneously pursuingeconomic, social and environmental goals, as well as improving transparency andcost efficiency. The additional goal of innovation adds yet another layer ofcomplexity thus leading to potential goal conflicts and trade-offs (Edelenbos andTeisman,2008).Policiesandpractices inspiredbynew rationalesareadopted inalandscapeconditionedbyoldones,andarethusconstrainedbyinstitutionalinertiaandpathdependencies,whichleadstodifferentiateduptakeandorientationofsuchpolicies indifferentplacesandatdifferenttimes(Dale-Clough,2015;Laranjaetal.,2008; Lember et al., 2015). Public procurement policy is therefore a mixture ofdifferentpolicy legacieswhichwill inturnmanifestdifferentlyatdifferent levelsofgovernment, and as any other policy tool, it is context specific and dependent onmulti-levelgovernancearrangements(HowlettandRayner,2007).Atthelocallevelmultiple agendasmay coalesce as a result of policy layering over time, creating apotentialproblemof legitimacyaroundwhichpolicygoaltoprioritise.Pickernelletal. (2011) suggest that the objectives of innovation and regional economicdevelopmentinlocalprocurementaremutuallyconflicting.Incontrast,Lemberetal.(2011) found that many Nordic-Baltic Sea cities boosted innovation when usingprocurement to pursue other social and environmental policy aims. Policy conflictmay, according to Lowe and Feldman (2015), motivate a creative search for newsolutions (and resources) that bring together multiple players and perspectivestowards a commonground.Cities and regions canprovide thearenawhere thoseproblems and solutions are framed andwhere policy tensionsmay be negotiatedand creatively resolved. Finally, they are home to so-called ‘anchor organizations’(CLES,2015b;Ehlenz,2015;ICIC,2011),namelylocalauthorities,universities,further

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education colleges, hospitals, and housing organizations and other organisationswhonaturallyhavestake inaplaceandthusacommitmenttousetheirresourcesandinfluencetoidentifyandservebothanchorandcommunityneeds(RobertsandSiemiatycki,2015).Inconclusion,severalrationalesjustifytheneedforadoptingamorecarefulspatialconsideration when studying public procurement. First, a considerable share ofpublic procurement is undertaken at subnational levels (Peck and Cabras, 2008).AccordingtotheOECD(2015),governmentprocurementatregionalandlocallevelsaccountsfor,onaverage,30%ofallpublicprocurementinmembercountries,risingto47%inSwedenand62%and68%inDenmarkandCanadarespectively.Second,localprocurementspending tends tobeofadifferentnatureandmix,oftenmoreoriented towards services (Pelkonen and Valovirta, 2015) and closer or moreadapted to enduser needs in relation todomains such as transport, educationorpersonalservices.Thisdifferentprofileisalsolikelytoraisedifferentquestionsandconsiderations about the nature of and potential for innovation. Third, cities andlocalities can become focal points for developing novel solutions, as spaces ofconnectionbetween leadusersand innovators thatcanhelpaddresschallengesofboth local and even eventually global relevance (Dale-Clough, 2015). Fourth, theinstitutionalcontextor‘milieu’(CrevoisierandJeannerat,2009;HealyandMorgan,2012) greatly impacts the ability to conduct such processes. There is thus a cleargeographicalstickinesstopublicprocurement,sinceitbothshapesandisshapedbyactorsthatarestronglyconnectedtoaplace.3.InnovationasconversationalspacesIn order to convey the social and spatial nature of interactions underpinning thedevelopmentof innovativesolutionsthroughprocurement,weadoptthenotionof‘conversations’, (Lester and Piore, 2004), exploring their multiple geographies(Rutten, 2016) and the opportunities for ‘anchoring’ them to a particular place toadvance regional development goals (Lowe and Feldman, 2008). Implicit in thismetaphor is the ideaofknowledgecreationas sociallyembeddedwithin specialistcommunitiesofpracticeandwithinparticularplaces.Adoptingthisapproachallowsustoexplorethespatialdimensionsofsuch‘conversations’inamuchmorenuancedwaythathasbeenthecaseintheliterature.The literature on territorial innovation models has highlighted the importance ofgeographicalproximity forknowledgesharingand innovation (MoulaertandSekia,2003).Sincemuchknowledgehasanirreducibletacitdimension,knowledgesharingissubjecttoadistancedecayeffect,proximitymaximizingthelikelihoodoflearningand knowledge spillovers. However this has led to a polarised tacit/local andcodified/global dichotomy which tends to overstate the importance of localknowledgeinteractionsortherelevanceofdistantknowledge(Batheltetal.,2004;Bunnell and Coe, 2001; Lagendijk, 2002; Oinas and Malecki, 2002) rather thanreflecting“theactualworkingsofknowledgeproductionand innovation” (Malecki,2014:378).

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Relational views of knowledge, in contrast, consider ‘knowing’ as involving “manygeographiesoforganizationandsocialinteraction”(AminandRoberts,2008:365).Ithasbeenargued thatknowledge reliesonspatialbutalsootherproximities for itstransmission, such as cognitive, organizational, social and institutional proximities(Boschma, 2005). However, according to Rutten (2016) the ‘proximities’ literaturefallsshortofaddressingthesocio-spatialdynamicsofknowledgecreation,foritseesthe different forms of proximity as if they were static relational states that areavailable separately, when in reality they are constructed simultaneously throughsocial interaction. Knowledgehappensinsocialspaces,aidedandabettedbytrustand often enabled by certain institutional settings (Amin and Thrift, 1995). Thesociallyembeddednatureofknowledgecreationcannotbedisconnected fromthedynamicsofpersonalnetworksandcommunitiesofpractice(Wenger,1998).Rutten (2016) suggests that thenotionof ‘conversation’ captures the socio-spatialdimensionofknowledgecreationbetterthanthe ‘proximity’metaphor.Hedefinesconversationsasformsofknowledgecreationthatareintentionalandon-going,asopposedtoincidentalandserendipitous.ThisintentionalityisalsoimplicitinLiedtkaandRosenblun’s(1996:148)useof‘strategicconversations’asmetaphortodescribetheshapingofstrategic intent, for“it is throughconversationthatwecometoco-createthesharedmeaningbehindthestrategy”.Theyarguethatit isthroughsuchinteractions that problems are framed, choices get made and the rationalesunderpinningthemdeveloped.Conversationsarehenceunderstoodasameansforcreating “collaborative advantage” (Roberts and Siemiatycki, 2015: 781), as thesecan promote synergies, enhance overall results and produce efficiency gains(FerreiradaCruzetal.,2013).Intheirstudyonnewproductdevelopmentprojectswithinorganisations,LesterandPiore (2004) describe the development of innovations as socially defined andconstructed in conversations “amongpeople fromdifferent backgrounds andwithdifferent perspectives” (p.51). They define conversations as fluid, open-ended andinterpretativeformsofinteraction,incontrastwithmore‘analytical’approachestoproduct development, better suited for products that “are already well defined”(p.54).Asinterpretativedevices,theyargue,conversationsareoftenpunctuatedbymisunderstandings or ambiguities, since even the vocabulary to describe the newproductmaybe lacking,but it is thisambiguity thatgenerates ‘productive friction’(Stark, 2011) and is thus the key resource out of which the ideas emerge.Conversations thus allow the achievement of certain results that could not havebeenrealizedintheirabsence.ThinkingaboutconversationsissimilarlyusefulinthecontextofPPI,since,asEdlerand Yeow (2016: 415) note, “markets for innovation are – by definition – notestablished, needs are often novel and […] the business case of new solutionsoffered to organisations is ill-defined at best”. Public procurement proceeds instages,startingfromtheidentificationanddefinitionofneeds,theirtranslationintofunctional specifications,andprogressing to the tenderingprocess, contractawardanddelivery. It is intheneedsdefinitionstagesoftheprocurementprocesswheremarket and user interaction ismore likely to enable a novel solution (OGC 2004;

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Uyarraetal.2014;EdlerandYeow2016).Inthis‘interpretativephase’problemsareshaped and needs articulated, and organizations benefit the most from externalideas. Later stages takeonmoreanalytical,problem-solvingapproach toawardingand delivering the contracts in the clearest, most transparent and most cost-effective way possible, according to the rules and directives governing publicprocurement (which tend to impose strong restrictions for user-producerinteraction). The successful implementation of conversations thus requiresstakeholder commitment, participation, mutual interaction, joint processes ofproblem and solution definition, emergence of consensus, and agreement ondecisionsprior toandduring theexecutionofprocurementprocesses.This in turncalls for “reciprocity, interdependence and complementary strategic interests”betweenstakeholders(RobertsandSiemiatycki,2015:790).LesterandPiore(2004)arguethatintheearlyinterpretativestagesofinnovationtheroleofthe‘manager’isnottodefineclearspecificationsbuttoremovethebarrierspreventing conversations from taking place (e.g. between producers andconsumers). They use the metaphor of hosting a cocktail party, where the hostneeds to choose the guests, initiate the conversation, keep it going and refresh itwith new ideas. They note the importance of conversations during the process ofsetting up regulations, given the interconnectedness of infrastructure andproductdevelopment(forinstanceinmobilecommunications,whereconsumerdevicesmustwork with various kinds of telephony and internet infrastructure in order to beuseful),andtheneedtounderstandandanticipatehowtechnologicaldevelopmentswouldevolveunderagivenregulatoryregime.LoweandFeldman (2008)alsoadoptaviewof the regulatoryprocessasa sharedconversational space to analyse how two different regions (Cambridge, MA, andBerkeley, CA) presented different regulatory responses to the same biosafetyordinances.Ratherthanconsideringregulationasamoreorlessrigidconstraintformarketandactorbehaviour,theyviewitasacomplexrelationaldynamicinfluencedby social and political processes, which would yield different local responses toregulatory interventions. In Cambridge, unlike in Berkeley, conversational spacesinvolving politicians, community activists, industry and ordinary citizens benefitedemerging local industry by converting uncertainty into calculable risks, favouringstandardsandprovidinglegitimacyfortheemergingtechnology.LoweandFeldman(2008) conclude that successfully ‘anchored’ conversational spaces and adaptivegovernanceprocessescontributedtoenhancingplace-specificinnovativeadvantage(seealsoFerreiradaCruzetal.,2013).Conversationalspacesmaythusbemoreorlessanchoredinaparticularplace.Theidea of anchoringmobile knowledge and investment to place is not new but hasrecentlycapturedmuch interest in recenteconomicgeographydebates.Markusen(1996) early on discussed how regions should make themselves more ’sticky’ in‘slippery spaces’ by anchoring and upgrading income-generating activities. ForCrevoisier and Jeannerat (2009), knowledge develops in several stages namelygeneration,usecirculationandanchoring.Anchoringistheothersideofknowledgemobilityandreferstothewayinwhichthisnewknowledgeinteracts—ordoesnot

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interact—withitsnewcontext(seealsoValeandCarvalho,2013).Binzetal.(2016:182) adopt a more strategic view of anchoring as “an interactive process whereregional actorsmobilizeknowledge,markets, legitimacy, and financial investment”tomakethemmorelocallysticky.However,thefocusisnormallyonthesupplysideand anchor actors such as large firms, which remain “anchored in the regions ...[whilst] also embedded in relationships external to the region, with customers,competitorsandsuppliers”‖(Markusen,1994:483).Lessattentionhasbeenpaidtotheactiverolethatthepublicsector,throughitspurchasingdecisions,mayhaveinshaping regional economies; and generally to the demand side and creation ofmarkets (Morgan,2013).Whilstasalreadynoted there isagrowing recognitionofthe role that (public sector) anchor institutions such as universities, hospitals, andlocalauthoritiescanplay incontributing toplacebased innovation, thishashardlybeen incorporated into the debates around knowledge anchoring in economicgeographydebates.4.-ProcurementasgeographicallyanchoredconversationsThe different geographical dynamics of procurement conversations can bearticulated following Rutten (2016), who argues that different forms of anchoringwouldemergedependingonthecontentofconversationsandhowtheyareaffectedby place and distance dynamics (see also Crevoisier and Jeannerat, 2009). Thegeographicalanchoringofprocurement,andtheassociatedtrade-offsandtensions,can be similarly articulated around these dimensions. First, place dynamics reflecttheextenttowhichtheprocurementisshapedbylocalplacequalities,includingtheknowledgebasesandexpertiseoffirmsandtheknowledgecommunityat large,aswellasothercharacteristicsofplacesuchascultureandthedemandsophisticationof users. The seconddimension, distance dynamics, takes account ofwhether theconversationsinformingthedefinitionofneedsandthedesignoftheprocurementprocess are reflective of specific economic, social and environmental needs of alocation,orconverselywhethertheyaddressneedsandchallengesthatarecommontoothersettings(bridgingdistance).Bothdimensionsareintimatelyintertwinedandmutuallyreinforcing,butforthesakeofclarityareherepresentedseparately.Thecombinationofthesedimensionsleadsustotheconsiderationoffourpossiblescenarios (Rutten, 2016) with different challenges and trade-offs (Fig. 1). Forinstancemulti-local anchoredconversationsare linked to,or relevant for,multipleplaces (Crevoisier and Jeannerat 2009) but are also shaped by local qualities,including research facilities and knowledge bases of local firms. The problemmaynotbespecifictoonelocation,butlinkedtoacommonproblemsharedbyothers—for instance problems common to several places, such as street lighting or publictransportation systems—and the solution is connected to local and globalknowledge.Single local anchored conversations benefit from local place qualities, but presentweakdistancedynamics.Placebasedassetscontribute to theseconversationsandeventually to the development of more innovative solutions to problems. Weakdistancedynamics implythattheseproblemsandchallengesmaybeeitherunique

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to a location, such as that others may be less well placed to contribute to thesolutionandthuslessattractedtotheconversation,orframedtoonarrowlysothattheir applicationbeyond solving a one-off or specific problemmaybe limited. ForinstancethecomplexprocurementofanavigablestormsurgebarrierdescribedbyWesseling and Edquist (2016) addresses user and societal needs that are ratherunique and relevant to very few places beyond theNetherlands (see also Rutten,2016).Geographically dispersed conversations, on the other hand, have weak placedynamics and strong distance dynamics. They are associated with a common,possibly well-known and clearly articulated and standardized, need or challenge.Individualsfrommanyplacesengageinthembuttheyarenotespeciallyshapedbynor do they shape local assets and amenities. They are not locally anchored butrather footloose. Examples could include services that are highly modular andstandardized, such as IT, where local knowledge assets are disconnected or notrelevanttotheseinvestments,thusinvestmentsofferlittleopportunitiesformutuallearning from the part of the supplier and the environment (Crevoisier andJeannerat,2009).Finally,geographicallyconcentratedconversationsarespecifictolocalproblemsandchallengesnotimmediatelyrelevantforordependentonpeopleinotherplacesandat the same time unconnected to the local knowledge base. For instance thecommissioning of certain social services or highly specified projects such asparticular constructionprojectsmay involve conversations around local needs andchallenges, as well as about socioeconomic and environmental objectives (e.g.EdelenbosandTeisman,2008),butdonotdependonorbenefitfromthequalityoftheknowledgebasewhichmakesthoseconversationsfootloose(Rutten,2016).The four scenarios above are not intended as static categories in a prescriptivetypologyasshowninfig.1.Rathertheyareofferedasastartingpointfromwhichtohighlight the possible uncertainties and trade-offs associatedwith different policychoices, such as those between short-term efficiency gains and longer term (i.e.innovation)goals(Lemberetal.,2015),orbetweenlocalexperimentationandlargescalemarketcreation(UyarraandFlanagan,2010;MorganandSonnino,2013).Justas Lester and Piore (2004) show that managers may influence conversations byinfluencing what actors talk about and with whom, and the breath of suchconversations, sopublic procurers can steer conversations to shape thedegree towhichdemand ismoreor lessanchored toplace.This followson fromUyarraandFlanagan’s(2010)argumentthatprocurementcanbemorededicatedorgeneric,ormoreorlessstandardizedorspecializedbyforinstanceallowingdialoguewithusersand potential suppliers, broadening or restricting participation, aggregating ordividingcontracts,allowingvarietyintechnicalsolutionanddemandingnewormorecomplexrequirements,orgreaterqualitystandards.5.Anchoringofinnovationimpactsofpublicprocurementtoplace:towardsaframework

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Whatwouldthissteeringlooklike?Inwhatfollowswefocusonthreemechanisms,namely the extent to which conversations may be: contextualized or mademorerelevanttoaplace(aweakformofanchoring);anchoredtoplacetopromotemutuallearning and knowledge upgrading; or consolidated to scale up and diffuseknowledgetoadvanceplacebasedcompetitiveness.5.1ContextualisingconversationsProcurement may be made more relevant to place when the content ofconversationsinformingthedefinitionofneedsandthedesignoftheprocurementprocess are reflective of specific economic, social and environmental needs of alocation.Conversationsmayframedecisions“aroundwiderconsiderationsaffectingthe place” (CLES, 2015b: 15) and influence potentially footloose investment tobecome more attuned to the needs and challenges influencing the particularlocation.In their study on schoolmeals,Morgan and Sonnino (2007: 24) describe how thedominantfoodcultureinItaly,andthereforetheprocurementofschoolmeals,was‘legally contextualised’ and “rooted in time and space”. Procurement in Italianschools was based on locally anchored conversations that incorporated widerconsiderations related not only to health but also to the specific culture of theterritory. Such on-going conversations also actively involved parents, articulatedthrough the so called CommissioneMensa (Canteen Commissions), which in turnhelpeddiffuse foodeducationpolicy fromtheschoolcanteen to the family. In theUK,bycontrast,publicprocurementofschoolmealswasconductedinthecontextofa mainstream food culture and based around generic considerations of growth,profitsandefficiency,with littleornoconnectiontoregionaland localspaces(seealsoMorgan,2008).AsMorgan (2008)pointsout, there isan inherent,althoughoftenmoreperceivedthanreal,tensionbetweentheidealsofsocialandenvironmentalsustainabilityandobjectives of competition, transparency and non-discrimination enshrined inEuropean procurement directives. Indeed, while discriminatory practices such as‘buying local’ are explicitly outlawed, the new European public procurementdirective(2014/24/EU)allowstheuseofbestprice-qualityratioallowingintegrationofquality,socialand/onenvironmentalconsiderations intheawardcriteriaaswellastheinclusionofsocialconsiderationsamongthecontractperformanceconditions.LocalauthoritiesinEnglandandWalesarestartingtoshifttheirpracticesfollowingthepassingofthePublicServices(SocialValue)Actin2012requiringpublicbodiestoconsider how the services they procure might improve the economic, social andenvironmental well-being of the area. This encourages local authorities to thinkabouttheirsocialvalueprioritiesandtoengagethecommunityindefiningthose,aswellasthewayinwhichthoseprioritiescanbetranslatedintotenderrequirements.Examplesof efforts tomakeprocurementmore relevant toplace canbe found inaccounts of ‘anchor institutions’ (often from theUS and Canada), leveraging their

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institutionalassetstoimproveeconomicdevelopmentintheirareaofinfluence,forinstance through addressing problemsof inequality or urban deterioration. Ehlenz(2015),CLES (2015a)andRobertsandSiemiatycki (2015)describehowuniversitiesand university hospitals in cities such as Philadelphia, Cleveland and Toronto areusing their influence as purchaser and employer to boost economic opportunitiesthroughrevitalisationandphysicalimprovementstrategiesinthearea.Most accountsof ‘anchor institutions’ treat the fact thatmuchpurchasing is fromsourcesoutsideoftheregionasamissedopportunityintermsofpotentialeconomicimpact for the city or region. However they fall short of considering knowledgeupgradingasadditionalmeansofanchoring.Opportunitiesareoftendepictedinannarrowandunidirectionalway, focusingon thequantity rather than thequalityofinvestmentretainedintheregion,andneglectinghowthequalityofplace,intermsofculture(asintheItalianfoodprocurementexampledescribedabove),knowledgeassets and infrastructure can be nurtured and mobilised to co-create thisinvestment,leadingtoavirtuousupgradingoflocalknowledge.In other words, making procurement more relevant to place does not in itselfguaranteelearning,whichweconsideranessentialfeatureofsuccessfulanchoring.As Crevoisier and Jeannerat (2009: 1237), “when the anchoring is strong, thelearningpermitsanenrichmentofknowledge:eitherofthelocationorofthemobileelementorofboth”.

5.2AnchoringconversationsBesides considering specific social and environmental needs of a location,procurementcanalsobeanchoredtoplacebymeansoflocalauthoritiesandotherpurchasingauthoritiescultivatingagreaterappreciationofandbetterengagementwith place specific assets, including specialist knowledge communities who couldplayaroleindeliveringmoreinnovativesolutions.Public authorities often fail to appreciate existing innovations that could beincorporated into the public realm and inadvertently drive away potentiallyinnovativesupplierswhomaysensealackofcompetenceordemandforinnovationonthepartofthepublicsector(Uyarraetal.,2014).MostofthecasestudycitiesinLemberetal.(2011)lackedproceduresforacontinuousmarketwatchforthetypesofnewsolutionsfirmsoruniversitiescouldprovidetoaddressmarketneeds.Earlyconversationswouldenablegreaterawarenessbypublicauthoritiesofexpertknowledgeandincreasetheinterestandmotivationofthelocalknowledgebasetoparticipateinlocalprocurementcompetitions(EdelenbosandTeisman,2008).Earlyengagement in such conversations (via market consultation, market testing,engagementmeetingsandeventsinvolvingnotjustprocurersbutalsoendusers,orthroughmoreformalisedmeanssuchascompetitivedialogue)signalawillingnesstopurchase a novel solution, thus reducing the market risks perceived by suppliers(PelkonenandValovirta,2015;Whylesetal.,2015),whileatthesametimeallowing

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procurers to benefit from specialist knowledge when shaping specifications (i.e.functional and technical). Evidently, the search for relevant knowledge is not andshould not be restricted to the local milieu, however a heightened awareness ofexisting capacity and expertise would have a strong signalling effect for localinnovators.Zabala-Iturriagagoitia(2013)describeshowtheCityofMalmoinSwedeninstigated‘creative dialogues’ with experts and potential suppliers for its urban ecologicaldevelopmentprojects, leading to the regenerationof someof themost neglectedareas in the city. The intention of the dialogue was that both public and privateactorswouldbenefitfromsharingknowledgebeforethecallwaslaunched,buildingupon their collective expertise. Including many stakeholders in these dialogueshelpedtocreateacommonunderstandingoftheproject’sambitiousgoalsandthedefinitionsoftherequirements(mainlyfunctional)thatshouldbeaddressedbythesuppliersineachcall.On-going conversations with specialist communities can also generate a trustingenvironment for the development of new, even unsolicited ideas and proposals(Roberts and Siemiatycki, 2015). For instance, Zelenbabic (2015) describes thedevelopmentofapilotprojectandeventuallyafullcontractbytheMunicipalityofLolland (Denmark)aroundanunsolicited idea foranewcleaning systembasedontheuseofmicrofibreclothsandmopsofunique,thincompositefibres.Yeowetal.(2015)alsodescribehowtheideaforthedevelopmentofaninnovative‘closedloop’solution for confidential waste at HM Revenue and Customs (HMRC) had alreadybeendiscussedwiththeincumbentsupplierwithinon-going‘blue-sky’conversationsovertheyearsbutasuddencrisistriggeredbythelossofsensitivedocumentsgavethemtheopportunitytoputitintopractice.Amore strategic form of anchoringwould include deliberate attempts to nurtureand boost local capabilities by targeting public procurement projects that are notonly related to improving the public realm but also have greatest potential tonurturethelocalknowledgebase,particularlythesectorsandactivitiesidentifiedasstrategic in the region. For instance TheGalicianHealth Service (SERGAS) in Spainlaunchedaseriesofplansfocusedoninnovationinthehospitalenvironmentandinhealthcareserviceswhichcontemplatedtheuseofnewbusinessmodelstoexploitinnovative products and services and the strengthening of synergies across thehealthcare ecosystem, includingmapping local innovation capacity andmobilizingexpertise in healthcaremanagement. Procurement herewas used a strategic toolnot only to improve health services but also to enable business innovation withexportpotential(CuetoandGarrido,2013).Such anchoring also requires extending conversations to local development actorsandorganizationssuchaschambersofcommerceandclusterorganisationstobuildupthecapacityoflocalbusinessesandraiseawarenessoffutureopportunities,evenaligning funding conditions for innovation support. For instance, inGalicia SERGASearly market engagement was done in sync with innovation support fundingagencies. Pelkonen and Valovirta (2015) and CLES (2015b) discuss other forms of

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anchoring to improve learning that involve collaborative initiatives such as thesettingupofcooperativesortheformationofsuppliernetworks.Locally anchored procurement need not lead to unduly privileging local and/orincumbent suppliers,which risksnotonlydeliveryof suboptimalgoodsor servicesbutalsorisksartificiallysustaininganotherwisenon-competitivesupplybase.Thisisparticularly the case when the knowledge and expertise required is not locallypresent but requires conversations with specialist but geographically dispersedsuppliersandcommunitiesofpracticetoinformthedesignandeventualdeliveryofgoodsandservices.However,suchinvestmentscanbemademorespatiallystickybylinking them to local assets and thus enabling learning and local technologicalupgrading (Uyarra and Flanagan, 2010). This could involve sub-contractingrequirements, licensing, and purchasing of complementary products and services,andothermeansofsupportdirectedatupgrading localsuppliers (CLES,2015).Forinstance,UyarraandGee(2014)describetheprocessoftechnologicalupgradingofthemunicipalwastemanagement system inGreaterManchester (UK) through theengagement of global technology firms and their local anchoring bymeans of up-skilling, subcontracting and development of proximity-based complementaryactivities. The innovative lighting system contract described in Edler et al. (2005)requiredanexpertisethatwasnotavailablelocally,yetclearinterfacesweresetupbetween the external contractor and local service providers in order tomaximisespilloversintermsofsustainability,innovationandskillsupgrading.5.3Bridgingdistance(consolidation)Conversations with users and the community at large, anchored around localproblemsandchallenges,mayfavourthedevelopmentofnicheinnovations.Regionsandlocalitiescanbecomelaboratoriesforexperimentation(MorganandHenderson,2002)andprocuringbodiesleadusersforaparticulardevelopmentwhichcanlaterbediffusedmorewidely, so thateven thoughpublicprocurement is responsive tolocalneedsitcanacttocatalyseinnovativedevelopmentsonalargerscale.SomeoftheinnovationsdescribedinLemberetal.(2011)suchastheIDcardexamplefromTallin(Estonia)wereintroducedtosatisfyaspecificsocialneedbutultimatelyledtoamuchwiderapplicationandmarketdiffusion.Inothercasesinnovationsmay“remainspatiallyisolatedandpoliticallyfragileunlessthey are scaled up to, and validated by, the nation-state” (Morgan and Sonnino,2013:16).Thedownsideofsmallnessisthatlocalitiesmaynotpresentthepossibilityof economies of scale sufficient to trigger theup-scalingof such experiments. Butscaleisnotsomething‘outthere’;ratheritis“constructedbysocialactorspursuingtheirgoalswithinspatialframeworks”(Coenenetal.,2012:975).Scalecanthusbeactively constructed by procurement decisions to bundle or aggregate demand inordertoenlargethemarkettofacilitatetheemergenceofaparticulartechnologyoralterthemarketstructuremakingitmoreattractivefornewentrants(KnutssonandThomasson,2014;UyarraandGee,2013).Generallyspeaking,thecapacityofpublicadministrationstoactas‘leadusers’woulddependnotonlyontheirunderstanding

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ofandsimilaritieswithotherpotentialusers,butalsoontheircapacitytohelpaligntheneedsofthesedifferentusersinordertoexpressaconsistentdemand.Demand that is highly specific to local problems and challenges may makeprocurement less accessible to outsiders, thus deterring potential innovators andlimitingmarketcreationandthepotentialforfurtheradoptionandspillovereffects.Fragmented demand may also be a disincentive for long-term investment ininnovation.Forinstance,conversationsaroundthe‘slipper’streetlightingsolutioninTameside (UK) (Uyarra, 2010), while involving productive dialogue across localspecialistsaroundthisnovelproduct,didnotincludeotherlocalauthoritiesfromtheoutset and thusmissed an opportunity to avoid strong resistance to adoption byneighbouring councils. Lember et al. (2011) describe how support from centralgovernment, in the formof regulation ormarket subsidies,were essential for theintroductionofselectedinnovativeservicesintheNordic-BalticSeacities.Need specificity may in fact be the result of inertia and lack of intra and inter-organisational coordination stemming from silo thinking anda reluctance to shareinformationanddisseminategoodpracticewithinoracrossorganisations(Phillipsetal., 2007; Morgan, 2008; Uyarra, 2010; Edler and Yeow, 2016)—rather than trulyuniqueordistinctiveneeds.ForinstanceYeowetal.(2015)describethefragmentedmanagement of confidentialwaste disposal in HMRC prior to the adoption of the‘closedloop’solutionresultingnotonlyinpoorvalueformoneybutalsoinlimitedcontrol and traceability of (confidential) waste. Devising a better solution firstrequiredsurveyingandpoolingdataonthevolumeofwastegenerated,andonthefrequency and cost of collection across the whole organisation. Similarly,consolidatingdataonwastedisposalbyeachofthetenlocalauthoritiesinGreaterManchesterhelpedbuildacasenationallyforinvestmentinstateoftheartrecyclingandwastemanagementtechnologyandinfrastructure(UyarraandGee,2014).Aggregation of demand—understood as the identification of common or similarcurrentorfuturerequirementswithinanorganisation,andwithotherorganisations(OGC, 2006)—can thus contribute to aligning needs and conditions and set upstandards thatcan facilitate theprovisionofproductsandservicesbysuppliersbyproviding amore visible and predictablemarket, and therefore appeal to a largernumber of potential buyers. Wider ‘conversations’ leading to a consolidation ofdemandcanalsoactasaleverforachievingwiderlocaleconomicbenefitiftheyleadanchor organizations such as schools, local authorities and hospitals to buildcommonprocessesandacommonvisiontobenefitthelocaleconomy,asdescribedbyCLES(2015).Consolidatingdemandneednotnecessarilyentailaggregationofsupply,ormaybedone in such a way as to invite the market to bid for smaller bids for differentelements of the requirement (OGC, 2006; Timmermans and Zabala-Iturriagagoitia,2013), thus mitigating the potential negative effects of contract aggregation.Decisions regarding aggregation are contingent on the specific nature of therequirementsandthestructureofthesupplymarket:conversationsenablemarket-

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testing the suitability of such strategies. For instance in Greater Manchester, adecisionwas taken to aggregate the variouswaste services required into a larger,integrated contract in order to be able to achieve greater economies of scale toinfluencealarge,verticallyintegratedsectorintobecomingmoreinnovative(UyarraandGee,2013).Inothercasesunbundlingmaybeabetterwaytoshapemarkets,asforinstanceinthefoodprocurementprojectdescribedbyKnutssonandThomasson(2014). Inordertobreakdownanoligopolisticsupplymarketandshiftaverypoorstandardofprovisionoffoodservices,themunicipalityofKlippan(Sweden)chosetodividetherequirements inordertoattractseveralsmallprovidersratherthanonelargeone.Consolidation inthiscasedidnot involveaggregationbutthesharingofinformation. By sharing experiences with other municipalities (rather thancollaboratingtoachievehighervolumes),othersfollowedsuitinchangingpractices,overtimeexertingchangeinthemarket(KnutssonandThomasson,2014).Figure 1 below describes the different modalities of conversational spaces inprocurementandtheoptionsforanchoring.Differentscenariosandstartingpointswouldberelevantdependingonthenatureoftheproductorserviceprocured,thenature of the challenge addressed and the quality and availability of specialistknowledge.Successfulanchoringofknowledgeinvolvesinteractionbetweenmobileknowledgeinsuchawayastofacilitatelearningandknowledgeformationprocessesthatarenotjustlocallyrelevantbutalsogloballycompetitive.Figure1:Geographicaldynamicsofconversations

Source:ownelaborationbasedonRutten(2016)andCrevoisierandJeannerat(2009)Ascanbeseenfromthefigure,thescenariospresentedabovearenotintendedasstatic categories. Specifically, procurement authorities engaged in potentiallyfootloose conversations could aim to contextualise procurement through

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incorporating relevant place based social and environmental considerations.Procurement can be further anchored through building up supply capabilities andmore closely engaging with the supply base and connecting it with globalcapabilities.Furtherconsolidationmechanismsareaimedatmovingintomulti-localanchored conversations inwhich the priorities and interests ofmultiple places, aswell as the global character of knowledge are considered. Future research shouldlookforevidenceofthesepotentialdynamics.6.DiscussionandconclusionWhile interest in the use of procurement to spur innovation-driven economicdevelopmenthasbeenontherise,littleeffortseemstohavebeenmadethusfartolink (typically aspatial) accounts of public procurement of innovation and theregionalinnovationliterature.Inthecurrentcontextofplace-basedinnovationandsmart specialisation this seems particularly odd. Public procurement is a multi-purposepolicy,pursuingmultipleeconomic,socialandenvironmentalgoals.Addinga further additional goal of promoting innovation, in the form of PPI, may beparticularly challenging for local procurers, given their small scale and purchasingpower, and consequently often limited implementation capacity. Not surprisingly,then,thePPIliteraturehastendedtofocusonnationalorsectoralpolicies.Inparticular,itseemsstrangetoseesomuchemphasisonsocialinteraction(suchasuser-producer interaction) in discussions of PPI whilst the spatial implications ofinteraction remain underexplored. We have argued that knowledge creationprocessesinvolvingusersandproducershavebothasocialandaspatialdimension.Wehave adopted the notion of conversations to emphasise the social and spatialembeddingofinnovationshapinginteractionsinthecontextofpublicprocurement.By proposing an analytical framework, the paper aims to generatemore nuanceddiscussionsaroundthequestionsofwhenandhowcanprocurementbeusedasaregional policy tool. We also seek to extend the debate around ‘anchororganizations’ which, in our view, does not currently pay sufficient attention toknowledge and learning, and connect it to more dynamic approaches incontemporaryeconomicgeographyliterature.Applyingthenotionofconversationsisusefulinthatitdrawsattentiontothefluidinterpretativestagebeforeandduringtheformalprocurementprocesswhereneedsare defined and collectively constructed with the market, end users and otherstakeholders.Inevolutionaryterms,conversationsareamechanismsupportingbothvariety generation and selection. Conversations are often ‘spatially sticky’ in thattheytakeplacebetweenactors thatarestronglyconnectedtoaplaceand/or thatmaybenefitfromitsqualities.Wehavearguedthatprocurementmaybeanchoredtoaparticularlocationeitherbypayingattentiontothequalityofplaceinshapingandarticulatingpublic sectorneedsorbyaligning them to the specificneedsof alocation.Thiskindofpracticeisinstarkcontrasttoefficiency-orientedprocurementbasedaroundnarrow,‘footloose’specifications.

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We have considered what public procurement as a shared conversational spacemight look like.We have drawn on a number of examples to illustrate how suchconversations have contributed to better and more innovative procurementoutcomes,forinstanceby:involvingplace-basedassets(includingintellectualassets)in discussions around the definition of issues and problems; making use of localnetworkstotapintotheseresourcesandcommunicate/raiseawarenessofmediumto long term market opportunities; incorporating a wider range of regionalstakeholders in conversations in order to get a broader, richer understanding ofplacebasedneedssotheycanbetranslatedintotenderrequirements;extendingtheconversation to similar organizations to share standards and good practice (thusreducingtheriskofsilothinking);developingacommonvisionofrequirementsthatarereflectiveoftheneedsofalocation(forinstancearoundculture,regenerationorthe environment); and sharing experiences and constructing scale by means ofconsolidating demand in order to gain leverage in the market and scale up localexperiments.Notwithstandingthecurrenthighlevelofinterestinhowpublicprocurementmightspur innovation, in practice there remains a tendency to privilege short-termefficiency considerations. Efficiency leaves little room for experimentation and istherefore often incompatible with innovation (Potts, 2009). On the other hand,evolutionaryprocesses requireselectionaswellas thegenerationofvariationandthestumblingblockforamoreevolutionaryapproachtopublic intervention inthesearch for innovation-driven economic development has been the challenge ofknowingwhenitisappropriatetopromotevarietyandwhen,incontrast,it istimetomakeaselection(ortoallowaselectiontobemade).Wewouldarguethat,byanchoring conversations to particular places whilst involving a broader range ofactorsinconversationsasearlyaspossible,itmaybepossibletosquarethiscircle.Conversations can allow actors to come together to share goals and ideas,promotingvarietyinproblemunderstandingsandpotentialsolutions.Butinhelpingactorsunderstandeachother’sgoalsandrequirementsconversationsalsopromotemutual adaptive co-ordination, a process that supports the selection of particularoptions to take forward (Edelenbos and Teisman, 2008). Proximity and trustmayhelptheseconversations.However‘anchoring’procurementmightalsohavetrade-offs,especiallywhereneedsarehighly ‘contextspecific’orwhere local institutionslackcapabilitiesandpowertoinvolveexpertoutsidersintheseconversations.All of the above suggests that more empirical attention should be given tounderstanding the role played by conversations across different geographies inshaping procurement outcomes, positive and negative, and in particular thequestionas towhen it is appropriate toattempt toanchor theseconversations toplace.Itisalsoimportanttoadvancetowardsacollaborativeandmulti-scalaruseofpublic procurement and to complement local processes with supra-local ones, inorder not only to improve regional government capabilities but also to takeadvantagesofsynergiesacrossdifferentlevels.Webelievethattheseareimportantfirst steps towardsbuildingbetter rationales for theuseof public procurement topromoteplace-basedinnovation-driveneconomicdevelopment.

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