THE PERSPECTIVES OF SMALL AND MEDIUM- SIZED ENTERPRISES ON PARTICIPATION IN PUBLIC PROCUREMENT OF INNOVATION

Abstract

The modernisation of the public sector can be observed in the public administration systems of many European countries. The use of the most up-to-date and advanced models of new public management is aimed at replacing traditional centralised hierarchical management with a more efficient modern management system that requires less resources and is oriented towards the development of the information society and the expansion of services. The Innovation Union initiative of the European Union (hereinafter ‘EU’) is one of the seven objectives of the Europe 2020 strategy for ensuring a smart, sustainable, and inclusive economy. Small and medium-sized enterprises (hereinafter ‘SMEs’) account for approximately 99.5% of all businesses in Lithuania, and are one of the main factors in the economic growth of the country. One of the advantages of including SMEs in the public procurement of innovation is that SMEs tend to grow much faster than large companies, as they take advantage of innovative financing tools and the more favourable business environment created by institutions. The authors maintain that, when contracts are awarded to SMEs, the revenue of the government, along with its level of innovation, increases, and this process also promotes entrepreneurship and contributes to the creation of jobs and economic development. The methodological approach in this paper is based on the analysis of relevant issues and both theoretical (analysis and synthesis, systematic, comparative) and empirical (secondary data and document analysis) qualitative research.