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on Project, Program and Portfolio Management |
| By: | Edquist , Charles (CIRCLE, Lund University); Zabala-Iturriagagoitia , Jon Mikel (CIRCLE, Lund University) |
| Abstract: | In 2006 the European Commission introduced the concept of "Pre-Commercial Procurement" as an instrument to promote innovation and to mitigate grand challenges. One of the main motivations for the support of Pre-Commercial Procurement schemes was to use public needs as a driver for innovation. This concept was also introduced as a response to the need to reinforce the innovation capabilities of the EU, while improving the quality and efficiency of public services. However, there is still a certain degree of confusion as to what is meant by Pre-Commercial Procurement and what rationales are behind it. This paper addresses the differences between two public policy instruments, PreCommercial Procurement (PCP) and Public Procurement for Innovation (PPI), and clarifies what is meant by each of them. The analysis is based on three cases, one from the Netherlands, one from the UK and one from Australia. While PPI is a demand-side policy instrument, these cases provide evidence of the supply-side nature of Pre-Commercial Procurement in relation to innovation. The paper claims that PCP is a matter of R&D funding of a specific kind, geared towards very specific goals and in a focused way. Thus, we would like to raise a flag for going back to the origins of the PCP program, and calling it a precompetitive R&D program rather than talking about procurement. |
| Keywords: | Pre-Commercial procurement; Public Procurement for Innovation; R&D; Innovation; Innovation policy |
| JEL: | H57 L38 M38 O25 O32 |
| Date: | 2012–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2012_011&r=ppm |
| By: | Giorgio Barba Navaretti (University of Milan and Centro Studi Luca d’Agliano); Anthony J. Venables (University of Oxford and CEPR) |
| Abstract: | Are there benefits to the host country from multinational investments? Does potential value from these investments make active industrial policy worthwhile? We answer the first question affirmatively, having reviewed economic principles and evidence concerning the effects of projects locating in (or not being off-shored from) a country. On the second, policy can have a limited effect in influencing location decisions, but it is doubtful that it is cost effective. Implementation faces lack of information, risk of capture and, in many cases, non-rigorous processes. Competition between jurisdictions means that much policy is investment diversion not investment creation. There is a case for supra-national controls (as with EU State Aid regulations), for policy to be used only for well-defined market failures, and for better implementation and more rigorous ex-ante appraisal and ex-post evaluation. |
| Keywords: | Multinational Corporations, Industrial Policy |
| Date: | 2013–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:csl:devewp:352&r=ppm |
| By: | Rauf Ibragimov, Ignacio Velez-Pareja, Joseph Tham; Ignacio Vélez-Pareja; Joseph Tham |
| Abstract: | We argue that the Economic Value Added (EVA) is biased by design and will generally yield distorted assessment of both the operating and overall performance. Fundamentally, the scale of measurement bias depends on the interest tax shield actually obtained in a measurement period and on a book to value ratio, however, there are also other potentially significant sources of distortions induced by the metric design. A robust alternative we propose is a concurrent evaluation of operating and total performance with the two nested metrics, Operating EVA (OEVA) and Total EVA (TEVA). OEVA applies the risk of assets (rather than WACC) to calculates the full capital charge and is unaffected by financing activities. TEVA incorporates financing side effects by explicitly adding interest tax shields to OEVA, but can be calculated as simply as a sum of interest expenses and net income less the full capital charge. The OEVA-TEVA approach is computationally simpler than EVA, the corresponding valuation model is consistent with the cash flow discounting and can be utilized as a self-sufficient instrument for investment project appraisal and business valuation. |
| Date: | 2013–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000463:010721&r=ppm |
| By: | Rauf Ibragimov, Ignacio Velez-Pareja, Joseph Tham; Ignacio Vélez-Pareja; Joseph Tham |
| Abstract: | Taking a slightly closer look at the EVA basics prompts that the metric by design is a synthetic mixture of returns from the operating and financing activities, and therefore, yields a biased assessment of both the operating and overall performance. Fundamentally, the scale of the measurement bias depends on the interest tax shield actually obtained in a measurement period and on the book to value ratio, however, there are also other potentially significant sources of distortions induced by the metric design. An effective way to calibrate measurements is to evaluate the operating and total performance concurrently with the two metrics, the Operating EVA and the Total EVA. Operating EVA is calculated by applying the risk of assets rather than WACC to calculate the capital charge and unaffected by the financing side effects of the firm’s activities. It is unbiased and provides an informative estimate of the efficiency in ongoing operations and a basis for the overall performance assessment with the Total EVA. Both metrics are straightforward for interpretation and computationally simple relative to EVA. From the corporate finance perspective, the proposed dual-metric financial model is consistent with the fundamental approach of valuing a firm by cash flow discounting. |
| Date: | 2013–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000463:010720&r=ppm |
| By: | Mark Pauly; Ashley Swanson |
| Abstract: | This note considers a relatively new form of financing for social services, the "Social Impact Bond." Proponents of Social Impact Bonds argue that they present a solution to several problems in funding social services, including performance measurement and the distribution of risk. Using a simple model, we demonstrate that Social Impact Bonds have many features present in standard financing arrangements. They will lead to greater program success when investors’ effort can positively influence outcomes, but are unlikely to do so otherwise. We conclude that the value of this funding innovation will be strongly context-dependent. |
| JEL: | H0 H51 I1 I10 I18 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18991&r=ppm |
| By: | Vladimir Mau (Russian Presidential Academy of National Economy); Konstantin Yanovsky (Samuel Neaman Institute for Advanced Studies in Science and Technology, Technion (Israel)) |
| Abstract: | The last decade’s Reforms in post-communist countries demonstrated, the aid proved to be most efficient in the countries where due to a timely schedule and consistency in reform implementation, governments can easily do without it. In case of Russia both the reformists and officials of international financial institutions have failed to race through the “window of opportunity”, while their vision of its necessary and sufficient qualities were likely to be inaccurate. |
| Keywords: | demand for institutions, electoral support to reforms; political factors of assistance programs efficiency, window of opportunity for reforms & for assistance program |
| JEL: | D72 F59 N14 N44 P16 P33 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0060&r=ppm |