Abstract
Although much has been written about public sector innovation in the last two decades, we still do not fully understand how public sector organizations become innovative. Therefore, this study inductively explored how four Norwegian municipalities developed innovation capabilities. I found that public sector organizations develop two forms of innovation capability in a path-dependent manner: low-routinized innovation capability and highly routinized innovation capability. In the former, dynamic managerial capabilities in the form of individuals’ entrepreneurial and leadership skills comprise the source of innovation capability. In contrast, in the latter, innovation capability emerges from dynamic organizational capabilities, that is, a set of innovation-stimulating routines, processes, tools, and structures. Notably, I found that regardless of the form of innovation capability, both spur the continuous development and implementation of various radical and incremental public sector innovations. Based on these findings, this study offers several contributions to the literature on public sector innovation and to the dynamic capabilities research agenda.
Highlights
The myth of the ossified public sector has long existed in the minds of most innovation and public administration scholars; that myth has been dispelled (Torfing, 2019)
This section elaborates on the development, nature, and outcomes of low-routinized and highly routinized innovation capabilities in public sector organizations
My data suggest that public sector organizations with low-routinized innovation capability can continuously pursue various public sector innovations because their employees and lower-level managers possess dynamic capabilities
Summary
The myth of the ossified public sector has long existed in the minds of most innovation and public administration scholars; that myth has been dispelled (Torfing, 2019). The current research suggests that the possession of innovation capability explains why public sector organizations can continuously develop, manage, and implement innovations (Clausen et al, 2020; Trivellato et al, 2021). The previous studies define innovation capability as an organizational dynamic capability that stimulates continuous innovation activities and strategic change (Schilke et al, 2018). These recent insights shed some light on why public sector organizations can continuously develop and implement innovations, it is clear that we need additional investigations to explain how public sector organizations develop the capabilities that make them innovative (Zyzak & Jacobsen, 2020)
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