Tackling Policy Challenges Through Public Sector Innovation

A Strategic Portfolio Approach

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This report discusses how steering innovation investment in public sector organisations through a portfolio approach can help governments respond to the multi-faceted challenges they face. Portfolio management is a well-known device in the financial sector, allowing for dynamic decision-making processes involving regular reviews of activity and ensuring a coherent distribution of resources among strategic options. The report illustrates how this approach can be applied by public sector organisations to reap a variety of benefits, including avoiding innovation fragmentation and single-point solutionism; tackling risk aversion and learning at the portfolio level; identifying synergies among projects and activities; building value chains among projects and programmes; and layering activities connected to complex reforms. The report also discusses the type of innovation investments or facets a portfolio can help to steer and what these look like in practice.


Adaptive innovation

This chapter introduces the concept of adaptive innovation as part of the Innovation Facets Model. Adaptive innovation is about testing and trying new approaches in response to a changing operating environment. This chapter draws on a review of literature in the space of adaptive and agile governance, outlining the main dimensions relevant to governments: readiness to respond to change; the ability to innovate at a fast pace; and a governance framework that allows adaptation and innovation to take place. Environmental, organisational and individual drivers lead to the uptake of adaptive innovation in government. These include external crises, the opportunity to experiment and the ability to make fast decisions. To sustain adaptive innovation in the public sector over the long term, the chapter highlights the need for adaptive organisational structures, decentralised governance, enabling infrastructure, networks and partnerships, space for experimentation, and evaluation and feedback mechanisms.


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