Innovation in the Public Sector

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NIFU STEP
University of Haifa
University of Maastricht
University of Manchester
Vinnova, Sweden
Comenius University Bratislava
University of Alcalá
Manchester Metropolitan University
University College Cork
The Mykolas Romeris University

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PUBLIN is part of the Programme for research, technological development and demonstration on "Improving the human research potential and the socio-economic knowledge base,1998-2002" under the EU 5th Framework Programme.

Summary and policy recommendations

Background

One important goal of the Publin project has been to develop a consistent and general basis for the main processes of public sector innovation and policy learning. The overall objective has been to contribute to the knowledge base for the European and national policy development in this area.

Given that the overall objective for public sector activities must be increased welfare and a better quality of life for its citizens, it makes sense to focus on all behavioural changes that contribute to achieving these goals. Hence Publin has defined innovation as deliberate changes in behaviour with a specific objective in mind.

Publin has found that there are a lot of innovation activities taking place in the public sector in the European countries. Even if there is no pressure to generate profit, as often found in private companies, public employees try to improve their ways of doing things. They are motivated by idealism, the joy of creating something new, an interest in the topic at hand, career ambitions etc.

In order to learn and innovate, the actors must interact with others, these being people, organisations or various sources of information. Their ability to innovate is dependent on their ability to find such relevant competences, understand them and make use of them. This means that an innovation policy for the public sector must also be a learning policy for the public sector.

Barriers and drivers

Publin has mapped different types of barriers and drivers for innovation, i.e. social phenomena that hinder or encourage innovation activities in such institutions.

Among the important barriers to public innovation, are the following:

• Size and complexity. The public sector comprises extremely complex and large-scale organizational entities that may develop internal barriers to innovation.
• Heritage and legacy. Public sector organisations are prone to entrenched practices and procedures.
• Professional resistance. There are professional groupings with their own communities of practice, belief systems and perspectives.
• Risk aversion. Public organisations are under the close scrutiny of both politicians and the media, and employees are not normally rewarded for taking risks.
• Need for consultation and unclear outcomes. The large range of stakeholder involvement generates a strong requirement to consult and review any planned changes.
• Pace and scale of change. There have been so many reforms that employees are becoming “innovation fatigued”.
• Absence of capacity for organisational learning. There may be a lack of structures or mechanisms for the enhancement of organisational learning.
• Public resistance to change. Elements of the public might be risk-averse.
• Absence of resources. There may be a lack of financial support or shortages of relevant skills or other support services.
• Technical barriers. There may be a lack of technological solutions to the problem at hand.

Among the important drivers and facilitators for innovation are:

• Problem-oriented drivers. People innovate in order to solve certain problems.
• Non-problem oriented drivers. Innovations may improve on the former situation.
• Political push. Strategic change frequently requires strong, top-down, political will.
• Growth of a culture of review. Assessment practices may stimulate innovation.
• Support mechanisms for innovation. Authorities may implement policy measures aimed at funding and encouraging innovation.
• Capacity for innovation. Public employees have often high levels of professional expertise, creativity and problem solving.
• Competitive drivers. Performance targets may encourage the use of innovative approaches.
• Technological factors. Technological innovation can be a strong determinant for subsequent innovation.
• NGOs and private companies. Models developed by NGOs and private companies may be adopted by public institutions.

Policy recommendations

These are some of the policy recommendations given in the final summary report:

Learning and innovation

Public institutions ought to develop in house learning strategies needed to find, understand and make use of competences developed elsewhere. Public institutions will normally benefit from developing inter- and intra-organisational networking, coordination and cooperation at all levels.

Organisations should develop and use indicators for innovation and organisational performance, most of all because it contributes to the learning of the whole organisation. However, the evaluation of the performance of an organisation must not be reduced to quantitative measures alone; as such measures have a tendency of replacing the overall welfare objectives of the organisation.

Organisations and especially coordinators higher up in the public hierarchy may benefit from developing systematic plans for evaluation of organisations as well as policy strategies.

Innovation and learning on the policy level

Policy institutions should make active use of workshops, sabbaticals, courses and other forms of training. There could be exchanges of employees for limited periods of time, so that policy makers (including both civil servants and politicians) may learn to know other institutions and their cultures more intimately. Furthermore, there may be implemented more radical recruitment policies, in order to avoid the clone problem and in order to get a more even distribution as regards age, gender and educational background.

Institutions should consider making policy learning an obligatory part of work descriptions and employment contracts, and institutions should identify the resources that are to be allotted to such learning.

Both informal networks and high level forums lead to learning and cooperation. However, the informal networks are often vulnerable (linked to a few persons only) and the high level fora often lack the time needed for more in depth discussions and learning processes. One way of improving such communication is to establish ad hoc or permanent medium to low level working groups given concrete tasks of producing policy analysis and recommendations.

Institutions should make active use of international organisations like the EU, OECD and the UN as learning arenas. Moreover, senior managers should invite junior civil servants along on some meetings and conferences, giving them access to the same networks.

Innovation policy organisations have a right to demand unbiased and critical recommendations when commissioning research and analysis. However, research institutions and consultancies should not be understood as “report factories” that produce policy advice on a totally independent and objective basis. Policy learning is often the result of a fruitful interaction between policy makers and policy analysts.

Attitudes, belief systems and entrepreneurship

Policy makers – including politicians – must be aware of the need for new world views and concepts. The battle for innovation and reform is often the battle of concepts and beliefs.

Managers should encourage local entrepreneurs with sufficient vision and determination to push innovation processes through, for instance by giving them funding, responsibility and sufficient freedom.

Public organisations should consider ways of developing a team spirit, giving employees a sense of ownership of the innovations at hand. Internal politics and power struggles often reduce the innovative capabilities of an organisation.

It is important to encourage pluralism as regards different approaches to improving service provision to client groups in terms of allowing many different service providing organisations (NGOs, stakeholder associations, private companies etc.) as they may generate different models and different types of innovation.

Risk aversion

One of the main strategies for overcoming risk aversion is to convince the stakeholders of the need, potential and actual benefits arising from innovation and engage them in consultative and participatory processes and through the demonstration of the utility of innovations. This applies to employees, professional groups and end-users.

Politicians, policy makers and public managers should clearly communicate that there is and must be risks involved in innovation processes, and that there is a difference between mismanagement and the will to take sensible risks.

Objectives

Innovation should have clear and sensible objectives. One should avoid “innovation for the sake of innovation” and pure political and ideological windows dressing.

There will always be a need for “more resources”, so policy makers will have to make some hard choices as regards to where to put public money. One should keep in mind that “public expenditure” can often equally well be labelled as a “public investment”.

Similarly, the “returns” on such investment may be expressed in several ways beyond cost-savings, such as improved quality of life and service provision, electorate satisfaction, increased opportunities for further innovation, etc.

Innovation policy instruments

Policy makers should design structures and systems to promote, stimulate and disseminate innovation in the public sector and between the public, private and third sectors. This applies to traditional research programmes as well as policy measures aimed at encouraging learning and networking.

The European Union should contribute to the development of a broad based “third generation” innovation policy that also encompass the public sector. Such a policy should encourage policymakers to move beyond the technological perspective of innovation and promote the concept of organisational, process and conceptual innovations, to name but three.

It should also aim at improving the coordination of innovation and knowledge policy initiatives between relevant ministries and agencies, as well as the policy learning processes taking place in these institutions.

Indicators for innovation in the public sector

One of the reasons public sector innovation tends to become “invisible” is that we have no proper methods of measuring this activity. Hence there is a need for the development of appropriate measures of innovation activities, performance and characteristics at the micro-level. A key part of this is the development of suitable collection methodologies. An apt framework for this would be to see this in the context of the OECD/EUROSTAT Oslo Manual.

The PUBLIN site is published by NIFU STEP Studies in Innovation, Research and Education. Editor: Per M. Koch, NIFU STEP, Hammersborg torg 3, N-0179 Oslo, Norway, phone +47 22 86 80 21, fax: +47 22 86 80 49.