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State-of-the art report on public sector innovation

Innovation in the public sector has recently become subject of increased attention by policy administrators and decision-makers, but is still far from being uniformly recognised as either an organisational or societal phenomenon. Particularly within a local (municipal) and regional (NUTS2 or NUTS3) public sector context where innovation can have the most direct impact, policies and administrative procedures are not always predisposed or designed in a way to yield results that would be considered innovative. While in the private sector innovation has long been seen as a source of growth and competitive advantage, the public sector often struggles to perform in new, different ways, also exhibiting a certain degree of confusion as to the desired impact of generated novelties.

The “Complex Challenges – Innovative Cities” Project (CCIC), supported under INTERREG IVC Programme of the European Union and co-funded by national governments, is a joint response to these and related challenges, involving partners from 13 EU regions in 10 EU countries, and focusing on local (municipal) and regional (NUTS2 or NUTS3) administrations and stakeholders.

As a key deliverable to the CCIC project, ARC Fund produced a state-of-the art report on public sector innovation, whose key ambition is to present an overview of how public sector innovation is made possible on the local and regional level within the contexts of the involved project partners. The analysis is based on data collected through an online survey and in-depth interviews conducted with innovation stakeholders – practitioners, managers, innovation planners, policy and decision-makers, civil society leaders.

The report highlights several important trends in terms of how certain characteristics influence innovation thinking, involvement and decision-making. It further provides an analysis of how innovation is being understood in a public sector context, discussing a number of nuances, key opportunity factors, drivers and barriers to innovating and innovation diffusion. Based on stakeholders’ input, the report offers a concise definition of public sector innovation, which reads:

Public sector innovation is the integration of realised novelties or new knowledge into any system dependent on public decision-making towards the enhancement of current, or the introduction into use of new, operations, services and practices, whose final and most evident result is improved public service and enhanced quality of life or a major aspect thereof.

Additionally, proposed are several conceptual models describing the inception and diffusion of innovation within a public sector context.

Also detailed are the existing institutional support mechanisms, which contribute to and encourage public sector innovation. Following the conceptual framework of the CCIC project, particular attention is paid to innovation opportunities related to public procurement rules and procedures; to specific financial instruments used to support or resulting from innovation; to the specific relations with civil society actors; to publicly owned enterprises as specific enablers and diffusers of innovation, and also acting as bridges between public and private sector innovation. Also discussed are policies on a local and regional level, which target the planning and diffusion of innovation within and by local and regional administrations. Finally, some ideas are offered for the strengthening of innovation capacity of the public sector.

The full text of the report is available as a downloadable pdf file here.


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