Measuring Malaysian Public Sector Innovation Performance through Business Model Perspective

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Public Sectors around the world face constant demand in increasing efficiency and productivity. The pressure to improve service delivery particularly during this pandemic demands the public sector to provide more with less. Being subjected to mandates from the government, public scrutiny and compliance to legal system, public sector organisations are in constant pressure to perform above average, reform outdated process and deliver the best results with fewer resources. Adding to this, increasing demand has become the general expectation where the needs for customisable services based on the current lifestyle of the civil society or described as the “24/7 society” requires services to be available and accessible at all times. Therefore, public sector innovation agenda often focused in national level policy and initiatives. However, the innovation landscape remains an understudied terrain especially in Malaysian Public Sector. Capitalising on little existing insights, this study further expands the knowledge base by analysing underlying driving factors in innovation performance measurement from a Business Model Perspective for a more contemporary model discovery. Utilising Structural Equation Modelling technique, this study analysed responds from 328 middle managers within government agencies and organisation and revealed that the Malaysian Public Sector innovation management still depends on innovation capabilities both as a factor and mediator in influencing innovation performance greater than innovation management which has been the focus. The study found that there is a dire need for an organisation level model to improve the innovation performance in public sector agencies by focusing on both innovation capabilities and innovation management to ensure an excellent governance and delivery system being implemented effectively.