In Brief | Public Sector Innovation

Innovation can be defined as the generation, selection, implementation, sustainment and diffusion of new ideas. An effective public sector is one that recognises, rewards and nurtures innovation to enhance public performance, particularly in policy development, program design and service delivery. 

The following resources will introduce you to innovation in the public sector. Your feedback is welcome here!

Innovation has been central to many initiatives undertaken by Australian public sector entities.  The 2009 publication of The public innovator’s playbook: nurturing bold ideas in Government by Deloitte and the Harvard Kennedy School and of Innovation in the public sector: enabling better performance, driving new directions by the Australian National Audit Office were important contributions that indicate the growing interest and importance of the topic. Increasingly, governments recognised that innovation is not a tangential activity with limited relevance to their mainstream work, but an activity that is core to being able to achieve key public sector goals.

In 2010 the report Empowering Change: Fostering Innovation in the Australian Public Service was released. This framework document made a number of recommendations about how innovation could be further encouraged in the APS. The APS Innovation Action Plan in 2011 was developed to implement the recommendations of Empowering Change. Recommendations included: developing an innovation consciousness in the APS; building innovation capacity, leveraging the power of co-creation and strengthening innovation leadership. Background to the Public Sector Innovation Project can be found here.

The Public Sector Innovation Network (PSIN) was an outcome of the APS Innovation Action Plan and brings together innovation champions from across the Australian public and academic sectors to engage and support each other to achieve innovation goals. 

The PSIN is open to all, but has been developed for an audience of public sector employees and academics. Network members receive a weekly email with news, developments and events in public sector innovation and design in Australia and overseas. A key activity of the PSIN is the coordination of Innovation Month, which runs across Australia during July each year.  Go to the PSIN Instagram account for some images from this year’s Innovation Month. You can also follow PSIN on Twitter.

Public sector innovation (PSI) units are increasingly being established and commissioned by governments around the world to bring new insights and approaches to policy design and the delivery of public services. Mapping public sector innovation units in Australia and New Zealand: 2018 survey report was conducted by Melbourne University’s Policy Lab to analyse the methodology of PSIs and their role within the broader policy environment.

Public Sector Innovation Month occurs each July with a busy schedule of presentations, workshops and speeches across Australia.  Innovation Month is seen by agencies as an opportunity to either publicly showcase their achievements, or focus on the internal discussion to build their innovation culture through workshop events or a strategy launches.The theme of Innovation Month 2018 was Working Together and the month was launched at an event hosted by IPAA ACT on 3 July 2018.  A video of the event can be accessed here and Martin Parkinson's speech at the event can be found here.

One of the highlights of Innovation Month is the announcement of the Public Sector Innovation Awards – a joint initiative between the PSIN and IPAA ACT. These Awards – which have been running since 2016 - aim to recognise, celebrate and share innovative approaches to public administration in the Commonwealth and ACT Governments. The IPAA ACT website has a rich resource of information about the Awards, including videos of the pitch events and Awards ceremonies since 2016, which showcase innovation across the public sector and  provide a valuable library of case studies for follow-on innovation and research.

Experimentation and learning from successes and failure, is pivotal to public sector innovation.  In his 2015 report Learning From Failure Peter Shergold observes that the private sector is more inclined than government to recognise that mistakes happen, interrogate why they occurred and set in place remedial measures to ensure that they perform better next time. If the public sector is to adapt to rapidly changing environments, experimentation and triallying different options for action can encourage learning by doing. As Shergold says "Success can be demonstrated early. Failure can be addressed fast." 

This is reiterated in a 2019 paper for the APS Review Panel Evaluating and Learning from Failure and Success, which  discusses the evaluation capacity and capability of the APS and how it can adopt a sustained approach to learning from successes and failures. It outlines the need for a cultural shift and an institutional framework that embeds the strategic importance and processes of institutional learning.

In a 2019 paper Transferring and adapting: diffusion of innovation knowledge and lessons the OECD Observatory of Public Sector Innovation (OPSI) emphasises that knowledge diffusion should be embedded into all phases of the innovation lifecycle in order to capture all kinds of learning—including the deeper tacit knowledge that informs future projects within and across contexts. OPSI sees the innovation lifecycle as:

  • Identifying problems: learning where and how an innovative response is needed
  • Generating ideas: finding and filtering ideas to respond to the problems
  • Developing proposals: turning ideas into business cases that can be assessed and acted on
  • Implementing projects: making the innovation happen
  • Evaluating projects: nuderstanding whether the innovative initiative has delivered what was needed
  • Diffusing lessons: using what was learnt to inform other projects and to see how the innovation can be applied in other ways.

Organisations will have “absorptive capacity” if they can absorb new knowledge and thus become learning organisations. Absorptive capacity is arguably the most important differentiator for competitive advantage in the knowledge economy and is a key, if often marginalised, element of public sector innovation.

The term learning organisations was coined through the work of Peter Senge and his associates and encourages organisations to shift towards a more interconnected way of thinking. According to Senge in The Fifth Discipline learning organisations are those “where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together”.

The learning organisation model revolves around five elements: systems thinking, personal mastery, mental models, building shared vision, and team learning. This can be seen as a framework that can guide individuals and organisations in their approach to learning for innovation, but can be challenging with the hierarchical nature of public sector organisations, where information is jealously guarded (and sometimes rightly so, to protect the confidentiality of their service users) and where the culture has been one of professional dominance rather than openness.

The 2019  APS Review identified dynamic ways of working as a key priority for change in the federal public service. This requires a focus on a culture of collaboration and adaptive teamwork, which also underpins innovation. Collaborative Innovation in the Public Sector by Jacob Torfing gives 5 reasons why collaboration drives innovation. These all centre on the dissemination and absorption of new knowledge and ways of thinking when people with different ideas, views and life experiences come together.

A 2019 survey commissioned by the Australian and New Zealand School of Government (ANZSOG) found that public servants are eager to embrace skills for innovation but receive inadequate training in them. Knowledge of new ways of working far outstrips practice. To reverse this, an ANZOG report builds on the results and argues that governments must train public servants to become “public entrepreneurs” who tackle problems using innovative, data-driven, and participatory methods, and who are comfortable with risk and even initial failure in pursuit of outcomes that improve the lives of citizens.See also an associated article in The Mandarin.


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