Co-innovation in public services: Planning or experimenting with users?

ABSTRACTRenewing public services is topical due to growing service needs and financial challenges in the public sector. Recent studies suggest that user-driven approaches could be an important success factor for creating service innovations. However, empirical studies of the processes have remained rare. Previously, stage-gate models of innovations - with in-depth, thorough, in-house planning - seemed to be dominant, but also rapid and open models have emerged. We address the research gap by studying: for what kinds of innovation targets are each of the two processes, planning-oriented (stage-gate) and rapid experimenting suitable, and how do they encourage radical innovations? We conducted a qualitative case study by comparing four pioneering renewal cases from two Finnish cities. All four included citizens, defined here as users, and several other stakeholders. Cases were selected as illustrative extracts of the different types of innovation approaches and processes. One city applied a more traditional planning-oriented (stage-gate) process organized by the municipality, and the other city applied rapid experimenting designed more freely by the users. They sought new solutions to the topical problem of youth unemployment, and to foster dialog between generations. Our study contributes to further development of user-driven and collaborative aspects in innovation models in the public sector.Keywords: co-innovation, public sector, service innovation, user-driven innovationIntroductionThe role of innovation is viewed as crucial in all developed economies. Innovation increases competitiveness, and a growth strategy based on innovation makes it possible to foster employment and welfare on a larger scale. Currently, actions supporting innovation have also been increasingly emphasized in the development of public services (e.g. Albury, 2005; Hartley, 2005; Sundbo and Toivonen, 2011). At the same time, the modern, broad view of innovation emphasizes that innovations are embedded in social activities, accumulating on the basis of small, everyday actions, and resulting from an uncertain and complex process among multiple actors (Kline and Rosenberg, 1986; Lundvall, 1992; Sundbo, 1997). This broad view of innovation is a prerequisite for the understanding of service innovations, since a service is a process that develops in use (e.g. Gronroos, 2008; Bessant and Maher, 2009). Recent innovation and new service development studies show growing mutual interest in bottom-up and user-driven innovations via social participation and combining local resources for better services (Back et al., 2013; Hasu et al., 2011). When the population in Western economies is ageing, economic growth is uncertain, and dependency ratios are deteriorating, public services must be produced with fewer resources, but more effectively and without endangering quality. It seems, however, that public stakeholders face challenges in the ways of developing, producing, and diffusing innovations (Carstensen and Bason, 2012; Albury, 2005; Hartley, 2005; Rogers, 2003). In general, different types of open and more rapid innovation models are currently being sought as alternatives to in-house and planning-oriented, sequential innovation models (Chesbrough2010; Engwall et al., 2001; Toivonen, 2010). User involvement has been acknowledged to impact positively on the innovativeness of organizations; it can act as an accelerator of innovation processes, and as a source of new, more radical ideas (Alam and Perry, 2002; Blazevic and Lievens, 2008). Consequently the innovation activity is not controlled by the producing organization alone; the innovators can even be the users themselves (Heinonen et al., 2010; Sundbo and Toivonen 2011; Jeppesen and Molin, 2003; Brand, 2005). In the public context it seems, however, that many innovation topics have remained unfamiliar. Firstly, innovation targets and the radicalness of innovation outcomes have remained under researched (Bessant and Maher, 2009; Albury, 2005; Hartley, 2005). …