In 2019, it was estimated that, of 5,000 Nordic start-ups, 10% included solutions that addressed the 17 United Nations Sustainable Development Goals (SDGs). However, many of them struggled to make a profit, especially at the early stages and mostly due to a lack of access to the market and to the right supporters (The One Initiative 2019). Considering this, Nordic Innovation has funded this desk study for mapping barriers and enablers of impact start-ups through public procurement. 

An impact start-up contributes with innovative solutions to a welfare state under pressure. Impact start-ups engage different agents with complementary skills to offer solutions in areas such as the education sector or to provide services and care to vulnerable groups in society (e.g., minorities, youth, and those suffering from reduced ability to work or long-term unemployment). Over the last 3-5 years, several new procurement contracts and financing methods have been developed in the Nordic Region. By identifying main barriers and enablers for impact start-ups throughout the Nordic countries, it is possible to better understand the potential for participation in public procurement processes as well as interactions and funding streams from private investors, both of which can help to sustain start-ups.

This report consists of two sections: The first part addresses barriers to public procurement, enablers for social innovation, and institutional support measures. In part two, we evaluate how Nordic municipalities use alternative financial models such as social impact bonds (SIBs) and public-private partnerships to achieve social impact. The content is developed from the perspective of impact start-ups and entrepreneurs, institutions, public-private partnerships, and impact investors. Each perspective considers the barriers and enablers for impact start-ups according to their spheres of action. By reviewing the existing obstacles and opportunities facing impact start-ups in the Nordic Region, planners and policymakers can improve the legal framework to remove barriers and strengthen existing enablers to help impact start-ups meet societal needs.