What can open innovation be used for and how does it create value?

Abstract Societies face difficult challenges which require responses that go beyond the innovation capability of most public sector organisations. Open approaches to public sector innovation that exploits digital technologies have been proposed for some years to close this gap, but our knowledge of the use and outcome of using open innovation in this context is limited. This research takes stock of the study and use of these approaches by investigating the purposes for which public sector organisations use open innovation, and how it creates value. The research question is answered through a systematic literature review and an analysis of publicly available data about the open innovation projects referred to in that literature. The research identifies five different purposes of using open innovation. It also suggests that public sector organisations primarily use open innovation to pursue one specific purpose: innovation in society. When using open innovation for this purpose, public sector organisations attempt to create value by improving citizens' quality of life and the quality of neighbourhoods. They do this primarily by co-specialising IT and other resources in society (e.g. the transportation system) and by using the outcome of this co-specialisation process to change citizen behaviour, capabilities and experiences (e.g. encouraging citizens to use the transportation system more efficiently or making citizens feel more safe when using the transportation system). This research indicates that open innovation is generally not used to open up public sector organisations or to give citizens more influence in public sector or democratic processes. The research also indicates that open innovation, until now, has primarily been used to solve minor problems, and not large scale wicked problems in society. The research suggests a framework for value creation from open innovation initiatives that pursues innovation in society. This framework might help public sector organisations increase value creation and solve wicked problems using open innovation, and might help researchers to focus future open innovation research on essential knowledge gaps.