Editor's note to readers
Welcome to this edition of Human Capital Matters (HCM)—the digest for leaders and practitioners with an interest in human capital and organisational capability. Human Capital Matters seeks to provide Australian Public Service leaders and practitioners with easy access to the issues of contemporary importance in public and private sector human capital and organisational capability. It has been designed to provide interested readers with a guide to the national and international ideas that are shaping human capital thinking and practice. The inclusion of articles is aimed at stimulating creative and innovative thinking and does not in any way imply that the Australian Public Service Commission endorses service providers or policies. It is intended that the articles are accessible for the general reader, do not require subscriptions to specific sites and, where possible and appropriate, editions of HCM have been reviewed by topic specialists to provide range and currency on topical issues.
Additional hyperlinks/references for those with librarian support or access to specific, user-pays sites may also be provided.
Thank you to those who took the time to provide feedback on earlier editions of Human Capital Matters. Comments, suggestions or questions regarding this publication are always welcome and should be addressed to: humancapitalmatters [at] apsc.gov.au. Readers can also subscribe to the mailing list through this email address.
This edition looks at innovation in the public sector.
In Australia the wealth of information available about innovation has been driven largely by the high importance it has been given by successive Australian governments since the mid 2000s. As recently as December 2015, the current Prime Minister was quoted in the Foreword to the APS Innovation Snapshot as saying:
This is a century of ideas, this is a time when Australia's growth, when our living standards, when our incomes will be determined by the human capital, the intellectual capital that all of us have. By unleashing our innovation, unleashing our imagination, being prepared to embrace change, we usher in the ideas boom.
Seen as a means to improve performance and productivity and characterised as it is by disruption, risks and optimising opportunities, innovation in the public sector is not without its challenges however. More about these challenges will be evident from the articles, especially those within the Australian APS context.
In both Europe and the UK, governments are working with an external focus to foster innovation across industries and organisations.
In Europe, innovation is seen as the key driver towards economic growth. It is show-cased as a way of creating job opportunities, providing greater global competitiveness and securing resources. Innovate UK—similarly to Europe's Innovation Union—aims to work with people, companies and partner organisations to find and drive the science and technology innovations that will grow the UK economy.
This HCM aims to provide some background on innovation including how to go about developing a case for innovation in regard to the development of policy and practices in the Australian public sector. A broader context is then provided by reviewing a selection of international jurisdictions.
List of articles:
The first article is an Australian Government website uploaded by the Department of Industry in 2011. It provides the historical context for innovation in the APS. It includes a number of links in regard to developing a capability for innovation in the public sector.
The second article is the Australian Government's Public Sector Innovation Toolkit. The site is maintained with recent posts, blogs and links to background information.
The third article comments on the broader public sector in Australia. It highlights the nature and sources of innovation, the barriers to the development of an innovative culture and highlights how to sustain the capability and create public value.
The fourth article is a discussion paper produced by the UK Cabinet Office and the Institute for Government on behavioural economics and how it might be implemented in the UK. MINDSPACE has been cited as an exemplar in innovation, drawing on academic research and applying behavioural theory across the public sector for practical effect on policy. Links to similar efforts in behavioural economics in Australia and elsewhere are also provided as a footnote to this article.
The fifth article moves to the rich resources of the European Union, specifically its Innovation Union site. Contained on the one site are links to free resources about how the EU is going about innovation.
The sixth article provides links to innovation efforts being implemented in the UK. 'Innovate UK' and the think-tank, Institute for Government.
There are also references for articles that require subscription fees, or that may be accessed from library resources.
Department of Industry. (2011) Context for public sector innovation.
The site provides an overview of the key developments around innovation and is concentrated mostly on the APS, although it aims to include States, Territories and Local Government. It maintains currency with posts and blogs as recent as (at the time of writing) April 2016. It includes links to background papers, most particularly the 2010 APS 200 Project Empowering change - Fostering innovation in the APS and the establishment of a collaborative experimental space, the APS DesignGov, also known as the Australian Centre for Excellence in Public Sector Design which operated between 2012 and 2013 with the aim of testing design-led innovation.
Australian Government. Public Sector Innovation. Public Sector Innovation Toolkit.
The Public Sector Innovation Toolkit was developed to assist public servants in their efforts to work innovatively. There are links to definitions, documents and a questionnaire designed to help with the identification of strengths and weaknesses in the innovation process. The questionnaire is brief, takes about 10 minutes to complete and provides a report with recommendations for focused effort.
Institute of Public Administration Australia (2014) Australian Public Sector Innovation: Sharing the future through co-creation. Public Policy Discussion Paper, UTS
This report deals with two fundamental challenges to innovation in the public sector: the culture of risk-aversion and the increasing complexity of policy making.
Public service culture, routines and organisation, which have evolved over a long period, emphasise risk-minimisation and efficiency. Greater innovativeness cannot be simply an additional performance dimension. It requires systemic change in most aspects of management, training, planning, decision making and the deeper levels of culture, routines and accountability. How best to begin, guide and sustain the transformation of public sector organisations remains a central challenge. In summing up lessons learned from across jurisdictions such as the UK National Audit Office, The South Australian Public Sector Performance Commission and the US Government, the authors believe there are at least four vital requirements for innovation to take place: time to change the culture of the public sector, leadership to drive change, resources to invest in training and experience to allow learning.
An increasing proportion of the policy and service challenges which the public service confronts are complex – they defy easy analysis and remedy. At the same time the role of the public service in policy development and program implementation is increasingly contested. There is a need for new approaches to innovation, drawing on new skills, tools and relationships.
The authors believe that an innovative public sector is vital for the legitimacy of government. The report aims to raise awareness of the scope for innovation through under-utilised or new tools such as user-centric approaches and high involvement workplaces; approaches that are seen to be especially useful where problems are complex, there are multiple stakeholders and incremental improvements to existing systems aren't going to address the need for change. These are all characteristics of the public sector. The report underpins three critical facts about innovation: it involves uncertainty, it is not only about technology and it requires a practical outcome. The authors believe that in a cycle of public sector innovation it is often the realisation and sustainment of an innovative idea that proves its undoing.
Dolan, P. Hallsworth, M., Halpern, D., & Vlaev, I., (2010) Mindspace: Influencing behaviour through public policy. Cabinet Office and Institute for Government. UK.
This paper was written to stimulate discussion about the application of behavioural theory to public policy for senior public sector leaders and policy-makers. In many ways this set the scene for a revolution in the UK in terms of innovative policy making. The key principles of the paper are that influencing behaviour is central to public policy and that policy-makers need help in applying insights in practice.
The acronym MINDSPACE was developed to capture nine factors which can be used by policy-makers:
M: Messenger. We are heavily influenced by who communicates information
I: Incentives. Our responses to incentives are shaped by predictable mental shortcuts such as avoiding loss
N: Norms. We are strongly influenced by what others do
D: Defaults. We 'go with the flow' of pre-set options
S: Salience. Our attention is drawn to what is novel and seems relevant to us
P: Priming. Our acts are often influenced by sub-conscious cues
A: Affect. Our emotional associations can powerfully shape our actions
C: Commitments. We seek to be consistent with our public promises and reciprocate acts
E: Ego. We act in ways that make us feel better about ourselves.
The paper shows that the framework of MINDSPACE can help tackle challenges to policy and gives examples based on case studies.
In conclusion, the authors note that the MINDSPACE framework can complement traditional policy tools and provide more effective policy in a more cost-efficient manner. The sustainability of any changes however, is not yet known. Despite this uncertainty:
Whether reluctantly or enthusiastically, today's policymakers are in the business of influencing behaviour, and therefore need to understand the various effects on behaviour their policies may be having. MINDSPACE helps them do so, and therefore has the potential to achieve better outcomes for individuals and society (p.10) 1
Paul Dolan is a Professor of Economics in the Department of Social Policy at the LSE.
Michael Hallsworth is a Senior Researcher at the Institute for Government. He has conducted cross-government research into organisational behaviour, machinery of government changes, and information technology.
David Halpern is Director of Research at the Institute for Government. He was Chief Strategist at the Prime Minister‟s Strategy Unit between 2001 and 2007. He is the author of Social Capital and The Hidden Wealth of Nations (both Polity Press).
Dominic King is a Specialty Registrar in General Surgery and a Clinical Research Fellow in the Department of Surgery and Cancer at Imperial College London.
Ivo Vlaev is a Senior Lecturer in Psychology in the Faculty of Medicine at Imperial College London. His research focuses on studying human judgment and decision making by exploring models and methods from experimental psychology, behavioural economics, and neuroscience. His specific research topics are behaviour change, risk attitudes, consumer behaviour, cooperation, and well-being.
European Commission, Innovation Union: A Europe 2020 Initiative
Europe 2020 is the European Union's (EU) ten-year jobs and growth strategy, launched in 2010 to create the conditions for smart, sustainable and inclusive growth. Five targets have been set for 2020: employment, research and development, climate and energy, education, social inclusion and poverty reduction. Progress on these targets is monitored throughout the EU's yearly cycle of economic and budgetary coordination.
One European 2020 initiative is the Innovation Union. The 'IU' is the EU's strategy to create an innovation-friendly environment to ensure growth and jobs. The site provides a wealth of links to reports, documents and 'reference sites' that are current and topical for an Australian public sector context (e.g., healthy ageing, behavioural economics, the digital economy). There is also a link to the EU Bookshop which contains over 3000 publications on topics such as research, policy and organisation, ICT and social sciences research. Most of the documents and reports are available in various formats and in English.
Gov.UK Innovate UK.
The UK's National Innovation Plan is being developed for publication later in 2016.
The Institute for Government is the UK's leading independent charity and think tank promoting more effective government. It works with political parties and senior civil servants to provide fresh thinking through research, events and leadership development. The site provides links to publications, events and international efforts to promote effective and efficient government.
References available on payment or through subscriber services:
Wherefore art thou, walk-shorts?
Author: Ballingall, John
Source: Public Sector, Vol. 38, No. 3, Sep 2015: 24
Abstract: So far, this issue of 'Public Sector' has considered workplace productivity and the question of allocative efficiency. But what about the important area of producing policy advice? How good is it, and can it be improved? John Ballingall, Deputy Chief Executive of NZIER, considers the matter. (AU$)
Citation: Ballingall, John. Wherefore art thou, walk-shorts? Ongoing innovation and creativity in policy advice [online]. Public Sector, Vol. 38, No. 3, Sep 2015: 24.
Want innovation in government?
Author: Waterford, David
Source: Public Administration Today, No. 43, Jul 2015: 32-34
Abstract: Governments of all political persuasions continue to talk-up the need for more innovation in and by the public sector.
Citation: Waterford, David. Want innovation in government? [online]. Public Administration Today, No. 43, Jul 2015: 32-34
Innovation at the nexus
Author: Albury, David
Source: Public Sector, Vol. 37, No. 4, Dec 2014: 9
Abstract: Recently, David Albury, who is a Board Director for the UK's Innovation Unit, came to New Zealand to discuss radical innovation in the public sector. We were able to talk with him about the importance of working across levels of government and if he had any insights into how New Zealand is faring in this area.
Citation: Albury, David. Innovation at the nexus [online]. Public Sector, Vol. 37, No. 4, Dec 2014: 9.
'Dangerous ideas' can lead to better results. (article available on-line)
Author(s): Vanstone, Chris
Source: Public Administration Today; (38) April / June 2014: 14-17
Abstract: SA-based The Australian Centre for Social Innovation's (TACSI) director of co-design, Chris Vanstone, reports on an ambitious social program that takes its lead from private sector research and development methods.
1 The application of behavioural insight to public policy has been taken up in Australia by a number of organisations including the NSW Government's Behavioural Insights Unit. The ATO has applied behavioural insights to tax and debts. 'Nudging', a term applied to practices resulting from behavioural insights, has been reviewed extensively in this last link from the University of Toronto in 2013: Nudging Around the World. This article gives guidance on choosing appropriate policy tools (p. 8) and provides a summary of behavioural economics initiatives from around the world (p. 13)