We see innovation in action every day in our lives. Whether its
listening to music on a cell phone, or taking the latest medication
to help tackle an ailment, our lives are better and easier as a
result of innovative products and services. Plus, innovation is not
just about improving technologyStarbucks has transformed the
experience of drinking coffee, and Walmart has altered the face of
retailing beyond recognition.
Most of us think innovation only occurs in the private sector.
Thats hardly surprising since private-sector innovation accounts
for more than 85 percent of the United States growth in
productivity, according to Nathan Rosenberg, a professor of
economics at Stanford University.
But innovation is needed just as much in the public sector as we
struggle to find solutions to both new and old problems. It is
especially needed in information technology. A tighter fiscal
environment heightens the need for innovation. With less money in
their budgets, agencies must find cheaper ways to achieve better
outcomes on 21st century problems such as climate change and
childhood obesity and on such age-old challenges as
underachievement in high schools or veterans homelessness.
Why do government agencies find innovation so challenging? What is
it about the DNA of government that makes it more difficult to
experiment with new ways of doing things and to invest in those
ideas that are most likely to have transformative potential?
Rewarding or Risk-Averse?
The private sector offers strong financial rewards for innovation,
but the public sector can be risk-averse, discouraging new thinking
among its employees. New ideas almost always involve some riskand
many in the private sector see risk as a necessary precursor to
But if something fails in government, political leaders and staff
know they are likely to be questioned about wasting funds. Often
the real incentive in government is to keep doing things in the
proven and safe wayeven if that means better, more efficient
methods are never identified.
Budgets Dampen Desire
The way money is allocated to public-sector organizations can
dampen the desire to innovate. The budgeting and appropriations
process focuses on programs that are shrinking or growing, while
little attention is paid to the stock of programs that form the
Programs with limited efficacy that fly below the radar are often
left alone, so it can be easier as a program manager to maintain
funding for the status quo than to devise better ways of running a
Political leaders are encouraged to push for ideas that are popular
with voters, sometimes at the expense of less visible but more
effective solutions. Politicians know how to get headlinesand they
realize that voters like things they can see or feel.
Even if the best way to reduce crime is to invest in a better IT
system, for example, there will always be pressure to invest in
more police officers. And even if the best way to improve education
is to build a better evaluation system for teachers, parents will
often push for smaller class sizes.
Just Turning the Gears
Public-sector culture often rewards people for turning the gears of
bureaucracy rather than improving the overall machinery. Government
agencies display a strong culture of this is the way things are
done around here, especially in functions that serve citizens or
Private firms often feel they need to provide a constantly
improving service to retain their customer base, but government
agencies are normally insulated from competition. Also, strong
labor rights can reinforce cultural barriers to innovation because
unions often must ratify even small changes to their working
practices. While the improved job security enjoyed by
union-protected workers can help raise morale, it may also reduce
their incentive to innovate.
Government promotions rarely reward innovative staff. Government
agencies value staff who excel at handling political crises,
crafting documents that win headlines, or steering relations with
These tasks are important, but they are not skills that focus on
improving outcomes for society or citizens. Its hardly surprising,
then, that junior workers think that if they are to succeed they
should learn the competencies of the bureaucrat rather than apply
the creativity of the innovator.
Collaboration Through Transparency
Outside government, much innovation happens through collaboration.
Academics build on each others work to advance new ideas. So-called
open source innovation where the building blocks of an innovation
are publicly available forothers to build onis increasingly common
in business, especially in the technological field.
Businesses have always looked to competitors for ideas of better
products or services. Yet in government, there is the tendency to
be secretive and develop new products in-house. Despite all the
talk of transparency, few agencies have any real desire to work
with outsiders to develop better solutions. Many agency leaders
talk about the importance of their agency becoming more innovative,
and think that words alone will lead to a culture change.
Unfortunately, that is not the case. Words do little to alter the
incentives in the public sector, and as a result, little innovation
emerges. Its time to pull down the barriers and open the avenues to
Each agency needs a comprehensive plan to address and overcome
these barriers to innovation. The plan should seek to replace the
current anti-innovation culture in agencies with one that promotes
innovation. In the next issue of The Public Manager, we will set
out our practical tips for agency leaders who want to develop a
plan to build a pro-innovation culture.