Can the Public Sector and Vendors Digitally Transform? A Case from Innovative Public Procurement
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Recent research emphasizes the distinctive characteristic of innovation in public sector as opposed to that in the private sector. Several researchers point to the need for open and networked innovation for the public sector to succeed in addressing societal challenges. Innovation networks are specifically important in digital transformation where the generative nature of the digital requires a high level of messiness and continued informal exchange of knowledge among the innovation actors. On the other hand, the public sector is subject to strict regulations related to fairness in procurement of new, innovative digital solutions. The public sector needs to balance between digital transformation's need for informal processes and simultaneously adherence to formal procurement processes regulated by laws. Our goal in this paper is to empirically illustrate how this balancing act develops in innovative public procurement processes, a new method for procurement aiming for achieving innovation through procurement. We report from an empirical case study of innovative public procurement in the Norwegian public sector. Our findings show how, in innovative public procurement, project managers and procurers in the public sector must change their roles, difficulties arise when changing from purchasing offthe-shelf solutions to more continuous processes, and how there are tensions in the vendor-public sector networks. By using the lenses of open innovation and digital transformation, we identify discrepancies between the literature and the current public sector procurement practices.