How innovation is different in the public sector

The two key focus areas that differentiate innovation in public sector organizations

There are two key differences in how innovation management works in the public sector compared to in the private sector. The main differentiator is the innovation process approach, the second is the general purpose of innovation. I’ll explain both concepts below.

The innovation process approach in public sector organizations

In general there are two parallel innovation processes to consider in most organizations. One is for the development of new innovations and one is for the adoption of new innovations. These two processes have a lot in common and for the private sector both have to be managed collaterally. Crossan and Apaydin define it elegantly in their scientific review of innovation when they say “innovation is both production and adoption”. By that, they refer to the fact that innovation is not only about creating and developing new innovations, it is also about finding and adopting new innovations and to integrate them into products, services and businesses. And since public organizations rarely have production units to create innovations and launch them to a target audience, the latter is generally the best way to go.

The two parallel tracks of the innovation process


Note that the model I present above is vastly simplified, but the basic principle is that when you have come up with innovative ideas you typically face two options, where one is to scan to find an existing solution to implement into your business, and the other is to develop it yourself. Private firms will have to manage both tracks, but since public organizations don’t invent and produce innovations they have the opportunity to create more streamlined operations. Focus will be on mapping out needs and requirements and then scanning the market for relevant innovative solutions. Simple as pie!

The dual responsibility for innovation in the public sector

Then we have a completely different responsibility in the public sector, and it is that of nations, regions, and municipalities. Apart from improving their own (internal) innovation performance, they also possess the duty to improve the innovativeness of their community – what I tend to call “the dual responsibility for innovation”. These organizations (state-, regional-, and municipal offices) are the only ones who are in charge of amplifying the innovativeness of others. (In a different way than consultants, as you probably understand.) Politicians and officials are responsible for the innovation ecosystem in their community, so it is up to them to assess and improve the innovation ecosystem in order to create more wealth and welfare for their citizens and businesses. The innovation ecosystem is in practice out of their direct control, so they have to define an innovation support system to comfort and boost the innovation ecosystem, and a steering model to advance it.

So for these types of public organizations there would need to be an innovation management strategy to help them define and build their internal innovation management system and innovation performance – and an innovation ecosystem strategy to help them define and build the innovation support system required to make their community prosper.