Innovation interrupted: The gap between value creation and evaluation in the public sector

Innovation in the public sector is crucial for addressing societal challenges, improving service delivery, and delivering public value. This qualitative study of what is valued in 141 public sector digital innovation initiatives in Sweden reveals a shift in what is valued when setting out value creation propositions (goals), and when value is later evaluated (intended outcomes). An emphasis on operational efficiency in the latter narrows the focus of innovation, prioritizing operational efficiency over broader societal benefits. Using a valuation lens, the research shows that this shift in values amounts to decoupling between value creation propositions and evaluated values. To address this, the study investigates the following research question (RQ):

How does an interruption of the coupling between value creation propositions and their evaluated value influence public sector innovation?

This study identifies three kinds of decoupling, namely translation errors, prioritization clashes, and open-endedness—that drive this interruption in public sector innovation.

While operational efficiency elsewhere is seen as a driver of (public sector) innovation, here I argue that it risks becoming an inhibitor. The same is true of open-ended digital innovation for its own sake, insofar as it contributes to decoupling perceptions of what is valuable in public sector digital innovation. By positioning these insights within the broader literature on public sector innovation and valuation, this study underscores the critical implications of avoiding decoupling, for effective innovation in the public sector.