Issues in user-producer relations in the innovation process: the role of government

This paper reviews and explores a wide variety of facets and levels of interaction with respect to user–producer relationships inasmuch as they influence the innovation process. Particular emphasis is placed upon the role of governmental policies and their agencies. The contextural relevance, importance and experiences of technologically progressive suppliers and user–producer linkages (in a variety of forms) is examined. Whilst public procurement policies are seen to be of considerable importance their relative effectiveness depends upon the approach taken. In that respect a wide variety of examples from Europe, the USA and Japan are considered. Government's direct role is seen to be greatest where it is itself an important user. Public procurement can not only stimulate innovation in existing market structures but also catalyse firms to engage in new areas of activity thereby influencing the rate of diffusion of innovation, its diversity and wider form.