Ireland’s scaling businesses are facing an estimated €1.1 billion equity financing gap over the next three to five years. While access to private capital remains essential, public procurement can also play a constructive role by creating opportunities for innovative businesses to demonstrate their capabilities, win contracts and build the commercial experience needed to grow.

The issue was raised at Scale Ireland’s sixth annual Autumn Gathering, where founders and investors discussed the challenges facing Irish companies as they scale. The discussion around public procurement highlights an opportunity for Government purchasing to support innovation while continuing to prioritise competition, quality and value for money.

Research commissioned by the Department of Enterprise, Tourism and Employment estimates an equity financing gap of approximately €1.1 billion for Irish scaling companies over the next three to five years. The Department’s research on scaling finance in Ireland found particular pressure around €5 million to €10 million deals, later funding rounds, capital-intensive sectors and businesses requiring patient, long-term investment.

Public procurement cannot replace private investment, but it can complement it by giving growing businesses opportunities to establish themselves in demanding commercial environments. At the Scale Ireland event, Buymedia founder Fergal O’Connor called for greater recognition of innovation in Government procurement, including the possibility of an innovation score in tender evaluations. Tánaiste Simon Harris also acknowledged the importance of recognising disruptive technology and innovation in procurement.

Ireland already has mechanisms that can support this approach. The Office of Government Procurement highlights functional specifications, variants, Public Procurement of Innovative Solutions, Pre-Commercial Procurement and Innovation Partnerships as tools for innovation. The OGP’s innovation procurement guidance explains how functional specifications can focus on the outcome required rather than prescribing one particular solution, giving suppliers greater scope to develop an appropriate response.

This can be particularly valuable for technology-led procurement, where solutions are evolving quickly. Focusing on the problem to be solved rather than a predetermined technology can allow procurement teams to consider a broader range of approaches while maintaining clear requirements around performance and outcomes.

The SME dimension is equally important. Smaller businesses can bring new technologies and specialist expertise to public-sector markets, but procurement requirements need to remain proportionate. The OGP’s guidance on SMEs in public procurement recommends measures including preliminary market consultations, appropriate lotting, proportionate turnover requirements, consideration of technical capability and the use of variants and consortia where suitable.

For procurement professionals, three areas stand out. First, strengthen early market engagement through preliminary market consultations to understand emerging technologies and supplier capabilities. Second, consider outcome-based specifications where the solution is still developing. Third, maintain proportionate qualification requirements so capable SMEs can compete without compromising quality or risk management.

The potential benefits extend beyond individual contracts. For a scaling business, a public-sector contract can provide commercial experience and a valuable reference point. For public bodies, broader supplier participation can strengthen competition, diversify supply chains and provide access to new technologies and delivery models.

Ireland’s scaling finance gap will require action across investment and enterprise policy, but procurement can form part of that wider growth ecosystem. By making better use of existing innovation procurement tools, public bodies can support stronger competition while giving innovative businesses more opportunities to grow and demonstrate their value.