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Public sector innovation and smart specialisation strategies

Written by Claire Nauwelaers

Reviewed by David Walburn


The concept

How to implement it?

Good practice

Public sector innovation and smart specialisation

What can be expected?

How to support public sector innovation?

A quote


Expert's comments


The concept

Public sectorinnovationrefers tothe introduction of new approaches to provide quality public services and better responses to society’s needs” (OECD Observatory of Public Sector Innovation). This concept involves three important components:

  • Novelty (and not merely change);
  • Implementation (and not just an idea);
  • Utility (for society, beneficiaries and the public sector itself).

Public sector innovation differs from “normal” activities in the public sector (Bason 2010):


Public Sector innovation can take different forms (Windrum 2008):

  • Service innovation: new or improved service;
  • Service delivery innovation;
  • Administrative and organisational innovation;
  • Conceptual innovation (new views, challenging existing assumptions, e. g. shift from curative to preventive approach);
  • Policy innovation (e.g. innovation voucher schemes);
  • Systemic innovation (new ways of interacting with other organisations and sources of knowledge).


How to implement public service innovation?

Concrete examples of public sector innovations are the following (extracted from Innovation Policy Trendchart 2012):

  1. E-government: e-tax; new digital services; open government; e-health…. In those cases, ICTs are used as a pre-condition for “higher order” forms of public sector innovation: ex. Digital ID cards for citizens (Estonia); Open data “decision map” (Ireland); E-government delegation – interagency coordination (Sweden);
  2. Administrative simplification: smart regulation, administrative simplification (electronic invoice, one-stop shops for businesses…): ex. 165 reduction measures towards a 25% decrease in 5687 information obligations and 561 legal provisions (Austria); Czech Point single contact points for administration (Czech Republic); Ensemble Simplifions web 2.0 Platform (France); Red Tape Challenge + “one-in one-out” domestic regulation (UK);
  3. Public procurement: online platforms, pre-commercial public procurement: ex Central Public Procurement Information System, from e-searching to e-awarding (Lithuania); Ökokauf Wien: towards green procurement in building sector (Austria);
  4. Health and e-health: innovation in the provision of social services, e-health insurance cards, healthcare services at home: ex. Online access to medical records (Malta); Electronic health record (Estonia); Telemedicine for lung diseases , tele-diagnosis for wounds (Denmark);
  5. Social participation and open government: new, more active role for citizens for improving public services delivery: ex. Use of crowd-sourcing for improving public service delivery “Tell us how” platform (UK); Contest “Apps for Germany” for applications using public data; Fixyourstreet open-source online service (Ireland); Total Place pilot cases for reshuffling local public service delivery (UK);
  6. Education: digital technology, online education, international distance learning, new organisational models, new performance measurement systems: ex. Web portal on quality of university of education (Slovak Republic).


Good practice in Public sector innovation

Good practices in public sector innovation point towards an evolution from incremental and internally-oriented public sector innovation, to radical and user-oriented public sector innovation. Notably, more advanced practices in public sector innovation address wider changes in public service governance, rather than « modernisation » (e.g. e-government) only. More radical innovations go beyond improving and cost-cutting in public services, towards creating new, different services with improved outcomes for users.

Good practices also take a demand-driven approach and engage citizens and other beneficiaries into co-creation of innovative public services. The use of design thinking in delivering public services is one way to ensure this user-driven perspective.


Public sector innovation and smart specialisation

There are many reasons why public sector innovation is necessary for socio-economic development of regions and countries:

  • There is a need for more effective use of taxpayers’ money with rising costs for public services (due notably to ageing populations) and rising public budget constraints;
  • There are growing citizens’ expectations on quality of public services;
  • In many countries, the share of public sector in employment and GDP is very high: this generates a need to ensure leverage of its action;
  • New model of knowledge creation and the new role of public sector in quadruple helixes generate a need for more innovative attitude in the public sector;
  • The European Public Sector Innovation Scoreboard depicts a positive correlation between public sector innovation and business innovation;
  • The deployment of more effective business support services (some of them being deliverd by the public sector) is a challenge for RIS3 policy mixes.

RIS3 demands new capacities in public sector, which should act as facilitator of the entrepreneurial discovery process: this is well in line with the learning capacities needed for public sector innovation.


What can be expected from public sector innovation?

The value to be expected from public sector innovation takes different forms (European Commission 2013):

  • Outcomes: better achievement of individual and societal objectives (health, learning, job creation, safety, sustainable environment…);
  • Services: more effective, useful and meaningful services to citizens, businesses;
  • Productivity: enhancing internal efficiency in public organisations, cost savings;
  • Democracy: higher citizen engagement and involvement, more transparency, accountability and equality.


How to support public sector innovation?

The best way to support public sector innovation is to address the following elements, which act as barriers to full deployment of public sector innovation potential when they are absent (and conversely, as drivers when they are present) (Innovation Policy Trendchart 2012):

  1. Internal drivers and barriers
    • Internal innovation culture, openness to divergence and risk taking;
    • Management’s degree of openness to change;
    • Quality of leadership;
    • Incentive schemes (financial, recognition, awards…), definition of performance targets;
    • Flat hierarchy and short decision chains;
    • Organizational structures (working against silos), flexibility in using funds.
    • Practices of co-creation with users;
    • Existence of foreign good practice, role models;
    • Pressure from citizens, businesses for improved services;
    • Increased demand for new solutions to complex problems.
    • Budget constraints (which may act as both barriers and drivers);
    • Political support;
    • Changes in laws and regulations.
  1. External barriers and drivers
  1. Political barriers and drivers

The following concrete actions can be deployed to promote public sector innovation (NIFU STEP 2006):

    • In-house learning strategies and skills improvement in public administrations: training, lateral working groups (to avoid the silo problem), interactions with external experts, mobility, international experience, participation of external networks, learning platforms, open recruitment policies (avoiding clone problem), support to entrepreneurs/innovators, awards;
    • Redefinition of missions and new functions descriptions, setting targets, reviewing organisational models to promote innovation-friendly culture (risk taking, experimentation, evaluation…);
    • Support to communication, diffusion, replication, upscaling of public sector innovation initiatives and international policy learning platforms;
    • Measuring public sector innovation and performance: the European Public Sector Innovation Scoreboard displays 22 indicators under 7 categories (there is no aggregated index).


A quote

"If you continue to do like you always did, you will get what you always got." from Diarmuid McLean, Director of Economic Policy Division, Department of Enterprise, Trade and Investment, speaking at the International Workshop “Public Sector Innovation and S3”, Smartspec project, Belfast, 10 December 2014.



  • Bason, C. (2010), Leading public sector innovation: co-creating for a better society, Bristol, Polity Press.
  • European Commission (2013), Powering European public sector innovation: towards a new architecture, DG Research and Innovation Expert group on Public Sector Innovation, Brussels.
  • European Commission (2013), EPSIS European Public Sector Innovation Scoreboard, Brussels.
  • Inno Policy Trendchart (2012), Trends and Challenges in Public Sector Innovation in Europe, Brussels.
  • NESTA (2011), Innovation in Public Sector Organisations, NESTA Report, March.
  • NIFU STEP (2006), PUBLIN: summary and policy recommendations, report to the European Commission.
  • OECD (2012), Public sector innovation, in OECD (2012), OECD STI Outlook, OECD Publishing, Paris.
  • OECD Observatory of Public Sector innovation, www.oecd.org/governance/observatory-public-sector-innovation.
  • Pro-Inno Europe (2010), Mini Study 10: Innovation in the public sector, INNO-GRIPS, European Commission.
  • Windrum, P. and P. Koch (2008), Innovation and entrepreneurship in public services, Edward Elgar, Cheltenham.


Mrs Claire Nauwelaers


Independent expert in Science, Technology and Innovation policy, Advisor to the OECD and the European Commission

Claire NAUWELAERS is an independent Policy Analyst and Governmental Adviser, specialised in research and innovation policy, working in an international environment. She has 30 years of experience in this field and a wide network of contacts with experts, academics and policy-makers. Until 2011 she was working on innovation as a policy analyst in the Regional Development Policy Division at OECD. Previously, she was Research Director at UNU-MERIT, the University of Maastricht and United Nations University, in charge of the research team: “Governance of Science, Technology and Innovation». She started her career as researcher within two academic teams (the Interdisciplinary Centre in Regional Development, and the Interdisciplinary Centre Law-Economics) at the University of Louvain in Belgium, where she was in charge of research projects dealing with economic development and innovation.

Her main areas of research and expertise revolve around the analysis and policy advice about the functioning of research and innovation systems, notably at the regional level. She is working on policy development, analysis and evaluation in the areas of Research, Technological Development and Innovation in response to needs from the European Commission, national and regional authorities. She is currently one of the leading experts in Europe on Smart Specialisation Strategies. She is member of Scientific Steering Committees of several Research Networks, part of policy review teams, and is regularly invited as expert in High-Level Expert groups for the European Commission or Member States. She has published numerous books and articles on policy aspects of research, technology and innovation.



Expert's comments

This is a very valuable paper and should provoke more thought about the role which the public sector can play in driving innovation.

In these times of continuing austerity in the public finances, the public sector can often find itself in an uncomfortable position. The neoliberal consensus may denigrate the role of the public sector and push policy in the direction of greater outsourcing, delivery of more services by the commercial sector, and lead to an attitude which sees the public sector as part of the problem and hardly ever part of the solution. On the other hand, with public expenditure squeezed, government has to increasingly rely on the ingenuity of the public sector to find ways of maintaining levels of service with fewer resources, as well as helping to tackle the new challenges which government faces as a result of falling living standards and lack of economic growth. The paper rightly draws attention to importance of leadership in the public sector if its potential in these matters is to be realised. This requires political leadership as much as leadership from within public sector bureaucracies, a combination which is not often achieved these days.

It is therefore particularly incumbent on commentators who understand and appreciate the value of the public sector contribution to economic development policy and delivery to the fore. This paper achieves this very well. 


Mr David Walburn


After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.