Innovation Is Important To The Public Sector, Too

Innovation is one of those concepts that everybody loves, but few really understand. It is one thing for a company to set out in its mission statement — as many do — that it aims to innovate and quite another for it actually to deliver on it. But if it is hard for businesses to make a decent stab at innovation imagine how tough it must be for public-sector bodies.

However, this is not a challenge governments can afford to shrink from. Not least because, for all the attempts of Silicon Valley entrepreneurs and others to present themselves as free spirits, many of the technological developments with which we are now highly familiar have their origins in publicly-funded research. So it makes sense for governments to invest in this way to lay the foundations for future prosperity.

The realization that innovation has an important part to play in the public sector is not new. As long ago as 1998, the National Endowment for Science, Technology and the Arts was established by the U.K. Government with National Lottery funding in an effort to tackle the country’s failure to capitalise on its well-known talent for innovation and invention. As the organization, now known as Nesta and an independent charity, puts it on its website, the U.K. “was, in short, bad at turning inventions into marketable applications.” A report it produced in 2014 set out the obstacles that needed to be overcome if the public sector was to become better at creating, improving and adapting. Sadly, elements of it are eerily similar to parts of a report just produced by PA Consulting, an international management consultancy that is so immersed in innovation that its branding reads “bringing ingenuity to life” but which also has a long history of working with the public sector.

The report, The Innovation Opportunity, is based on analysis carried out for the U.K. Government that drew on 150 research reports and White Papers and input from more than 100 innovation experts as well as findings from the firm’s global survey of more than 500 senior executives and other innovation leaders in the private sector. While focused on the U.K., the study offers broader lessons for public sector leaders more generally, its authors argue.

The key finding is that “the flow of national innovation” is stopped by “three missing ingredients” that create three calls to action for public sector leaders to enable what is termed Innovation Diffusion and Adoption (IDA). These are:

1. Find inspiration from deep need. Governments need better connect innovations to local demand, by essentially taking a “supply chain” approach and having a clear mission and the skills to deliver.
2. Put inclusion at the heart of every innovation. This involves creating and supporting diverse teams, prizing collaboration over competition and providing support for innovators.
3. Iterate for success. This requires involving end users earlier in the process in order to gain feedback, dropping expectations of perfection and reframing what successful IDA looks like.

In an interview, Shaun Delaney, global head of public services at PA Consulting, said that the public sector had two roles. The first was driving innovation on behalf of the country as a whole. The second was realizing that the public sector accounted for a significant part of GDP and therefore had to apply the principles to itself — recognizing, of course, that there were certain constraints, such as the greater scrutiny attached to government activities, less appetite for risk and the complexity involved in managing a range of stakeholders.

Accepting that the idea of innovation had been “bandied around for some time,” he said there were signs of more action. For instance, there was now a branch of government — the Department for Science, Innovation and Technology — with the word in its title and there were attempts to build innovation ecosystems, for example, around Freeports and university science parks.

Perhaps more important, he pointed to the rapid roll-out of the Covid-19 vaccine as an example of what could be done when there was a “clarity of objectives.” Acknowledging the challenges involved in “breaking down silos” within government, he said there was a role for leaders in “brokering a win-win for everybody.”

One of the frustrations for people like Delaney, who has worked closely with the public sector for 20 years at PA and before that was in the National Health Service and the Civil Service, is that the public sector can actually be more innovative than people think; it is just reluctant to talk about it. This is partly a result of a national reticence not necessarily shared around the world but also partly caused by not wishing to invite too much public scrutiny for fear that it will be seen as a waste of money.

There is also a view that innovation is all about producing bright, shiny new things and services like those offered by the Big Tech companies when changes to how things are done or improvements to services can be just as, or more, important. The work of the Nudge Unit set up in David Cameron’s government to use behavioral economics to change behavior in such areas as submitting tax returns and picking up litter is a prime example.

It is obviously vital that there is more critical thinking within departments (and across them) and there should also be, as the PA report suggests, a strong link with demand at the local level. But if governments are to play their part in solving some of the biggest questions facing nations — climate change, productivity, inequality, for example — there does need to be what Delaney calls “top-down direction and focus.”