Academic journal article The Innovation Journal

The Relationships between Innovation and Human and Psychological Capital in Organizations: A Review

Academic journal article The Innovation Journal

The Relationships between Innovation and Human and Psychological Capital in Organizations: A Review

Article excerpt

ABSTRACT

The article by Geoff Mulgan (2007) entitled "Ready or not? Taking innovation in the public sector seriously" points out how it is difficult for public organizations to innovate. It also states that innovation in the public sector is more likely to happen if people with their ideas, skills and competences are taken into due account. Starting from these considerations, the paper provides an overview of the concept of innovation and its relationships with the concepts of human and (positive) psychological capital. Through literature related to business, management and applied and organizational psychology, the article starts by defining closed and open innovation, goes on to show the role that human and psychological capital can play in organizational innovation and concludes by reviewing the latest list of competences that research has identified as necessary in open innovation teams. This review will be useful to researchers and practitioners in their respective activities, including the public sector.

Keywords: Closed and open innovation; human capital; positive psychological capital

Introduction

The paper starts from the article published by Geoff Mulgan (2007) entitled Ready or not? Taking innovation in the public sector seriously. It points out how it is difficult for public organizations to innovate, given their size and their lack of flexibility, and how open innovation in the public sector may be even harder to achieve than closed innovation. Innovation in the public sector is more likely to happen if people with their ideas, skills and competences are taken into due account. The paper provides an overview of the concept of innovation and its relationships with the concepts of human and (positive) psychological capital, with the hope that it will be useful to researchers and practitioners in their respective activities, including the public sector.

The concept of innovation

According to the Oslo Manual published by OECD1 (Organization for Economic Cooperation and Development) and Eurostat in 2005, innovation is the implementation of a new or significantly improved product (good or service) or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations.

The OECD (2011) distinguishes four forms of innovation:

1. Product innovation, the introduction of a good or service that is new or significantly improved in terms of its characteristics or intended uses;

2. Process innovation, the introduction of new or significantly improved production or delivery methods;

3. Marketing innovation, the implementation of a new marketing method with changes in product design or packaging, product placement, product promotion or pricing;

4. Organizational innovation, the implementation of a new organizational method in the organization's business practices, workplace organization or external relations.

As Glor (1997) states, many definitions of innovation are used, often leading to a lack of clarity about what public sector innovation means. According to Mulgan (2007), in the public sector innovation can mean new ways of organizing things (such as public private partnerships), new ways of rewarding people (such as performance-related pay) or new ways of communicating (such as ministerial blogs). Distinctions are sometimes made between policy innovations, service innovations and innovations in such fields as democracy (e-voting, citizens' juries) or international affairs (prepayments for new vaccines or the International Criminal Court). Quoting Zhuang (1995), Glor (1997) underlines that innovation can mean (1) Unique and new activities or ideas; (2) The people who innovate; (3) Improving existing processes; (4) The dissemination of new activities or ideas.

Van der Meer's (2007) synthesis suggests that innovation is the total set of activities leading to the introduction of something new resulting in strengthening the defendable competitive advantage of an organization, while the Oslo Manual specifies that innovation can be new to the organization (it may have already been implemented by other organizations, but it is new to one specific organization), new to the market (an organization is the first to introduce it in the market) and/or new to the world (an organization is the first to introduce it for all markets and organizations). …

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