How to distinguish innovative suppliers? Identifying innovative suppliers as new task for purchasing

For companies operating under unfavourable macroeconomic conditions, such as high wage / high tax countries in central Europe, innovation has become a central theme to survive. If there is one thing that has changed in innovation management during the last decade, it is the growing reliance on external sources of technology. As a consequence, a new task for purchasing arises, as firms need an understanding of which suppliers actually do have high potential contributing to the innovativeness of the firm and which do not. This paper focuses on the conceptual basis and derive propositions on the nature of innovative suppliers: specialised, technically competent, export-oriented firms, located in the proximity of the buyer, being embedded in a trusted and intensive relationship are identified as having a higher probability to be the core innovative suppliers. These criteria can serve to refine strategic sourcing decision and improve communication between engineering and purchasing professionals.