Europe spends just over 10% of public procurement on innovation, far below the 20% needed to fully leverage this powerful policy tool.
“A healthy economy needs 20% of the total amount of public procurement to be spent on innovation procurement investments […]” – yet European countries spend barely above half of that 20% level, reaching only 10.6% for the EU27 and 11.5% when including the UK, Norway, and Switzerland.
This is one of the key findings of the latest EU Innovation Procurement Observatory report, freshly published by the European Commission (EC). This benchmarking exercise, now in its second edition, builds on previously collected data while also incorporating newly gathered data, thereby providing an updated picture of the progress across Europe. Moreover, the 2025 edition comes at a particularly critical juncture: the EU is currently revising its 2014 Public Procurement Directive, with a proposal expected by the end of Q2 2026, alongside the forthcoming Public Procurement Act. At the same time, work continues on the delayed European Innovation Act – also set to cover pre-commercial and innovation procurement. Initially scheduled for 18 March alongside the EU Inc. proposal (see SwissCore article), this file has been postponed, reportedly because the proposal was not considered “ready and mature enough”. These two initiatives are reportedly set to be tabled together before the summer break.
Against this backdrop, the report provides fresh evidence on the state of play of innovation procurement across Europe. It analyses 30 countries – the EU27, the UK, Norway and Switzerland – assessing both the maturity of national policy frameworks and the level of public investment in innovation procurement across sectors. The benchmarking is structured in two parts: the first examines the implementation of policy measures up to 2023, while the second estimates the volume of related public investments in 2022. Among the key outputs are detailed country profiles and a comparative analysis highlighting similarities, differences and country clusters in terms of policy development and investment efforts.
As Switzerland was included in this exercise, its results offer a particularly interesting perspective. Switzerland ranks among the upper-middle performers, with around 11.9% of its public procurement devoted to innovation, placing it above the European average but still significantly below the 20% benchmark considered necessary to fully leverage procurement as an innovation policy tool. Importantly, the country has increased both the volume and share of innovation procurement compared to the previous exercise, confirming a positive trajectory. However, it has dropped in the relative ranking (from 5th to 8th place), as other countries have progressed more rapidly (with Nordic countries leading the way, such as Finland, Estonia, Denmark and Sweden).
The Swiss system combines several notable strengths. The federal legal framework for public procurement is well aligned with innovation-friendly principles, promoting value-for-money approaches, functional specifications (i.e. public authorities define the outcome/performance sought, rather than prescribing the exact technical solution), and competitive dialogue (i.e. contracting authority engages in structured discussions with potential suppliers before finalising the tender). In addition, Switzerland benefits from a highly dynamic innovation ecosystem, characterised by strong public–private collaboration and a solid pipeline of innovative firms and research outputs. Yet, these favourable conditions are not fully translated into a systemic use of procurement as a strategic policy lever. Structural challenges persist, notably the fragmentation across federal, cantonal and municipal levels, which limits coordination and scale. Moreover, Switzerland still lacks some of the key steering instruments observed in leading countries, such as a clear national action plan, binding targets, strong incentives for procurers and comprehensive monitoring mechanisms. As a result, innovation procurement remains more an available option than a consistently deployed policy tool.
Overall, the report formulates a series of recommendations, which will be particularly relevant in light of forthcoming EU initiatives. As the EC highlights, the revision of the procurement directives aims to (i) make public investment more efficient, (ii) develop tools to strengthen economic security and sovereignty, and (iii) better align procurement policy with broader strategic objectives. Ultimately, fostering innovation procurement would activate a powerful but still underused lever, capable of modernising public services, driving industrial growth and accelerating the deployment of strategic technologies.