Open or shut case? Exploring the role of openness in public sector innovation

ABSTRACT

Public organisations are increasingly practising open innovation. Declining budgets, demand for greater participation and growing complexity of today’s social problems are forcing public sector employees to integrate external agencies into their organisational processes. While this eagerness to open up is well-documented, the effects of openness of public organisations on innovation outcomes are not well understood. This article addresses this crucial gap by analysing the extent of involvement of external sources in the innovation process of public sector workplaces and examining the relationship between such involvement and innovation outcomes. The findings suggest that openness and external knowledge is associated with positive organisational returns. Findings also show that public sector workplaces utilise external knowledge to generate product or service innovations, but not to generate organisational process changes.

KEYWORDS:

• Open innovation
• organisational theory
• innovation outcomes
• public sector innovation

Acknowledgements

This research would not have been possible without the financial support provided by the Lee Kuan Yew School of Public Policy, National University of Singapore under the NUS Research Scholarship. I would also like to extend my gratitude to Dr. You-Na Lee and Dr. Mehmet A. Demircioglu for their valuable advice and feedback. I am also thankful to the valuable comments and suggestions by the two anonymous referees.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The dataset analysed during the current study have been removed from the public domain by the Australian Public Service Commission and therefore are not publicly available. The dataset is available from the corresponding author on reasonable request.

Code availability statement

The codes used during the current study to analyze the dataset is available from the author on request.

Supplementary material

Supplemental data for this article can be accessed online at https://doi.org/10.1080/23276665.2022.2116585

Notes

1. This study examines innovation and its effects at organisation’s workgroup level.

2. Product innovation requires introduction of new or novel products for consumers, while process innovation is the “introduction of new methods of production” (Un & Asakawa, 2015). Un and Asakawa (2015) provide 5 dimensions where product and process innovation tend to differ. First, product innovation is associated with novelty and newness, while process innovation is associated with increase in efficiency. Second, for private firms, product innovations lead to price premiums while innovations in process lead to cost reduction. Third, feedback for product innovation comes from markets and consumers while feedback for processes comes primarily from within the organisations. Fourth, the two innovations differ according to the degree of their novelty. While product innovations tend to be radical and different, process changes are incremental. Fifth, product innovations are often technological, concrete, and explicit and can be separate from the organisations while process innovations tend to be institutional, tacit, and located within the existing organisational systems.

3. Here, innovation implies the most significant innovation implemented by the workgroup in the past year (APSC, 2011).

4. Here, quality of work, job satisfaction and working conditions have been classified under working conditions of employees and client satisfaction and client access to information have been classified under improved service value to users. The two combined variables are created as simple averages of their combined values.

5. These include other commonwealth agencies, state/territory agencies, local government agencies, community groups, NGOs, industry stakeholders, Universities and think tanks, unions, outsourced service providers, contractors/consultants, and members of the public. We re-classify other commonwealth agencies, state/territory agencies, and local government agencies as external government agencies.

6. The survey asks the level of involvement of each agency in the innovation process with the answers: “Not important”, “somewhat important” and “Very important”. Responses that are “somewhat important” and “very important” are taken while measuring openness. Hence, if the value of openness is 5, it implies at least 5 external knowledge sources are involved in the innovation process.

7. Results from models with omitting organisational and/or individual level controls do not make any substantive changes to the findings.

Additional information

Funding

This work was supported by the National University of Singapore [NUS Research Scholarship].

Notes on contributors

Shaleen Khanal

Shaleen Khanal is currently a PhD candidate in the Lee Kuan Yew School of Public Policy at National University of Singapore and a Fox Fellow at The Whitney and Betty MacMillan Center for International and Area Studies at Yale University. His research focuses on the drivers of innovation in public organizations. For his dissertation, he is working on complementarities and differences between antecedents of innovation in for-profit and public sector organizations.