Ready or not: Taking innovation in the public sector seriously

The public sector is often poor at innovation from within, and poor at learning from outside. It contains many innovative people but isn't good at harnessing their talents and imagination.

According to conventional wisdom, public organisations cannot innovate. Bureaucracies lack the competitive spur that drives businesses to create new products and services.

Their rules squeeze out anything creative or original. Their staff are penalised for mistakes but never rewarded for taking successful risks. So while business develops new chips, iPods, airplanes and wonder drugs, the slow and stagnant public sector acts as a drag on everyone else.

This account is commonplace. But it is at odds with the history of innovation. Two of the most profound innovations of the last 50 years were the Internet and the World Wide Web.

Both came out of public organisations: DARPA in the first place, CERN in the second. Looking further back, business was not particularly innovative for most of human history, at least until the late 19th century. Instead, the most important innovations in communications, materials or energy came from wealthy patrons, governments or from the military.

The idea that businesses and markets are powerhouses of innovation, or 'innovation machines' to use William Baumol's phrase, is a very recent one.

Even today, the caricature of public agencies as stagnant enemies of creativity is disproven by the innovation of thousands of public servants around the world who have discovered novel ways of combating AIDS, promoting fitness, educating, vaccinating vast populations or implementing new methods like intelligence-led policing or auctions for radio spectrum.

Published
April 2007

Author
Geoff Mulgan

Report
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