Digital innovation strategies in the public sector

Abstract

Despite the increasing attention on digital innovations in the private sector, little is known about digital innovation strategies in the public sector. This knowledge gap is growing as public sector employees are increasingly embracing new digital tools and ideas. Drawing on rich qualitative data from practitioners in 25 cities across 18 countries, this study analyzes the digital innovation strategies pursued in the public sector, with specific attention placed on digital orientation and the foci of value creation activities. Extending the OECD's Observatory of Public Sector Innovation (OPSI) framework, we identify four distinct digital innovation strategies in the public sector: enhancement-oriented, anticipatory, adaptive, and persistent. Our findings reveal that enhancement-oriented and persistent strategies are the most prevalent, reflecting a strong focus on internal value creation through process optimization and long-term organizational change. In contrast, adaptive and anticipatory strategies are less common. We find a near-equal prevalence of incremental and transformational goals, indicating balanced strategic orientation. Our findings also suggest that practitioners often employ multiple strategies, reflecting the multifacetedness of driving digital innovation in the public sector. We provide valuable insights into various activities linked to the four identified innovation strategies, ending with a comprehensive discussion of our findings, conclusions, study limitations, and future research directions.