Public Sector Open Innovation: Exploring Barriers and How Intermediaries Can Mitigate Them

Licentiate thesis, 2018

Public organizations are increasingly embracing open innovation (OI) practices. Still, little is known about how the challenges they face when doing so compare to the barriers that have been identified for OI in the private sector. Similarly, despite being recognized as imperative actors in private sector OI, the understanding of open innovation intermediaries’ (OIIs) roles in public sector OI is limited. Given these two knowledge gaps, this licentiate thesis sets out to further the knowledge of what types of barriers impede public sector OI, and how OIIs can mitigate them. These issues are explored through four case studies within the public transport sector in Sweden. In all the cases, public organizations were trying to accelerate innovation through outbound OI practices, and in three of the cases, OIIs were utilized to facilitate the processes. A comparison of the case study findings and extant OI literature suggests that OI practices are harder to adopt for public organizations than for private firms. Public organizations face more rigorous regulations and more extensive bureaucracy, have fewer incentives to take risks, and are influenced by objectives and inner mechanisms that are difficult for external innovators to understand. Further, a cross-comparison of the case studies identifies that OIIs can mitigate the negative impacts of the aforementioned barriers by expanding the boundaries of innovation ecosystems, decreasing costs for distant search and data processing, fostering inter-organizational collaboration, and assisting public organizations in managing the innovation trajectory. Even so, the studied cases also illustrate that the introduction of OIIs can be contested, and that they might have hampering effects as well. Therefore, OIIs need to be carefully designed and launched so that they match the needs of the specific situations.