Wednesday 24 September 2008
Innovation in Government does not have to be an oxymoron
Government expenditure is a large portion of the economy, roughly one-third. There is no doubt therefore that governments can (and should) play a large role in enhancing the innovation capacity of an economy.
Governments can encourage innovation not only by establishing a national or state environment and regulatory system that fosters creativity and the application of new ideas, but demonstrate it themselves by building a supportive internal culture. Government backing for innovation is expressed through its policies, and the way its procurement activity supports innovation to achieve community service outcomes. However, the evidence suggests our national innovation performance isn’t strong. As noted by the Australian Minister for Innovation, Industry, Science and Research, The Hon. Kim Carr, “our innovation performance is hindered by poor collaboration”.
What can governments do to address this? Perhaps start with themselves. Silos between government agencies make collaboration, and therefore innovation, difficult. Government agencies are responsible for delivering their services in an effective and efficient manner. This requires new approaches to delivering services that support deeper collaboration with service partners and replace the existing transactional relationships that are entrenched by silos.
Unfortunately, innovation across government is rarely an operating objective of an individual agency. Generally lacking is an overarching whole-of-government innovation policy. Thus, although one agency might be tasked to assist the development of a local IT industry, and a second to deliver health services, a third agency responsible for procurement of health IT systems might find the lowest cost solution offshore. The objective in procurement is generally to minimise risk, maintain probity and achieve rapid implementation: none of which are conducive to nurturing innovation. This is highly unfortunate, since the government spend on infrastructure and other forms of procurement completely dwarfs the limited funds in
An over-arching, whole-of-government commitment is needed to invest in new technologies and know-how to solve national challenges such as those faced by the health system. However, a policy commitment is rarely sufficient alone; resources and a management program, perhaps modelled on the AIC’s Collaborative R&D Framework to align early development between the demand and supply sides, are also vital to ensure our nation’s challenges are successfully addressed through innovation.
Early involvement of industry and research sectors in roundtable sessions to discuss agency needs can lead to targeted R&D for “high technical risk” projects, and can occur early enough to limit risk and increase understanding of the broader requirements of the procurement cycle. The AIC is working with a number of government agencies in these areas, facilitating collaboration between multiple service stakeholders – a task that government agencies often feel constrained to undertake themselves. Together, all stakeholders examine and validate the end-to-end service model with industry and research sector capability to trial its validity in solving a government service delivery problem. Risk, costs, and IP are all shared in such a collaborative approach.
The potential cost savings to government using this approach are as significant as the potential improvements in service delivery. An independent intermediary organisation like the AIC facilitates the collaboration and mitigates the risk to government. Such activity informs procurement, by yielding better specifications in the case of a “buy” decision, and by creating better alignment between possible research and industry suppliers in the case of a “build” decision.
Governments can also foster innovation on the supply side, as a provider of their intellectual property to industry or other agencies. Innovations that government agencies apply to their own business practices are frequently embodied in the ICT technologies or data they use. Information sharing can streamline and improve services, enable cost savings, strengthen government procurement, and result in stronger collaborations with industry. The AIC has licensed over 60 programs or data sets developed by one agency into other parties. For example, the AIC has transferred a web-based portal developed in a community services agency in one state into another, formalising the transfer process to remove support and liability issues preventing transfer. The licence yielded immediate revenue of $1M for the supply agency, reduced time to market and avoided costs for the receiving agency.
Governments are much richer in IP than they think, or they care to admit. They can be significant drivers of innovation on both the supply and demand sides of the equation.
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