Abstract
This paper studies the impact of procurement on supplier firms. Specifically, we empirically investigate the direct and indirect mechanisms through which public procurement influences firms’ performance in the Italian space industry. Our research strategy involves conducting a survey of firms and analysing the results with econometric tools, and we interpret qualitative data from interviews as cross-validation. We found that space procurement generates two outcomes in firms: “intermediate outcomes”—i.e., learning, collateral innovation, and market penetration—and “final outcomes”—i.e., profit and sales, business development, and employment—and that the former mediate the impact of procurement on the latter. Our results offer insights into understanding the role of public procurement from the suppliers’ perspective.
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CSIL is an applied economic research institute specialised in SME competitiveness and market analysis, industrial and innovation policies https://www.csilmilano.com/
Archimede is the web platform used by ASI to manage the contracts awarded by ASI to its contracting parties. It reports information on legal, economic, and accounting specifications.
These include: Italian Space Agency virtual district; Association for Space-based Applications and Services (ASAS); Associazione delle Imprese per le Attività Spaziali/Italian space companies and activities association (AIPAS); Federazione Italiana per l’Aerospazio, la Difesa e la Sicurezza/Italian federation of aerospace, defense, and security (AIAD); LazioInnova.
The dichotomisation is done attributing value 0 to answers in the range 1–3 (from strongly disagree to neutral) and value 1 to answers taking values 4–5 (i.e., agree and strongly agree).
By using the Gereffi’s (2005) definition, which in turn elaborates on Williamson (1991), a “Relational governance” implies that buyer and supplier cooperate regularly to deal with complex information that is not easily transmitted or learned. As a consequence, frequent interactions and knowledge sharing take place to remedy the incompleteness of contracts, and flexibly deal with all possible contingencies. Relational governance consists of linkages that take time to build and that generate mutual reliance, so the costs and difficulties of switching to a new partner tend to be high.
Eurostat indicators on High-tech industry and Knowledge – intensive services Annex 3 – High-tech aggregation by NACE Rev.2 https://ec.europa.eu/eurostat/cache/metadata/Annexes/htec_esms_an3.pdf (June 2023).
57% of respondents recorded a turnover related to the space sector of less than 50%, while for the remaining 19% of respondents it varies from 50 to 90%.
TRLs are indicators of the maturity level of particular technologies and provide a common understanding of a specific technology status along the innovation chain. There are nine technology readiness levels; TRL 1 being the lowest and TRL 9 the highest. Developed by NASA in the 1970s, the Technology Readiness Levels (TRLs) are a method for estimating the maturity of technologies during the acquisition phase of a program. The TRL classification is used today at international level, including by ESA and the European Commission to indicate the maturity level of particular technologies, for instance in the H2020 programme. European Commission Decision C(2019)4575 of 2 July 2019, Work Programme, p. 27.
https://ec.europa.eu/research/participants/data/ref/h2020/other/wp/2018-2020/annexes/h2020-wp1820-annex-ga_en.pdf (June 2023).
Nonetheless, note also that Nicoletti and Pryor (2006) showed that subjective and objective economic indicators, collected with very different methodologies (e.g., official statistics vs. surveys) may be significantly correlated with each other.
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Acknowledgements
The authors want to thank the Riccardo Fini and three anonym reviewers for their thoughtful comments and efforts to review our manuscript. The paper originates from an agreement between the Italian Space Agency (ASI) and the University of Milan (2018–2021). The agreement, entitled “Cost-benefit analysis of public policies in the space sector”, was coordinated by prof. Massimo Florio.
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Castelnovo, P., Catalano, G., Giffoni, F. et al. The outcomes of public procurements: an empirical analysis of the Italian space industry. J Technol Transf 49, 367–399 (2024). https://doi.org/10.1007/s10961-023-10038-6
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DOI: https://doi.org/10.1007/s10961-023-10038-6