Coordinated unbundling: A way to stimulate entrepreneurship through public procurement for innovation

Public procurement for innovation is a matter of using public demand to trigger innovation. Empirical studies have demonstrated that demand-based policy instruments can be considered to be a powerful tool in stimulating innovative processes among existing firms. However, the existing literature has not focused on the role this policy instrument can play in the promotion of (knowledge-intensive) entrepreneurship. This paper investigates this link in more detail and introduces the concept of coordinated unbundling as a strategy that can facilitate this purpose. We also present a framework for organising public procurement for innovation around this unbundling strategy and provide a set of challenges that need to be addressed.