Table 1 PSI across levels – difference... | Emerald Publishing

Table 1

PSI across levels – difference to private sector innovation

Environment related (government)	Public innovation	Note relative private sector innovation
Budget restrictions	PSI typically acts within budget restrictions, is focused on budget control (Stewart-Weekes and Kastelle, 2015; Agolla and Van-Lill, 2016). Innovation not prioritized under limited budgets (Wihlman et al., 2016). PSI spending stands in contrast to the public sector’s obligation to utilize resources effectively (Wipulanusat et al., 2019)	Money as end, innovativeness as means
Hierarchy and Bureaucracy	Bottom-up innovation initiatives difficult to manage in old-fashioned public sector structures (Wihlman et al., 2016; Wipulanusat et al., 2019). Public sectors are typically bureaucratic, hierarchical and complex (Agolla and Van Lill, 2016), a structure not well suited for innovation (Wipulanusat et al., 2019). Initiated top-down or bottom-up (Arundel et al., 2015; Kusumasari et al., 2019)	Open innovation assumes horizontal initiatives. Ecosystem innovations
Laws and regulations	Laws and regulation controls public sector approval processes and activities in order to prevent impulsive and unpredictable actions and to ensure uniformity (Mulgan, 2007; Wipulanusat et al., 2019). There might not be room for PSI if it does not fit existing laws and rules (Mulgan, 2007). Public sector organizations cannot change their business concept overnight due to laws etc. (Wihlman et al., 2016)	The political influence, governance and legal constraints of PSI make the challenges regarding innovation differ between the sectors (Smith et al., 2019)
The silo effect	Public sectors tend to be organized in divided departments, separated by walls of different power structures and finances, which hinders the spread of knowledge and cooperation, and thereby also innovation (Mulgan, 2007; Wipulanusat et al., 2019)	Efficiency focus on firm or ecosystem levels
Organization related
Lacking leadership	Poor leadership is a major barrier to PSI (Smith et al., 2019; Wipulanusat et al., 2019). Conflicting and irrelevant goals and messages creates problems (Wihlman et al., 2016). Frequent changes of management make it difficult to manage a full innovation process (Wipulanusat et al., 2019)	Innovation leaders. Creativity as non-hierarchical processes
A risk-averse culture	The public sector tends to steer away from innovative practices due to high risk and uncertainty (Micheli et al., 2012; Agolla and Van Lill, 2016). The public sector typically attracts risk-averting employees (Strow and Strow, 2018). Media coverage intensifies the risk-avoiding culture in the public sector (Mulgan, 2007)	Entrepreneurial and risk-taking employees tend to sort themselves into the private sector in search of rewards (Strow and Strow, 2018)
Individual related
Lack of incentives and rewards	Monopolistic sectors like the public one tends to lack competition motives (Mulgan, 2007). Traditionally greater punishments for failed innovations, than rewards for successful such (Mulgan, 2007; Wipulanusat et al., 2019). Performance pay is negatively correlated with work performance in the public one (Bryson et al., 2017)	Intensity of competition, as in the private sector, provides motive for innovation (Mulgan, 2007). Performance pay works well to motivate people in the private sector (Bryson et al., 2017) The public sector has traditionally not had the same organizational culture for rewarding successful innovation as the private sector (Wipulanusat et al., 2019; Bloch and Bugge, 2013)

Environment related (government)	Public innovation	Note relative private sector innovation
Budget restrictions	PSI typically acts within budget restrictions, is focused on budget control (Stewart-Weekes and Kastelle, 2015; Agolla and Van-Lill, 2016). Innovation not prioritized under limited budgets (Wihlman et al., 2016). PSI spending stands in contrast to the public sector’s obligation to utilize resources effectively (Wipulanusat et al., 2019)	Money as end, innovativeness as means
Hierarchy and Bureaucracy	Bottom-up innovation initiatives difficult to manage in old-fashioned public sector structures (Wihlman et al., 2016; Wipulanusat et al., 2019). Public sectors are typically bureaucratic, hierarchical and complex (Agolla and Van Lill, 2016), a structure not well suited for innovation (Wipulanusat et al., 2019). Initiated top-down or bottom-up (Arundel et al., 2015; Kusumasari et al., 2019)	Open innovation assumes horizontal initiatives. Ecosystem innovations
Laws and regulations	Laws and regulation controls public sector approval processes and activities in order to prevent impulsive and unpredictable actions and to ensure uniformity (Mulgan, 2007; Wipulanusat et al., 2019). There might not be room for PSI if it does not fit existing laws and rules (Mulgan, 2007). Public sector organizations cannot change their business concept overnight due to laws etc. (Wihlman et al., 2016)	The political influence, governance and legal constraints of PSI make the challenges regarding innovation differ between the sectors (Smith et al., 2019)
The silo effect	Public sectors tend to be organized in divided departments, separated by walls of different power structures and finances, which hinders the spread of knowledge and cooperation, and thereby also innovation (Mulgan, 2007; Wipulanusat et al., 2019)	Efficiency focus on firm or ecosystem levels
Organization related
Lacking leadership	Poor leadership is a major barrier to PSI (Smith et al., 2019; Wipulanusat et al., 2019). Conflicting and irrelevant goals and messages creates problems (Wihlman et al., 2016). Frequent changes of management make it difficult to manage a full innovation process (Wipulanusat et al., 2019)	Innovation leaders. Creativity as non-hierarchical processes
A risk-averse culture	The public sector tends to steer away from innovative practices due to high risk and uncertainty (Micheli et al., 2012; Agolla and Van Lill, 2016). The public sector typically attracts risk-averting employees (Strow and Strow, 2018). Media coverage intensifies the risk-avoiding culture in the public sector (Mulgan, 2007)	Entrepreneurial and risk-taking employees tend to sort themselves into the private sector in search of rewards (Strow and Strow, 2018)
Individual related
Lack of incentives and rewards	Monopolistic sectors like the public one tends to lack competition motives (Mulgan, 2007). Traditionally greater punishments for failed innovations, than rewards for successful such (Mulgan, 2007; Wipulanusat et al., 2019). Performance pay is negatively correlated with work performance in the public one (Bryson et al., 2017)	Intensity of competition, as in the private sector, provides motive for innovation (Mulgan, 2007). Performance pay works well to motivate people in the private sector (Bryson et al., 2017)The public sector has traditionally not had the same organizational culture for rewarding successful innovation as the private sector (Wipulanusat et al., 2019; Bloch and Bugge, 2013)

Source(s): Authors’ own work