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Section 5: Innovation - sourcing and partnering

In today’s world, no single organization, private or public, will likely have the ability to develop all necessary innovations in-house. Neither can they afford to ignore internal capabilities. (Eggers and Singh 2009, p. 114)

We know from research into innovation in the private sector that, apart from internal sources, customers and suppliers are leading sources of innovations (Thornton 2009). Like those businesses that innovate most effectively, the public sector must work with its key stakeholders to help it improve and update policies, programs and services and to meet the new challenges of the 21st century. Partnerships can also allow governments to share risk and to leverage the investments that other organisations have already made in developing new ideas and systems (Eggers and Singh 2009).

Citizens, clients and customers

Citizens, clients and customers, as the end users of government services, have significant personal investment in and interaction with those services. They usually have strong views on how services could be improved. They want services to be delivered so that they are tailored to users’ needs, preferences and wants.

Actively listening to community views and concerns and acting on those ideas will mean more focused and effective public sector policies and programs. Consultations reinforced the need for the APS to build its capacity to capture the views of citizens. Current methods of acquiring feedback, such as satisfaction surveys and complaints or compliments received, give useful but limited information. To elicit the most useful information, government needs to proactively seek input from the user community— and that input needs to be deeper and broader. New technologies have the potential to speed up and improve this process.

Some government agencies and community organisations offer interactive websites and seek comments through social networking tools such as Twitter, Facebook and blogs. Those tools can complement the more traditional shopfront, phone and email contacts and are well understood by the younger community and workforce.

Knox City Council (Victoria) has an emphasis on involving the community through interactive media. Its Place Management Project sought new ideas for upgrading the local shopping strip. The project used social networking tools to capture the community’s views as well as holding open forums. The project started by asking citizens how they visualised an ideal commercial space for Knox. This led to feedback that people wanted to reinvigorate the community hubs to create a more ‘village’ feel. The project set a new direction for the redevelopment of the shopping strip and other commercial spaces to include better access, streetscapes, open areas, coffee shops etc.

Understanding the different perspectives of citizens and external groups is essential if the government is to implement policies and programs that make a constructive contribution ‘on the ground’. The Department of Health and Ageing’s yourHealth website is an example of the on-the-ground approach.

The website aims to provide Australians with a means of contributing their stories, views and ideas about improving the health system.

The website provides a Web 2.0 platform for online community consultation. Built around three health reports, it is an easy way to conduct a national discussion with Australians to collect views across all areas of health reform.

YourHealth provides an integrated set of formal and informal consultation tools built on Web 2.0 principles. It supports community participation that ranges from simple reading and reflecting on the reports, to sharing links with others, to voting in quick polls and blog posts, to providing comments and views, and to telling individual health stories. To encourage participation, yourHealth uses online announcement tools such as Twitter, RSS and email announcements, as well as cross-linking from other health-related sites.

The tools are reusable and extensible—a capability that will reduce future administrative burdens and streamline any further stakeholder or community engagements by the department.

The website is being continually updated to improve the user experience, add new ways of making submissions, and provide new ways to visualise content provided by the department or submitted by users.

In a two-month period (July–September 2009), the yourHealth site had over 60 000 visitors, 55 submissions and 3380 votes on quickpolls and the blog. In the same period, more than 400 people subscribed to the website’s email list and 267 people followed its Twitter stream.

The April 2008 Australia 2020 Summit was an example of citizen engagement by government to identify policy priorities and options. Its aim was to help shape a long-term strategy for the nation’s future. The summit gathered ideas and debated options in 10 critical areas: education, infrastructure, indigenous issues, rural issues, health, strengthening communities, creativity, governance, and security and prosperity. The April 2009 government response considered the 900 ideas generated and outlined the ideas that the government would implement, those it would explore further, and those that it would not take forward.

Some offered areas for improving the operation of the summit—for example, some found the online forum difficult to use and restrictive, and the forum was shut down days after the summit. Such comments demonstrate that innovation and citizen interaction can be challenging and that citizen expectations about the quality of user interfaces are high.

As well as creating channels for public input to future policy options (the 2020 Summit) and to existing policy and programs (the yourHealth website), governments frequently actively promote citizen involvement at the design and development stages of policy through various forms of consultation. Citizen involvement in the policy design process assists policymakers to understand how users will experience and interact with various proposals.

However, the usefulness of the output of consultations depends to a significant extent on the quality of the consultations, and it is worth thinking carefully about the approach and the tools to be used to get the best results. Some governments have established specialised units to engage the public and the user community. MindLab in Denmark is a unit set up to actively work on user-centred innovation.

MindLab (established by the Danish Government in 2001) is a cross-ministry unit for citizen-centred innovation. Its mission is to involve citizens and businesses in developing new solutions for society.

MindLab focuses on user-centred innovation. It involves citizens and businesses in the development of innovative public solutions and in carrying out government-wide projects in areas such as climate change, immigration and better regulation. It also undertakes more specific engagement for individual ministries in areas such as business services, employment services and policy, and digital tax services.

MindLab has five strategic goals for creating value for the three ministries it serves: contributing to innovation; efficiency; transformation of ministry culture; knowledge development and dissemination; and communicating results.

It consists of 12–14 people with specialist skills, including sociologists, IT specialists, anthropologists, designers, and political scientists. It does 10–15 development projects annually, carries out qualitative research activities based on anthropological approaches, runs workshops and seminars to co-create with citizens and businesses, tests new ideas in practice, in particular through service design strategies, and conducts academic research, documenting and sharing new methods.

User-led innovation and co-creation, as often occurs in the private sector, forces a shift in thinking about how ideas and content are generated. Content is no longer confined to a dedicated individual or team. It comes from a diverse group of participants. The development of open source software is an example of this shift (because source code is made publicly available, any programmer can contribute their code and ideas to program development). The greater contestability of policy advice to government is another example that looks set to expand further as greater use is made of the capabilities of current technologies:

User-led innovation is transforming the way many organisations develop new products, services and knowledge. Service-based organisations in particular can benefit from leveraging the participation of their audiences, customers and citizens. Today’s consumers have much greater input into the creation and dissemination of the products and services they consume. (Sharp and Saloman 2008, p. 10)

While it will take time and experimentation for the public sector to work out the most effective means of utilising new technologies to capture useful public input, it is a journey that we have commenced and the Government 2.0 Taskforce’s report, (Engage: getting on with government 2.0, 2009), sets out useful principles and directions.

Innovation from within the public sector

As noted in Chapter 3, the State of the Service Report and consultations indicated an openness and positive attitude to innovation among the majority of public servants. While they may feel that innovation needs more support in the workplace, it is clear that many welcome the opportunity to develop and implement new ideas.

Even more remarkable, public servants innovate not because of financial incentives or personal rewards, and not even because they are given support (which they generally are not). They innovate because of a public service ethos. (Bourgon 2008, p. 400)

Public servants are often motivated to innovate because they can see better and more effective ways of doing their job or of delivering government programs and services. Frontline staff in particular, because of their first-hand experience, often have views on how government services can be delivered differently. However, the further away from the centre of agency decision-making that staff are, the less opportunity they have to provide innovative ideas and input. Unless agencies have a mechanism for capturing and considering staff ideas—and not just those of senior staff in central office but of all staff, including those at the front line of program delivery—they are losing one of the richest potential sources of new ideas.

In focus groups, staff were concerned that their ideas and possible innovations were being judged and dismissed prematurely by supervisors. Some felt that existing hierarchical structures were obstructing the adoption of new ideas. As one submission said:

Individuals or collaborative groups who are self motivated and have a strong focus to make things happen and who can see opportunities to apply innovative solutions or create through initiative and innovation new resources or services, find their efforts to achieve these things constantly restricted or just shut down because such activity is seen as a counter to the accepted centralized operational model.

Clearly, if the innovative potential of staff is to be captured, a channel for the provision and consideration of new ideas is required. Some agencies do have staff suggestion schemes of various degrees of sophistication. As with consultation, the usefulness of the output usually reflects the quality of the suggestion scheme. The challenge is to establish a channel for staff input that is effective but that passes the cost–benefit test.

Politicians and political platforrms

The political realm is a key source of innovation. Governments and alternative governments vie to develop the most effective policy ideas, and a change of government or even of a minister can herald new ideas or approaches. This can include approaches that are very different from the existing strategy and can involve quite radical innovations.

One example was the outsourcing of employment services introduced in 1996. As part of the 1996-97 Budget, the new government announced a move towards the ‘outsourcing, or contracting out’ of employment services previously provided by the publicly owned Commonwealth Employment Service and Employment Assistance Australia. Those services were now to be provided by contracted bodies, which were to be paid according to their success in achieving various performance indicators and delivering outcomes set by the government. In essence, they would be paid by the Commonwealth according to how successful they were in placing people into jobs.

This reform, leading to the establishment in 1998 of Job Network, was one of the first comprehensive attempts internationally to apply market principles to the provision of active labour market assistance for job seekers.

Radical ideas that can drive significant change require political support and authorisation for implementation and often originate at the political level. Their implementation by public servants usually also requires a significant amount of innovation in taking a radical new approach and turning it into a workable and accepted new procedure.

Academics and specialists

Academia is rich in ideas, data and knowledge. It also provides insight, analysis and evaluation of ideas and innovations. Of course, it is part of the broader canvass from which governments draw policy advice, but there is evidence to suggest that productive collaboration between academia and the public sector is underdone.

Several submissions noted the importance of collaboration between the APS and universities and academic think tanks, pointing out that those resources were largely untapped. While interplay between government and the academic sector is more prevalent in other countries, such as the United States, in Australia there is a historical mindset that identifies universities with formal education and fails to acknowledge their role in research, critical analysis of public policy and the advancement of knowledge.

A number of public sector agencies have established fruitful partnerships with academic institutions. For example, the Australia and New Zealand School of Government (ANZSOG) was established as a not-for-profit company in 2002 with the vision of creating a world-leading educational institution that teaches strategic management and high-level policy to public sector leaders. Formed by a consortium of governments, universities and business schools from Australia and New Zealand, the school is also home to a substantial research program that aims to deepen government, community and academic understanding of public administration, policy and management.

Another example is the establishment of Australian Defence Force Academy in 1986 through a partnership between the Australian Defence Force and the University of New South Wales to provide training and education for the future leaders of Australia’s navy, army and air force. Through that partnership, cadets are able to complete three- and four-year undergraduate degree programs in arts, business, engineering, science and information technology. The university education (as well as the military training undertaken) aims to ensure that participants possess the knowledge, skills, professional abilities and qualities of character appropriate to officers in the Australian Defence Force.

Recent speeches by Prime Minister Kevin Rudd have recognised the potential to develop a deeper and richer relationship between the academic sector and public policymakers. In his John Patterson Oration, the Prime Minister said:

… for too long in Australia, thick walls have existed between places of research and learning, and places of policy making and implementation. Those thick walls do not enhance either the quality of public administration or the quality of academia. (Rudd 2009)

The first fruits of this approach were embodied in the recent announcement of a new National Security College, to be headed by a former secretary of the Department of Foreign Affairs and to be based at the Australian National University.

In addition to these formal partnerships, it is important not to forget the value of serendipitous partnership and collaboration brought about by openness. This kind of partnership often occurs where agencies make information freely available, even though they do not necessarily know what outsiders are going to do with it. Such interactions are becoming more common in the Government 2.0 world, where individuals are ‘mashing up’ data from a range of sources, with potentially highly useful outcomes for individuals, agencies and end users.

More productive partnerships, both formal and informal, between the academic sector and public policymakers have the potential to boost the quality and speed of innovative effort in the public sector.

Non-government organisations

The APS works with a large number of non-government service providers. These groups often use innovative techniques to deliver services, some of which they do on behalf of government (in this sense, they are akin to suppliers in the private sector). They have a unique perspective on working with government and acting as an intermediary between government and citizens. They provide input, ideas and suggestions for new ways for government to work.

There are three main features of NFPs [not for profits] that could facilitate innovation (1) the purpose-driven nature of their activities can give freedom to explore new approaches to achieving that purpose … (2) The cost of failure maybe lower for NFPs … (3) The process of trying new things can be a highly valued part of what the NFP offers to its staff, members and clients. (Productivity Commission 2009, pp. 9.2–9.3)

In addition, the close engagement of many not-for-profits (NFPs) with community groups places them in a good position to conduct trials and pilots, and to test the application of government policy.

Many of the community organisations consulted identified a mismatch between the on-the-ground needs that they report to government and government’s responses. They want innovative feedback systems to ensure that their views and submissions to government affect policy outcomes more quickly and effectively. A reaction (or worse, a partial reaction) after 12 to 18 months is inadequate.

With the outsourcing of many government services to NFPs, the differences of scale between the government and many smaller NFPs can create ongoing difficulties. For example, there is increasing concern about the shuffling of service delivery risks from the government to the non-profit sector. Most community organisations are ill-equipped to bear a constant load of commercial risk. Rare examples of government agencies becoming both funders of and risk sharers with non-government organisation contractors may point to future models for the delivery of social services.

It is important to note that a range of commercial service providers provide similar services to many NFPs (for example, in the area of employment services, to which much of this section also applies).


Companies innovate continuously in order to find new approaches, products and services and to remain competitive. Private sector innovation has heightened community expectations and is indirectly driving innovation in the public sector by increasing the public’s awareness of those areas where the public sector is not keeping pace.

Business is an important supplier to government and a potentially rich source of new ideas. In a services-dominated economy, private firms will frequently be contracted to provide government services. In some sectors (defence, in particular), their role in developing innovative products for government use is critical.

The Australian Advanced Air Traffic System (TAAATS) was developed by the French company Thompson (now Thales) and Airservices Australia, and was introduced in 1999. TAAATS is the hardware and software system used by Airservices Australia for air traffic control services across Australia as an aid to air traffic controllers. It is a computer-based system that does not control aircraft, but gives the user a display of information about an aircraft’s position and associated information. It also handles communications and other information exchanges.

The development and introduction of TAAATS greatly simplified the management of Australian airspace and reduced the number of control centres needed from six to two.

Either through direct engagement (for example, procurement) or through other means, business can be a vital partner in delivering and achieving innovative solutions.

The potential for innovative input from business depends in large part on the quality of the engagement.

Intrajurisdictional and cross-jurisdictional learning

Other public sector agencies and jurisdictions are an obvious and very useful source of ideas and experience. Learning from other jurisdictions is a relatively easy way to source innovative ideas, obviating the need to reinvent the wheel every time agencies seek to do something new. It would be rare not to find a precedent for most of the public sector activities we undertake, and having a good knowledge of what has worked and not worked elsewhere can be invaluable in seeking to implement new ideas. It can also save considerable time and money.

In the APS, some policy areas or project teams use ‘environmental scanning’ to see what has been done elsewhere, what has worked, why, and how it can be adapted for another policy or project. Once an idea has worked for one jurisdiction, it should be available for use in another, with appropriate tailoring to local requirements.

However, the public sector is generally not good at documenting and disseminating the outcomes of its innovative efforts, particularly when those efforts are less than successful. Even within the APS, where agencies have a great deal to gain by sharing relevant experience in trying new approaches, the extent to which that occurs is rather limited and ad hoc. Collaboration that allows agencies to learn from each other and across jurisdictional boundaries encourages innovation and speeds the process. The flow of ideas will be greatest when there is openness between agencies and a willingness to explain what worked and why. Agencies within the APS should focus more strongly on sourcing innovations from each other.

Resource and efficiency considerations are driving agencies with similar objectives to work together more, and that will assist. The creation of the Human Services portfolio, for example, was designed to bring together a range of disparate service delivery agencies that stood to gain by sharing resources, knowledge and experience. Collaborating on future systems and approaches should pay innovation dividends.

Council of Australian Governments (COAG) processes, through which the Commonwealth and state jurisdictions have a forum to address issues of common concern and share relevant experience, also provide opportunities for shared learning and innovation. This was demonstrated in late 2008 when COAG reached in-principle agreement on the new Intergovernmental Agreement on Federal Financial Relations, in which the council agreed to six major national agreements and various national partnership agreements in the areas of health care, education, skills and workforce development, disability services, affordable housing, and Indigenous reform. Shared learning will be inevitable where multiple layers of government are involved in implementing large projects.


As noted elsewhere in this report, governments around the world are facing issues similar to those faced by the APS in stimulating new and innovative responses to the challenges of the 21st century. There is a long history of the public sector borrowing ideas across national borders and adapting them to solve local versions of similar problems. At the international level, organisations such as the OECD are an invaluable source of information and analysis about the public policy experiences of comparable governments. The OECD Innovation Strategy due for completion in 2010 will be a particularly important contribution. In addition to the OECD, a range of other international forums are important sources of innovation examples, lessons and insights.

However, care is needed to ensure that ideas are not transported holus bolus without consideration of differences in size, demography and political, cultural and historical settings that can affect the likelihood of success.

Annex 1 outlines some of the activities of a number of other countries that are working on public sector innovation.

Information management and evaluation

Effective management of information is important as a basis for innovation within agencies and the public sector as a whole. Information management can illustrate trends and developments and highlight innovation gaps and opportunities.

Building on information management, evaluation can also be a powerful driver of innovation. Evaluation of previous initiatives provides insights that can lead to the development of further innovation. By showing where previous efforts have or have not worked, opportunities for innovation can be identified and new approaches trialled, or previous innovations can be refined and improved. To achieve this, however, evaluations need to be frank and honest, including about what has not worked:

… studies of what causes innovations to succeed … must include innovation failures as well as successes. (Kelman 2008, p. 50)

Without the evidence base provided by effective information management and evaluation it is impossible to design better solutions and systems. The collection and management of information is a work in progress in most agencies. As has been highlighted by the Productivity Commission (2007), there is significant room for improvement, particularly in the collection of longitudinal data, which is necessary to assess the longer term impact of many public policies.

In addition to collecting and managing information, making it widely available in formats that permit and enable use and reuse has the potential to generate innovation and benefit both the public sector and the wider society. The Government 2.0 Taskforce (2009) has recommended opening up access to publicly funded information through the use of Web 2.0 techniques.

In particular, the taskforce sees Government 2.0 as a key means for renewing the public sector; offering new tools for public servants to engage and respond to the community; and empowering the enthusiastic to share ideas and further develop their expertise through networks of knowledge with fellow professionals and others. Together, public servants and interested communities can work to address complex policy and service delivery challenges.

The taskforce argues that information collected by or for the public sector is a national resource that should be managed for public purposes. That means that we should presume that it should be freely available for anyone to use and transform, unless there are compelling privacy, confidentiality or security considerations.


Technological change and developments create opportunities for innovation through new platforms, new forms of communication, or doing things differently. New technologies can change the very innovation process. Dodgson et al. (2005) write of innovation technologies, such as computer-based simulations and models or visualisation technologies that can speed the innovation process and reduce complexity. Visual tools can assist in testing the design of a new facility with users, and computer models can allow rapid testing of potential innovations and interventions before committing resources. The public sector needs to be alert to these potential new sources of innovation.

The Australian Bureau of Statistics BetaWorks site has a simple animated model of the projected Australian population by age, covering the period from 1971 to 2051 (ABS 2009b). Visual tools such as the Animated Population Pyramid can make significant amounts of data more accessible and their implications more apparent. For example, the pyramid can readily communicate the extent of expected demographic change and the need for innovation to service an ageing population.

New technologies also allow more efficient and effective service delivery. New services technologies in ICT , Web 2.0 and Service Oriented Architectures enable better matching of limited resources to the specific needs of individual citizens. The European Union has been actively exploring these possibilities by investing in what is becoming known as ‘The Internet of Services’ (European Commission 2008).

New technologies can potentially deliver services in remote locations that are cost-effective, greener and of higher quality. Advanced tools for tailoring information delivery can customise services based on customer characteristics, such as geographical location or social disadvantage. Visualisation tools can help stakeholders to understand the implications of policy decisions, particularly in complex situations.

The social sciences can also contribute to decision-support technologies for use by front-line staff and help in the design of interfaces so that people can make better decisions.

Centrelink and CSIRO have invested $20 million in the Centrelink–CSIRO Human Services Delivery Research Alliance—a cooperative relationship to invest in the knowledge required to develop a national human service delivery system that is sustainable, citizen-centric and connected across government and public dimensions. The alliance focuses on:

  • The Human Services Ecosystem—improved use of information assets to support services delivery outcomes and decision analytics, providing and creating options for future development and citizen-centricity as a driving factor in system evolution.
  • Place Based Services—analytical techniques and decision-support tools to help Centrelink target investments and evaluate the benefits of support programs to Australia to achieve better social outcomes. This includes research into the causes of geographic disadvantage within cities, regions and remote Australia and the development of appropriate solutions with a view to breaking cycles of dependence.
  • Technologies for Human Service Delivery—using technologies to increase the flexibility and reach of Centrelink’s service delivery systems. Research, development and advice will inform decisions for new standards, architectures, technologies and systems for citizen-centric services and the interoperability of organisations, services, datasets, applications and tools for quality-driven service delivery.

Technology is an important source and driver of innovation, and the public sector needs to ensure that it utilises new technologies to its advantage.

Enhancing creativity

This chapter identifies sources of ideas to enhance innovation in the public sector. It is also important to recognise that skills can be enhanced to encourage creativity, at both the personal and the organisational levels.

Consultations noted the importance of exposure to the new. Indeed, rates of innovation are highest among people who are regularly exposed to new ideas, and innovation is most strongly resisted by those who rarely encounter them. Organisations and teams can pursue a number of ways to enhance creativity in the workplace.

Key points

  • Working collaboratively with key stakeholders, especially citizens, clients, academia, business and the non-government sector, will facilitate innovation in the public sector.
  • Agencies need to be proactive and focus on the quality of their engagement with these stakeholders if they are to optimise innovative outcomes.
  • APS staff provide a rich source of new ideas, but effective channels for staff input are required to capture that innovative potential.
  • Public sector agencies are not good at documenting and sharing the outputs of their innovation efforts. Greater focus and effort should be directed at learning from each other.
  • Effective information collection and management, and the broad availability of public sector information, are essential underpinnings of innovation efforts.
  • Technological developments are a rich source of innovation possibilities, which the public sector must assess and utilise where appropriate.
Last reviewed: 
6 June 2018