Internationally the public sector is a lot more dynamic and innovative than its reputation might suggest. For example, active labour market policies, preventative health care, and climate mitigation strategies are being widely developed, supported by new digital services and responsive organisational reforms. Innovation involves the development and realisation of new and creative ideas and practices.
An innovative public sector continues to play a vital role in advanced economies.
In endeavouring to make best use of public expenditure for the public good, the public sector has gone far beyond simply achieving the narrow cost accounting of value for money. But there remain growing demands for more and better services.
Another challenge the public sector faces are wicked problems, that is attempting to resolve the complex inter-sectional problems that cannot be resolved by applying standard solutions or by increasing funding for existing mechanisms.
Australian examples of tackling the complexity of public policy include the vital work of the National Indigenous Australians Agency’s work on Closing the Gap Implementation Plan (2023), and the complex negotiations, planning and intervention since the origins of the Murray-Darling Basin Plan to manage Australia’s largest river system in a sustainable way.
Innovation typically involves more than just continuous improvement. Effective public policy innovation involves developing a series of capabilities that provide enablers and drivers for sustaining dynamic creative organisations. Intelligent digital systems, alert performance management, well integrated finance and management systems, agile administration, strategic vision, and responsive policy are all necessary to create the conditions for continuous innovation.
It is clear public policy can be just as innovative as the private market sector (and often facing more complex challenges). However, the unique qualities of the public sector allow going beyond narrow innovations in products and services.
Innovations may be evaluated not simply in terms of efficiency and cost-effectiveness but in the pursuit of justice and fairness. These are not simply innovations in government, but innovations in governance in which the community is encouraged to express its own interests and aspirations in terms of justice, well-being, prosperity, social relations and sustainability.
Dr Thomas Clarke
Occasional Policy Paper 2 - Published May 2024
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Dr Thomas Clarke is a Visiting Professor at the Institute for Public Policy and Governance at UTS. Dr Clarke is an international corporate governance and sustainability expert and Life Fellow of the Royal Society of Arts. He contributed to the development of international corporate governance standards at the OECD during the original formulation of the OECD Corporate Governance Principles (1999) and for the UN delivered a research paper on Sustainable Finance (2016) for the UNEP Finance Initiative.
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