Australian Innovation Research Centre

Innovation in the Public Sector

Associate Professor Jack English says, “Since public sector organisations represent the interests of so many people and are entrusted with a variety of socially important tasks, public sector innovation can potentially result in an equivalent or even far greater value than innovation in the private sector.”

Professor Anthony Arundel has been studying public sector innovation surveys conducted by NESTA in the UK and MEPIN in Scandinavia, and has been actively involved in a large survey for the European Commission. He says, “One clear result that is emerging from these surveys is that the public sector appears to be more innovative than the private sector, in terms of the percentage of entities that innovate. The public sector has also been a leader in some uses of technology, such as the use of online forms, which were implemented by several governments in the early years of the internet. Furthermore, despite the general perception that the public sector doesn’t innovate because it is risk adverse, preliminary results from this research shows that this may not be true.”

What we aren’t clear about is the factors that motivate public sector organisations to innovate. Policy probably drives much of the innovation in this sector, but there are also other mechanisms, such as suggestions from users of public services and ideas developed by staff, says Professor Arundel.

Innovation in the public sector differs from that of the private sector in both scale and complexity. Associate Professor English says that public sector innovation is often categorized into three broad types:

  • Incremental innovation covers the vast majority of public sector innovation. Although this represents only minor changes, they are critical as it allows continuous improvement.
  • Radical innovation occurs less frequently than incremental innovation. It consists of new ways of doing things in terms of organisational processes or ways of looking at problems. Even though radical innovation does not alter the overall dynamics of an organisation it can considerably improve performance.
  • Transformational innovation is rare. It allows changes such as new types of organisations or fundamental changes in the relationships within and between public sector organisations. Typically, these innovations take a great deal of time to reach their full potential, as they require major changes to organisational social and cultural arrangements.

Even though the public sector can and does innovate, many good ideas may nevertheless get lost because there is no clear pathway for individuals with good ideas to be heard. “Despite the fact that innovation is a popular concept in the public sector, too many people are not participating because they are process-orientated. It’s as much about the culture as it is about the ideas,” says Associate Professor English. To help identify new ideas with genuine merit within the public sector he has adapted his highly successful private sector development tool, the Innovation Development Early Assessment System (IDEAS), to the public sector. “It is a framework that sharpens their insight to decide whether or not they want to champion a project,” says Associate Professor English.

Monitoring innovation in the public sector can also be a challenge, as the role of political decision-making can mask any results. “Every time a new government comes into power they may change processes and organisations without necessarily having any continuity or positive benefit. We need to be able to separate that effect from innovation that has come from the bottom up. That’s one of the most difficult tasks with measuring innovation in the public sector,” says Professor Arundel.

By analysing public sector innovation surveys, in particular the European Commission survey of all 27 countries in the European Union, Professor Arundel hopes to gain a better understanding of the dynamics of innovation in this sector. This work, being undertaken with AIRC honorary fellow Professor Paul Robertson, and Dr Luca Casali from the QUT Business School, should lead to one or more publications that will help strengthen the AIRC’s presence in public sector innovation research in Australia and abroad.  Professor Arundel says “Hopefully the survey results will pique interest and challenge preconceptions on how innovation occurs in this important sector. A better understanding of the processes by which public sector innovation occurs will also help managers in the public sector to support and promote it”.