Is Swedish Public Procurement Ready for Sustainable Product Development? : An Investigation on Barriers in Public Procurement that Prevents the Diffusion of Sustainable Innovations

Abstract: The current focus on sustainability entails an extension of companies focus beyond economicobjectives to an approach that also take into account economic, ecological as well as societal performance (Hollos, Blome and Foerstl, 2012). In this context, purchasing and supply has been transformed to have a strategic role in sustainability (Meehan and Bryde, 2011). The European Union point to a rising interest for policies that aim at a reorientation of public procurement to achieve solutions that promotes consideration of social policies and that supports sustainable innovation (European Commission, 2016).Public procurement processes have according to Oruezabala and Rico (2012) only been studied in a few empirical studies. Furthermore, Rolfstam et al. (2011) emphasizes that diffusion is an area that have been neglected in the public procurement of innovation. The need for sustainable innovations makes it relevant to address a gap in the literature, which beyond exposing hinders for sustainable public procurement accounts for their effect on the diffusion of sustainable innovations. Wastewater treatment is important for public procurement due to its significant environmental impact and therefore the wastewater treatment industry is the focus of this thesis. The importance of the study is supported by actors such as AxFlow that supplies the wastewater treatment industry with technical solutions. This company experiences that hinders in public procurement prevents diffusion of sustainable innovations.The purpose with this research is to investigate what barriers for sustainable procurement that prevents the diffusion of sustainable innovations. To fulfill this purpose a case study was conducted where data was collected through interviews with individuals with varying roles and experiences within public procurement to waste water treatment plants. In order to achieve the purpose it was necessary to determine that public procurement play a role in achieving a sustainable development. It was also crucial to find evidence on the existence of barriers for sustainable procurement and what these are. The results indicate that public procurement could play a significant role in promoting sustainable development. However, it is possible to conclude that the actual contribution is significantly small or nonexistent due to the fact that there are several barriers in place that prevents public procurement from having a significant impact. Findings suggests that barriers to sustainable procurement exists and that these relate to all three pillars of sustainable development, which are the economic, social and environmental pillar. By analyzing barriers to sustainable procurement found in the empirical study it was possible to identify which specific barriers that prevents the diffusion of sustainable innovations. It is concluded that the diffusion of sustainable innovations is prevented by the following barriers: 1. Public procurement failing to create economic incentives for sustainable product development. 2. An insufficient base of stake holders involved in the policy formulation process. 3. Policies not being formed on consensus and dialogue. 4. A lack of policy integration over different environmental media. 5. A lack of a strategic plan in public procurement. 6. Procurers given insufficient support and mutual measures necessary for evaluation.