Blog: Innovation in the public sector is particularly challenging, both for governments and for providers - why?

Blog: Innovation in the public sector is challenging, both for governments and for providers – why?

 

Clementine Vandeleur, Deputy Director, 3rd December 2017

 

Innovation has been prolific in the B2C and B2B spheres, often driven by entrepreneurial thinkers whose business models have harnessed the power of technology, information and the network effect of the consumers they reach. Further, enabled by organisational flexibility and access to private finance, they have been able to test, trial and then scale new business models at pace, often without the pressures of having to make short term profit or deliver on their missions with immediate effect.

Innovation has not just changed the status quo over the last decades, innovation per se has become the status quo and as a result it has raised the expectations of citizens in all aspects of their lives. It is widely realised, consciously or subconsciously, to have brought a world of opportunity (as well as disruption) that can drive greater meritocracy, increased standards of living, and perhaps offer whole systems change for the better – in how we govern ourselves, resource ourselves, and even where we might live.

However, the environment that innovation thrives in is often quite different from that in which governments and government service providers have to operate, making transformation at pace particularly challenging in the public sector. The often unavoidable realities of fiscal pressure, short political tenures, large and inflexible organisational structures, siloed budgets, purchasing bias towards lowest cost services, low tolerance for risk, and distractions of momentous foreign policy decisions, not to mention having to tackle some of the most complex societal challenges, does not lend itself well to enabling the transformational change in public services that citizens have come to expect and value elsewhere in their lives. However, what this does mean is that the opportunities for transforming public services, at the scale that the private sphere has so far demonstrated, are enormous should they be approached in the right way and made achievable.

Unavoidable drivers for change

This is not just idealistic thinking, rather it is a necessity given the drivers of social, economic, and political change make citizen needs ever more complex. Ageing populations, migration flows, the rise of cities and the decline of rural populations, displacement of work, and increased crime (including cybercrime) place further stress and strain on existing public services, making transformation, both in the way services are delivered and what services are delivered, a burning priority. 

So we need new approaches and fresh thinking to create the environments which enable innovation to be developed in the public services that governments currently provide and purchase, but also to enable the next generation of public service solutions to flourish. This might mean overcoming the artificial divide between one sector and another, and between commissioners and providers, so that they can work together to build services that drive societal outcomes; or rethinking purchasing behaviours and payment mechanisms so that providers have margin to innovate; or using completely new models of delivery and financing. There are many areas and approaches to explore. 

Through the Serco Institute, we seek to answer some of these questions to enable innovation to work better in the public service sphere. We aim to do this through engaging with as many different voices from across the public, charitable and private spheres - from academics, technologists, start-ups, outsourcers, procurers, policy makers, charities and social enterprises - in order to test and trial public service innovation and thinking free from the inherent restrictions that hold it back.

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