Governments are getting serious about innovation capability

The Australian government has been touting the importance of innovation for several years now, with the Coalition's innovation agenda recently conceded to be a political failure due to its lack of resonance with the Australian public.

However underneath the politics, government agencies across Australia and New Zealand have been vigorously expanding their innovation capability, as the The Policy Lab at Melbourne University recently reported.

"A vibrant public sector innovation landscape is emerging in Australia and New Zealand. Public sector innovation (PSI) units are increasingly being established by governments to bring new insights and approaches to policy design and the delivery of public services."

The Mapping Public Sector Innovation Units in Australia and New Zealand 2018 Survey Report identified at least 26 PSI units across Australian and New Zealand government at different levels, across agency-run, agency-led and industry-led units - and that only counts the units the researchers were able to identify, which missed units such as The Garden from Accenture and some deeply embedded innovation teams within certain government organisations.

Notably a number of these units remain new, with a quarter less than 12 months old, and more than half less than two years old, and small, with half employing 5 or less staff. As a result many of these labs relied on consultants and contractors with specialised skills to function effectively.

In Australia all of the agency-owned & led innovation units were focused on a single (funding) agency, whereas New Zealand has established two cross-government units, which work broadly across government.

Interestingly most staff at government-based units were long-term public servants. These units did not draw significantly on external talent from Australia's innovation networks - which raises alarm bells for me in terms of building a blend of talent with broad experience across the innovation ecosystem.

My personal experience with these innovation units has been mixed. Some are still very locked into public sector norms, and find it difficult to produce more than iterative innovations, whereas others have embraced the freedom to innovate and are already providing significant returns. In my experience the more diverse the staff experience, and the more 'liberated' from public sector norms, the more effective these units tend to be.

The areas of policy these units worked in were quite diverse, ranging across 'social issues, housing and welfare’, ‘Public administration and governance’, ‘Education’, ‘Health’, ‘Indigenous and Maori issues’, ‘Transport’ and ‘Policing, crime, and the justice system’ - a good sign that the value and need for innovation is  being recognised broadly across government, if not deeply.

Now while I have had concerns about some of these units turning into 'innovation ghettos' - where agencies tend to look to these units to provide the bulk of innovation within agencies, there are strong signs - particularly in New Zealand - that in many cases these units are functioning more as facilitators and amplifiers for innovation rather than innovation mines.

In my view there's plenty of innovation across government and the long-term challenges to realising this innovation as progressive improvement of government services, effectiveness and efficiency have included hierarchies stifling innovation based on source, poor pitch/amplification skills, limited capability to scale & execute, perceptual fears and budget mismatches.

If government innovation units can address these challenges effectively, then the future for these units looks bright.