Public Sector Innovation Conference

1. Public Sector Innovation Conference Break out Group Notes

2. Building Block 1 – Innovation Investment • Majority acceptance that this approach to a knowledge production function for the public sector would be a useful element of an overall picture for the economy, complementing the work already undertaken in the UK and other countries for the market sector. • The categories of expenditure on intangible assets covered in the market sector growth accounting models should usually be identifiable for the public sector. These include R&D, Design, own account software, own account training, spend on ICT and organisational capital. • Some discussion of how training investment for innovation could be identified. Possible proxies include training directed to a qualification or the use of e.learning.

3. Building Block 2. Micro –Measurement (1) • Group discussion focused mainly on Block 2 - Micro measurement Definitions of Innovations • The wording of definitions will be important. • If respondents are not really aware of whether they are innovating or not (or essentially do not consider their organisation as 'innovative'), they may have difficulties in identifying with the definitions. • This could motivate examining whether responses/conceptualisations are different when leaving the word 'innovation' out of descriptions. • Does the number of innovations make sense as an output measure? How do you distinguish innovative organisations? • One possibility is to look at other aspects of innovation activities - how conscious are organisations of their innovative activities? What are the conditions for innovations?

4. Micro-measurement (2) • This led into a longer discussion of what characterises an innovative culture, or the process within organisations by which innovative ideas are created, grown and diffused. And,being able to identify this process was deemed to be very important if we are going to be able to capture how organisations innovate. Among the elements discussed were: • Allocating time and resources towards innovation, thinking new ideas, and learning¨ • having a person or function in charge of spreading innovations • Conscious framework for the innovation process • plans for how innovations are disseminated • culture for failure • Encouraging new ideas • process for growing ideas • 'Enablers', or managers that are responsible for 'championing' innovation projects and pushing them forward • Targets and goals for innovation • However, in attempting to measure 'innovative culture', it is important to avoid trying to impose a single model on all organisations. The questions used to capture this need to be very neutral or generic. Furthermore, it would be very useful to also draw on information from employee level surveys, to get their views of the organisation and focus on innovation at their place of work.

5. Micro-measurement(3) Definitions • Scope: begin with 4 types from Oslo Manual, but might need to regroup some or change names (e.g. should we speak of ‘communication’ innovations in the public sector instead of ‘marketing’?) and reflect on what sort of data we would consider collecting for each one (e.g. we may wish to collect expenditure data on all types, but data on impacts might be difficult to find for some) • Need to reflect whether any kinds of innovations which might be specific to the public sector could fall outside the scope of these 4 types • Concept of ‘system’ innovation which would encompass change across organizations: how to define it? Can we measure it? Objectives • Take advantage of existing work measuring the efficiency of (or targets for) public bodies (e.g. UK National Audit Office list) • Revisit list of objectives in Oslo Manual and add others specific to public sector or adapt them (e.g. equity, cost-efficiency of public spending) taking into account context/drivers (e.g. citizen-centered services) • Citizens may have high expectations from public services due to what’s now available from private sources (e.g. interactivity, responsiveness)

6. Micro-measurement (4) Obstacles • Focus on main differences: incentives, cultural factors, legal obligations/constraints • How to measure whether organizations have an ‘innovation-friendly’ culture and collaboration capabilities? • Take into account inherent risk aversion à need to experiment (and fail) in order to successfully innovate • Careful with subjective questions in surveys which might produce very different results depending on who replies (e.g. managers  vs. employees), 2-tier surveys? Linkages • Even more important than for private sector innovation • Extend Oslo Manual framework to better capture public/private partnerships • Importance of different instruments which can be used by government bodies to promote/introduce innovation • Consider the role of public procurement and of the 3rd sector • Centrally imposed (top-down) vs. ‘organic’ (bottom-up) innovation

7. Building Block 2 – Micro-measurement (5) • It was thought that an important part of developing a metrics framework would be feedback of results to the bodies and staff concerned, to help engage interest and commitment. • And use metrics and impacts to help spread best-practice in the procurement of innovations and innovative procurement. • On defining innovation, it was suggested that defining the characteristics of an innovation culture would be important, since that would not be so naturally present as in the market sector. • On a framework for data collection, it was generally accepted that a core generic guide, along the lines of the Oslo manual, would be useful, but this would need supplementary sections specific to the main public sectors. • A framework would need to be capable of picking up “bottom up” initiatives, not just national effort such as E.Government. • On units of observation, we should look for some form of standard unit concept, along the lines of the “enterprise” used in the Oslo manual, based on a substantial degree of autonomy. This might be eg the environmental services section of a municipality, but could be individual schools or hospitals. • A partially standard unit should be relatively persistent across time, in the face of sweeping reorganisations of government structures.

8. Building block 3: output and impact measures • It is important to define at what level impacts can be measured, whether at national, local, programme or project level, as this will have implications for measurement. • Innovation in the public sector can potentially impact on a very wide range of areas. It can make people healthier (eg a new NHS screening programme) or better educated (use of ICT in schools) but also increase equity and efficiency (eg introducing a knowledge management system can help addressing issues of gender and ethnic access to public services), or decrease environmental impact of public services (eg: e-government) • Quantitative measures of impacts are important in all areas of public policy and should be used to inform new policy: they are helpful in addressing accountability, for benchmarking (nationally and internationally) and justify intervention within government and with citizens.

9. Building block 3 cont. • In deciding whether it is better to focus the data efforts on specific sectors or to design measures that are comparable across public sectors it is important to take into accounts the trade off between comparability and accuracy, and the need for longevity and the ease of collection. One issue is to what extent can standardization ensure greater accuracy. Specific measures are potentially more accurate and less complex than general measures, but do not help prioritization of resource allocation, and can be less sustainable. • In the same way that the theory of National Systems of Innovation guided the design of the CIS and the preparation of the Oslo Manual, the design of a public sector innovation measurement system could benefit from stronger theoretical foundations. Thus more energies could be invested in thinking about a theoretical model of public sector innovation. • It is important that public employees are aware that they are innovating. Innovation could be encouraged and promoted for example by including it in individuals’ personal development objectives or rewarded within the performance management system. This would also aid innovation measurement.