New Business Models for Public-Sector Innovation: Successful Technological Innovation for Government

OVERVIEW: Governments worldwide are under pressure to reduce spending, and yet the demand for public services is generally increasing. Despite growing emphasis on and investment in technological innovation, little is known about innovation in public services. Research has shown that resistance to change, risk aversion, and organizational structures are major barriers to public-sector innovation. How to overcome such barriers is less clear. Recently, researchers have increased their focus on the importance of specific business models in facilitating collaboration between public-sector organizations and private-sector partners. In this paper, we present an emerging business model—commercialization partnership—and discuss two examples of technological innovations in the U.K. public sector using this model. Our findings demonstrate that successful technological innovation may depend more on the models for collaboration than on the specific technology involved. We conclude with a checklist to assist technology managers introducing innovations into public-sector organizations.