Innovation in stable competitive tendering regimes: An insoluble knot?

Abstract

The transport sector is currently undergoing rapid development, which is to a large extent driven by innovation and technological changes initiated by various market actors. At the same time, public transport operations are largely framed by extensive procurement processes and a mature market where a few large companies compete for market share. In Europe, there is tension between rapid innovative development in the sector, on one hand, and stability given by regulation practices shaping procurement processes, on the other. This paper presents results from a study in which opportunities for innovation in procurement processes were examined. The findings are based on public transport authorities' and transport companies’ experiences from tendering bus transport in the three largest cities in Sweden. By using a theoretical perspective of innovation and institutional logics, the paper explains the restrictive role innovation has in procurement processes and discusses the conflicting views transport authorities and transport companies put forward. The paper is of general value since it raises questions related to the complexity of existing tendering regimes and the possibilities of facilitating innovation.