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The role of public procurement as an instrument to stimulate innovation has been increasingly emphasized by European policymakers. This perspective raises demand for the understanding of public procurement as an activity taking place in a variety of different procurement contexts and as an act of innovation. Accordingly, this paper proposes a taxonomy of public procurement and innovation, combining interactive learning and evolutionary perspectives on innovation processes to account for the broad range of different 'interaction environments' or 'resource interfaces' in which government or public sector organizations may act as lead users of innovations. On this basis, the taxonomy draws practical policy implications for the design of programmes and initiatives for the public procurement of innovations.

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PurposePublic procurement has been increasingly seen as an important innovation policy tool. One neglected aspect of the public procurement of innovation is, however, diffusion. The purpose of this paper is to counter this neglect by exploring how institutional coordination may affect the diffusion of innovations procured by a public agency.Design/methodology/approachA case study including semi‐structured interviews and the consulting of different documents were used to study how institutions and institutional coordination affect the adoption and diffusion of innovation.FindingsSeveral endogenous institutions were identified that act as barriers to the diffusion of innovation throughout an organisation. Attempts to re‐design and negate these barriers were also identified.Research limitations/implicationsInstitutional analysis of innovation has a tendency to be limited to formal and exogenous institutions. The paper underscores the importance of taking into account the endogenous institutional set‐up. The results are drawn on a single case study.Practical implicationsThe understanding of public procurement of innovation needs to be expanded beyond the formal procurement process. Special attention needs to be given to diffusion processes where institutional coordination and re‐design should be considered an important component.Originality/valueThe paper considers diffusion as an important component of public procurement of innovation, and emphasises the importance of the endogenous institutional level both for understanding and for coordinating diffusion, which are two aspects commonly neglected in the literature.

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