Academic journal article Innovation: Organization & Management

Public Sector Innovation Research: What's Next?

Academic journal article Innovation: Organization & Management

Public Sector Innovation Research: What's Next?

Article excerpt


It is conventional to begin any account of public sector innovation by declaiming its poor innovation performance vis-à-vis the market sector, as in most government and consultancy reports (e.g., Moran 2010), or retorting that the innovative performance of the public sector is widely misunderstood and is actually more innovative than commonly credited (e.g., Mulgan 2007). There is truth in both perspectives. But we want to advance a different approach here by re-asking some basic questions about analysis of innovation in the public sector. Our argument will be critical of much extant public sector innovation research and analysis for implicitly framing the problem as: (a) that of how to be more like 'the free market innovation machine' (Baumol 2001, cf. Rolland 2005); and (b) that the solution lies in identifying and imitating 'best practice' (Eggers and Singh 2009). We will argue that both presumptions are flawed and have misdirected much thinking about the nature, challenges and opportunities of public sector innovation.

A better model for public sector innovation may be the scientific experimental method. The challenge should be seen to be the discovery of what mechanisms actually work in achieving innovation goals in the public sector - for these are not prima facie obvious and although market sector mechanisms and best practice may suggest possible mechanisms, there is good reason (as we will explain, from the perspective of economic incentives) for these mechanisms to substantially carry over to the public sector organizations. Econometric analysis on survey samples can take us some way, but a better way to test the efficacy of various mechanisms is suggested here by using an experimental method based on the protocols of experimental science.

The experimental approach does have its champions and is certainly not unrecognised in public sector innovation literature. Most reports or audits of public sector innovation contain it as one of the many recommended actions, particularly in regard to evidence-based policy (Leicester 1999, Davies et al. 2000, Sanderson 2002, Leigh 2005, Staley 2008, Banks 2009). Typically, however, such an approach is acknowledged and presented as just one of many 'actionable items' for 'strategic implementation'. But an experimental approach should be the prime focus of public sector innovation theory, analysis and policy (Stoker 2010). This introduction will review the analytic context of public sector innovation and present the case for a more experimental approach. An overview of papers in this volume, along with discussion of how this experimental horizon can be seen as the next step beyond the conventional case study and cross-sectional econometric style of analysis, thus concludes.


Readers of this journal know that innovation refers not simply to something new, but rather to a micro and macro dynamic process by which agents, organizations, institutions and the macro structure of the economy are transformed by the effects of a novel idea, however embodied. This is the Schumpeterian definition of innovation as new products, services, connections, processes, business models, markets or sources of supply that provide a competitive advantage to an organization. An excellent introduction is Dodgson and Gann (2010). From the systemic perspective, innovation refers to a process of economic dynamics that unfolds as a three phase trajectory (Dopfer and Potts 2008). First origination, in which an entrepreneur introduces a new idea (risk is carried by financiers). Second adoption: the individual process driving market selection thus causing differential growth of firms due to differential consumer market adoption. Third retention, as the habituation, organizational embedding and institutionalization of the novel idea in the economic system. Schumpeter (1942) viewed innovation as the basic dynamic mechanism of market economy growth and development in a process he called 'creative destruction'. …

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