If scarcity drives innovation, how do you resource it?

A common refrain in the public sector is that there isn't enough time, money or resources to innovate in the public sector, and that if we only had the space, the opportunity and the support necessary so much more innovation could happen. Indeed, Empowering Change identifies lack of resources as a key barrier to innovation. But is that really the case?

The recently released European Innobarometer for 2010 focused on innovation in public administration. This survey looked at the innovation strategies in 4,063 public administrations organisations in response to changing constraints and opportunities. The report has a lot of interesting material, but the issue I want to raise in this post is the drivers of innovation and what that might mean for supporting public sector innovation.

The report identifies[1. The authors of the study note that it was a pilot survey and that its results should be interpreted with great caution.] that some of the key drivers of innovation in the public sector were found to be the introduction of new laws and regulations, new policy priorities and mandated decreases in budget. 37% of innovating organisations surveyed said that this last factor was very important (though this increased to 51% in organisations over 250 employees), followed by 29% who said it was somewhat important. So two thirds of organisations thought that budget decreases led to them innovating.

By contrast, 78% of organisations across the EU identified a lack of resources as a barrier to innovation, and 63% believed that budget increases would have a positive impact on the ability to introduce new or significantly improved services in the next two years.

As the report says of this underlying tension:

"In the case of budgets, expectations do not seem to correspond to the current reality. The overwhelming majority of public sector managers stated that more money would positively affect (63%), and less money would negatively affect (69%) their organisation's innovation capability. However, current results suggested that budget cuts were - insofar - more efficient drivers of innovation than were increases in available funds."[2. This quote is not covered by the Creative Commons licence or Commonwealth Copyright. From Innobarometer 2010: Summary, Eurobarometer, European Commission, January 2011, accessed at http://ec.europa.eu/public_opinion/flash/fl_305_sum_en.pdf]

Of course this doesn't cover the type or quality of the innovations introduced under such circumstances, nor how effective their implementation was, nor whether they lasted.

It could be that funding makes a crucial difference to the enduring quality and success of an innovation. It could also matter where the funding/resources are cut from - for instance, an across the board budget cut might promote innovation, but only if the core capabilities of the organisation are still resourced. And there is some evidence in the literature to suggest that significant staffing cuts can undermine any commitment to innovation by remaining staff. While there are caveats to the Innobarometer findings, they raise interesting issues for us in the public service.

What might these findings mean (noting potential limitations in the survey results) for how to support public sector innovation? How does it fit with your experience of the public sector?