An Outcomes-based Approach to Public-sector Innovation: The Case of Two UK Public Bodies

Abstract

It is widely accepted that innovative activities play a crucial role in driving economic growth and achieving global socio-political objectives. National ambitions encouraging innovation are reportedly impacted by how the public sector engages with small and medium-sized businesses (SMEs). Research on how public sector organisations engage with SMEs to innovate has often focused on the delegation of activities from the public sector to 3rd party innovation intermediaries. However, a less developed area of research relates to the impacts of innovation engagement activities between public sector organisations and innovative SMEs. Therefore, the departure point of this research is to examine the impacts of the SME innovation engagement activities of two public sector organisations - the Nuclear Decommissioning Authority (NDA) and the UK Space Agency (UKSA). The research explores how sectoral objectives influence the choice of innovation engagement activities for each public body and the impact of SME engagement activities at – project outputs level, organisational outcomes level and sectoral impacts level. This multi-level research approach contributes to the contemporary debate on innovation in the public sector and the impact of public sector innovation on sectoral innovation systems. The research project took a qualitative case-study approach and was conducted through semi-structured interviews with 20 organisations and 33 participants, from both the public and private sector. The use of 7 ‘nested’ technological product innovation projects and a multiple case approach, supported within-case analysis for evidence of themes and cross-case analysis, for evidence of common themes or contradictions. The findings of the research indicated that both public bodies used a range of SME engagement activities to: foster vibrant sectors; support innovations progress from concept to use; and promote each sector overseas. Both public bodies engaged with SMEs to invest in early-stage innovation to de-risk technologies and demonstrated a ‘willingness’ to use demand-side engagement activities: cluster policies and regulatory reform (UKSA); and supply-chain policies and providing incentives for end-users (NDA). However, the NDA’s value for money (VfM) and the UKSA’s growth objective influenced the choice of engagement activities in an interesting way. For the UKSA, there was a focus on supporting SME’s commercialise innovations, whereas, for the NDA, there was a focus on supporting end-users adopt SME innovations. Furthermore, to address gaps towards the later stages of innovation lifecycles, UKSA supported SMEs commercialise innovations by supporting SMEs access ‘flight-heritage’ and follow-on investments, whilst the NDA supported end-users adopt SME innovations by stimulating demand and facilitating SME access to inactive/active facilities. A challenge in both sectors was balancing the impacts of supply and demand side activities– challenges that can leave SMEs in ‘want’ of an end-user (NDA) or end-users in ‘want’ of an SME (UKSA). There has been a lack of consensus in prior research on measures for innovation engagement and the findings of the research demonstrated that attempting to measure engagement outputs beyond the stand-alone activity was problematic. Evaluating engagement across innovation projects however gave a more nuanced appreciation of innovation impacts at sectoral level. The contribution of this research is to expand the existing literature on public sector innovation through empirical observation of ‘real-life’ case examples and advances our understanding on how public bodies act as innovation intermediaries to deliver sectoral innovation strategies.

Date of Award	31 Dec 2019
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Andrew James (Supervisor) & Paul Chan (Supervisor)