Public Services Innovation

Transcript of Public Services Innovation

1. Service Innovation CourseInnovation in public services IAN MILES[email_address] MIoIR, University of Manchester

2. Why is this important?

Public sector is a huge area of expenditure, employment, etc. and under heavy political pressure and facing challenges of social change (e.g. ageing)

Innovation is vital for increasing efficiency, for delivering new and better quality services

Important market for innovative products (goods and services) from across economy impact of public procurement on innovation systems

Important demonstrator of scope for new services, infratsructures and standards

3. Public Services (innovation)in Crisis?

Funding crises

New challenges

Governance

Regulatory reform

Modernisation

Inefficiency

Throwing money at problems

Initiative overload

Tech fixes

MPs demand transparent government IT projects Select Committee calls for an end to 'appalling waste of public money Bryan Glick,Computing22 Jul 2004 MPs are calling for much greater openness on government IT projects to prevent an 'appalling waste of public money and distress caused to thousands of people Seven in 10 government IT projects fail ZDNet.co.uk17 May 2007 Seven in 10 government IT projects have failed, according to the chief information officer of the Department for Work and Pensions.Joe Harley called for projects to be completed at a lower cost to the taxpayer, and said the government wanted to reduce the number of project failures to just one in 10. 4. Public Sector Reform

New public management

- Features: quasi-markets

- Indicators and targets

- Performance measurement

- - Acted upon!

- Outsourcing

Key Assumption (here):competitiondrives innovation

- Learning (esp organisational innovation?)

- Individuals will be motivated

- Organisations will be motivated

- - Use instruments like IPR

5. Drawing onhttp://www.step.no and also other MIoIR work 6. The challenge of innovation in public services

Conceptual

Research/empirical/methodological

Policy/practical

Challenge?What challenge? 7. The challenge of innovation in public services

Conceptual services and public services

Research/empirical/methodological

Policy/practical

This presentation considers three sets ofchallenges: 8. Challenge? What challenge?

INNOVATION:

Beyond technological innovation

Beyond classic product and process innovation

Policy innovation, organisational innovation, and more

Innovation versus change

PUBLIC SERVICES:

Public versus non-market:only those provided by the state?What definition of state provision?

Only those inservicessectors (not all nationalised industries) with large levels of state ownership?Or at least with traditionally large levels in most countries?

Huge variety cross-sector, cross-country, in modes of governance and organisation

Challenge? What challenge? 1 Conceptual Challenges 9. N A C E " N omenclature statistiquedesA ctivits conomiquesdans laC ommunautE uropenne" -

Services firms and sectors-

economic activities covered by Sections G to K andL to Oand the units that carry out those activities.

( Generate almost 70% of EU GDP )

Grouped byactivity-notby public/private, market-nonmarket (though some business services delineated)

Statistical Classification of Eco N omicAC tivities in theE uropean Community 10. NACE services sectors 42 Mainlypublic services, but much variation 100 Total services 0.1 Extra-territorial organisations and bodies Q 1.6 Private households with employed persons P 7.0 Other community, social and personal service activities O 14.3 Health and social work N 10.0 Education M 11.4 Public administration, defence; compulsory Social Security L 13.0 Real estate, renting and business activitiesK 5.1 Financial intermediationJ 9.2 Transport, storage, communication I6.0 Hotels and restaurantsH 22.2 Wholesale and retail trade G % NACE groupsEU employment,2000 11. NACE public services 42 Non-market services: public administration and defence, health, education , community services, etc. However, the non-market sections contain several activities, which are market activities (e.g. driving schools, cinema, hairdressing, or health services supplied through the market). The market sections are also liable to contain some non-market activities. (Official statisticians mention, for instance, e.g. central banking but there are service activities ancilliary to most sectors! Andbroadcastingand certain other important activities). Mainlypublic services, but much variation 100 Total services 0.1 Extra-territorial organisations and bodies Q 1.6 Private households with employed persons P 7.0 Other community, social and personal service activities O 14.3 Health and social work N 10.0 Education M 11.4 Public administration, defence; compulsory Social Security L 13.0 Real estate, renting and business activitiesK 5.1 Financial intermediationJ 9.2 Transport, storage, communication I6.0 Hotels and restaurantsH 22.2 Wholesale and retail trade G NACE groups 12.

SERVICES INNOVATION:

Beyond technological innovation

Beyond classic product and process innovation(delivery, interfaces)

Policy innovation, organisational innovation, and more

Innovation versus change

1 Conceptual Challenges (b) 13. Recall our Discussions of Key Features of Service Activities

In contrast to manufacturing (transforming materials to make artefacts) services transform:

- The state of artefacts and environments(physicalprocessing)

- The state of humans and other organisms(people processing)

- The availability and nature of data, information and knowledge(information processing)

Huge variety of activities, but frequently service products are characterised by:

- Intangibility (issues of transport, storage, coterminality)

- Interactivity (Production and consumption often intertwined)

- Information-intensity (Much specificity as to service, client)

Public services can be of all types, but largest groups are person- and information-processing.

14. Services Innovation

- Intangibility (issues of transport, storage, coterminality)

- Interactivity (Production and consumption often intertwined)

- Information-intensity (Much specificity as to service, client)

Need to relate service product and production process to service client often extended affair, degree to which individual details involve specialised or customised production varies immensely.Affects scope for innovation of various kinds.

Public services have to confront the variety ofhuman characteristicswith the dictates of large systems andbureaucratic rationality .

15. Some examples of innovation

Genetic screening

Intraocular lenses

Health informatics

Electronic patient records system huge scale, clear benefits (and professional risk perception)

NHS Direct: most radical innovation in recent history of health service

NICE

Tier Two reduced waiting lists through appropriate secondary care rather than using hospitals

Creation of new mental health trust specialisation

Pilot out of hours link with Aus/NZ consultants

Modernisation Agency

16. Manchester PUBLIN (health) results

Concept of innovation recognised and people can work with it (to some extent) in interviews, but the actual term innovation often was not employed many other terms used.

Innovation often seen as fashionable jargon or as new technology or problem-solving

Or as a matter of adoption of top-down guidelines, meeting targets (important procedural innovation).

Often incremental developments, often hard to establish boundaries between innovation and replication.

Huge number and range of developments, not subject to much direct recording/compilation in databasesThough some recording through incentive schemes, and through efforts to impose IPR models

17. Challenge? What challenge? 2 Research Challenges Underresearched like services innovation, of which it is part unclear how far concepts and instruments will work though we can expect many points of convergence (from life cycles to product champions, complementary assets to radical innovations). Search for commonalities, specificities or both assimilationist/demarcationist/synthesist Units of analysis, problems of large systems, compounded by problems of access and politicisation of issues. 18. Private == Public services

Markets as external selection mechanism:consumer choice

Competition between firms:marketing, sales, etc.May be transnational competition, self-service alternatives.

Customer Relationship and Supply chain management

Regulation often higher in services than manufacturing

Flexibility,e.g. in employment terms; Rewards

Profit-driven: strong incentive

Rents on innovation

Public policy driven services, sometimes heavily influenced by public attitudes and media renderings of opinion and service quality.

Some forms of competition and coexistence, with private and voluntary sectors and individual self-service.

Bureaucratic systems and administration.Employee lobbies.

(Nominally) strong emphasis on Equity and related issues, on ethics and privacy issues.

Personal and professional incentives

Public goods

19. Many such comparisons

Numerous essays on why public services might have an innovation problem

On why the solution might lie in introducing new public management and/or market principles

Various studies of public service innovation start off from this perspective

Even PUBLIN only examined public services

But there is one comparative study, whioch tells a different story..

20. Earls Canadian Comparisons Earl, L. (2004)An historical comparison of technological change, 1998-2000 and 2000-2002, in the private and public sectorsOttawa: Statistics Canada (also see Earl 2002) 21. Are there Specific/Stronger Obstacles to Innovation?

Would expect issues to arise concerning regulations, large technical systems, workforce issues (esp. professionalism and status conflicts), reward structures, etc.

Also (like other services) some strategies to deal with intangibility etc (e.g. targets, tests, credentials) and some to deal with public characteristics espmarketisation ,competition ,consumer-centric, cosnumer choice

Some results from PUBLIN health

22. IT project failures Government IT projects July 2003 Report 200 http://www.parliament.uk/post/pr200.pdf Difficulties with IT delivery occur in both the public and private sectors.However, the public sector has specific issues to address, including long procurement timescales, high publicity, the need for accountability and the political environment. There are some factors which can lead to particular problems with IT, such as rapidly changing technology, difficulties in defining requirements and high complexity. Much government IT is now delivered by external suppliers, so government needs to be an intelligent client. Departments require a range of skills to scrutinise bids, keep up to date with technology, be realistic about what systems are likely to deliver, understand commercial drivers and actively manage suppliers. Breaking projects down into smaller parts increases the chances of success and makes contingency planning easier, but requires considerable time and effort. It is important to include the final users in project development and provide time and resources for training. 23. Specific/Stronger Obstacles to Innovation? - from PUBLIN Health

Internal diffusion / roll-out repeatedly a major issue - much effort now being spent on identifying, codifying and spreading good practice, new procedures. Lack of structures and mechanisms for organisational learning seen as major issue efforts being made here. But

Initiatives to diffuse good practice seen as short-lived reorganisations promote lack of corporate memory

Infrastructural and procedural/occupational heritage and legacy, entrenched practice and procedures are commonly experienced.

Professionalised resistance e.g. clinicians, ambulance service form disconnected hierarchies, some self-governing professionals, others quasi-military forces.Lack of common command and control structures conflict with established roles, politics, empires

In particular lack of commitment to consumer orientation was often cited as a major issue (mirroring political rhetoric in UK).

Public resistance to reorganisation though public seem very open to new ways of operating

Lack of ownership of innovation top-down initiatives

and IP issues

24. Specific/Stronger Obstacles to Innovation?- more

Resistance to out of the box thinking plus risk aversion (generic issue in public sector related to nature of service (large-scale and severe risks) and to political cycles. High public/political profile plus blame culture, accountability and risk of litigation (but US?).

Pace and scale of change (NHS in particular) shifting targets and absence of opportunity to reflect/asses consequences

Very complex organisation composed of multiple tiered interlinked systems with - Huge staff numbers; Many occupations; Many organisational arrangements; Many service processes

Lack of patient information connectivity between actors in system

Lack of dedicated budgets for innovation at relevant (local, Trust) level.

Some areas (mental health) not high profile priority for investment (cf. surgery)

Requirement to consult, lack of clear picture of all eventual effects

25. In our studies, the innovations exciting management were:

Those more at the strategic/management level

Organisational:governance relation changes, new agencies, etc

New roles, responsibilities, new ways of operating (need forknowledge managementcapacity), role in training

Technical and technological(huge) some systemic, esp.IT-based,

New specific practices e.g. round pharmaceuticals, clinical practice, techniques, devices, etc.Huge range of artefacts involved.Again, much IT impact.

Often technological innovation closely tied to further organisational/process change/innovation

26. Public Sector Opportunities?

High level of staff expertise, creativity, problem solving

Strong public spirit ethos, motivations beyond personal financial rewards

Controversial shifts underway (e.g. competitive framework of Foundation hospitals) believed by proponents to increase innovation by:

- Allowing for flexibility and experimentation within target culture and common standards

- Incentivise staff (and management) financially, status-wise, and through improved service quality

- Improve patient choice (will drive resources as money follows patients) aand consumer feedback into innovation process

- Management draws on external sources for directed creativity and organisational innovation and knowledge mananagement

Conscious efforts at innovation management (under various guises)

27. Challenge? What challenge? 3 Policy Challenges

Research Policy bringing in the public sector where it is absent, taking better account of it where it is present

Public sector policy governance, regulatory reform, efficiency, modernisationBuilding innovation into public policyAssessing innovation processes and impacts to guide policy, validate expenditure

28. Many major initiatives with innovation implications

Could we have innovation audits? We have yet to measure public service innovation and impacts systematically (several partial attempts)!

Can we do better in assessing costs and benefits of attempts to impose certain private sector models on the public sector are there other elements of innovation management that should be engaged with (first?)

29. Policy for innovation? 30. Public Sector Modernisation 31. Modernisation Agency