European Commission, (2013), “Powering European Sector Innovation: Towards a New Architecture”, Report of the Expert Group on Public Sector Innovation.
In the midst of a fragile economic recovery across the European continent and stressed public finances, many governments are faced with long-term issues such as ageing societies, mounting social security and healthcare costs, high youth unemployment and an outdated public service infrastructure that lags behind the needs of modern citizens and businesses. The ICT driven explosion of new business models, geographical dispersion of production and social media are also challenging the way governments operate and, above all, how they are perceived. Research has shown that the public sector has been fostering innovation in the private sector, from smaller innovations to more radical ones like railroads and the Internet. The public sector provides both funding to private companies and develops key technologies itself, like nanotechnology, by investing in the early stages of these technologies when uncertainties are too high for private companies.
In addition to the public sector’s role in catalysing innovation in the wider economy, there is an urgent need to power innovation within the public sector itself in order to unlock radical productivity improvements and efficiency gains, to foster the creation of more public value and a better response to societal challenges. Innovation in the public sector, the focus of this report, can be defined as the process of generating new ideas and implementing them to create value for society, covering new or improved processes (internal focus) and services (external focus). It takes on a variety of forms, ranging from smarter procurement, mobilising new forms of innovation financing, creating digital platforms and citizen-centric services as well as driving a new entrepreneurial culture among public managers.
A new vision for the public sector is required, whereby public managers become public entrepreneurs. This can only happen through a pervasive change of mindset, with more experimentation, controlled risk taking, and an agile and personalized response to new constituent challenges. This will help unleash the potential of an innovative public sector, which can be transformed into a much needed growth engine for the economy.