Academic journal article Innovation: Organization & Management

Innovative and Entrepreneurial Activity in the Public Sector: The Changing Face of Public Sector Institutions

Academic journal article Innovation: Organization & Management

Innovative and Entrepreneurial Activity in the Public Sector: The Changing Face of Public Sector Institutions

Article excerpt

INTRODUCTION

The importance of innovation and entrepreneurship from both a macro and micro perspective is widely recognised (Cornwall & Naughton 2003; Timmons 1999). In particular, the Global Entrepreneurship Monitor (GEM) Executive Reports note there is a positive, statistically significant association between national economic growth and the national level of entrepreneurial activity (Acs et al. 2005; Minniti, Bygrave & Autio 2006; Reynolds et al. 2004). This finding is consistent with numerous studies which identify both economic and non-economic benefits arising from entrepreneurial activity. These benefits include increased levels of innovation, productivity, and employment (Longenecker, McKinney, & Moore 1988), creation of value through civic leadership, jobs, and hard work (Ward & Aronoff 1993). It is not surprising then that governments increasingly promote innovative and entrepreneurial behaviour.

Traditionally, the role of government has been viewed as one focused on policy and administration: enacting appropriate legislation and regulations, and ensuring the rules are duly applied and enforced to provide a framework for a stable, progressive society (Moe 1994). Establishing an environment conducive to innovative and entrepreneurial development is generally viewed as the task of government from a macro economic perspective (Moore 1992). The deployment of entrepreneurial behaviour and innovative activity is more commonly seen as being within the private sector domain from a micro economic perspective (Moe 1994). This focus may in part be attributable to the association between entrepreneurship and profitability, typically considered in the context of private sector organisations (Bahaee & Prasad 1992). Further, responsibility for the perceived risks of entrepreneurial activity may well be viewed as being more appropriately assumed by private sector interests, rather than being the prerogative of government organisations established with public funds. Yet, interest in what we might call public sector innovation and entrepreneurship is developing. Governments can, and increasingly do go beyond indirect involvement ('steering') and take a more direct involvement ('rowing'), by undertaking innovative and entrepreneurial activities themselves (Osborne & Gaebler 1992; Savas 1987).

The notion of 'entrepreneurial government' has been used in a number of divergent contexts, often beyond the traditional scope of entrepreneurship (Bellone & Goerl 1992; Moon 1999; Shockley, Frank & Stough 2002). Despite the promotion of innovation and entrepreneurship within government, however, debate on government's role of rowing versus steering (Osborne & Gaebler 1992; Savas 1987) prevails. And while success within state-owned enterprises (SOEs) has been noted in countries such as New Zealand (Hood 1995), contention over corporatisation versus privatisation continues to resurface.

Accordingly, the focus of this paper was to examine the potential for innovative and entrepreneurial activity in public sector organisations such as SOEs, and investigate the elements which support such activity. Specifically, we considered the nature of innovative and entrepreneurial activity in SOEs and what are the drivers and facilitators of such activity in a public sector context? In particular, drivers were considered in terms of those elements which influenced the undertaking of innovative and entrepreneurial activity. Facilitators were evaluated in terms of elements which aided or supported such activity, providing a valuable foundation (Koch & Hauknes, 2005). This paper is structured as follows. First, a review of the literature on innovative and entrepreneurial activity in a public sector context is undertaken, together with a more strategic approach to such activity. The research method follows. Illustrative case summaries are then presented of innovative and entrepreneurial activity in three separate SOEs. …

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