MEASURING PUBLIC SECTOR INNOVATION.

• Author: Sandor, Sorin Dan

1. Defining innovation

   'If you can't measure it, you can't manage it' is a widely used but incomplete quote often attributed to Deming or to Drucker, the original source being--'It is wrong to suppose that if you can't measure it, you can't manage it' (Deming, 1994, p. 35). Osborne and Gaebler (1992) use a similar catch phrase in order to emphasize measurement: 'What gets measured gets done'. Starting from the 1990s, performance indicators became more and more popular and in more and more fields of activity. Governments around the world are widely using measurement systems for innovation thinking that measuring innovation is a must in order to manage it.

   The first step of any measurement process is defining the concept that has to be measured. Innovation was explored since Schumpeter saw it as a central source for economic development more than a hundred years ago (1911). In Schumpeter's view innovation was the commercial application of a new idea. Only by the end of the 1980s the first attempts to define innovation in order to be measured were taken. The OECD Working Party of National Experts on Science and Technology Indicators (NESTI) codified innovation in what is known as the Oslo Manual. The first definition of innovation (OECD, 1992) was strictly about technological innovation and comprised two components: product innovation and process innovation. Only the third version of the manual was dedicated to all kinds of innovation (not only technological) and the definition became 'An innovation is the implementation of a new or significantly improved product (good or a service), or process, a new marketing method, or a new organization method in business practices, workplace organization or external relations' (OECD/Eurostat, 2005, p. 46). Two more components were added: marketing and organization methods as a reflection of the growing importance of services in the global economy. All the components mentioned by the Oslo Manual are market-oriented --and as Gault (2010, p. 155) considers, public sector innovation measurement and analysis has to be quite different from that in the private sector. Kattel et al. (2013) consider that starting from 2000 the literature on public sector innovation intended to move away from the private sector approach but this has been done mostly by adapting it to the public sector realities.

   A definition should present the main characteristics of a phenomenon while clearly distinguishing it from other similar phenomena. We identified 11 main characteristics that have to be addressed when defining innovation.

1. Innovation--is it a Process or a Result? In other words, should we measure the process or its results? Both are of interest, but we should not mix them. NESTA (Hughes, Moore and Kataria, 2011) approach is clearly process-oriented: it measures wider sector conditions, innovation capability, innovation activity and impact. Other innovation surveys are taking similar approaches. Innovation in the public sector can be defined as the process of generating new ideas and implementing them to create value for society, covering new or improved processes (internal focus) and services (external focus) (European Commission, 2013). Also, innovation can be defined as a change (Hartley, 2005). If we understand innovation as the results of the innovation process only the outputs of the innovation activity would have been of interest.

2. Size--are we discussing small, incremental improvements or are we searching for evolutionary steps? Christensen (1997) advocated for radical or disruptive innovations (those with a great impact)--but, instead, more general approaches were preferred --as in European Commission (2011)--'any significant improvement' will do.

3. Novelty--New idea vs. Existing idea. How new should an idea be in order to qualify as an innovation? The Oslo Manual, first edition, (OECD, 1992, p. 41) classified novelty as: new to the firm, the country or the market, or the world. The first two are used in defining innovation, as the last might bring an overlap with invention, but the difference between being new to the firm and being new to the country (market or sector) is a significant one. Lynn (1997) emphasizes that innovation should be original. Innovation is defined by Albury (2005) as 'creation and implementation', and by the European Commission (2013) as generation and implementation of new ideas--creation and generation implying a high degree of novelty. Definitions that equate innovation with change are not usually specifying the degree of novelty. Other definitions stick with new to the firm, like West and Farr (1990): 'new to the relevant unit of adoption'.

4. Adoption--Adaptation or Imitation? If an innovation can be new only to the institution, being already introduced elsewhere, are we discussing about adaptation or imitation? De Lancer Julnes and Gibson (2016) use in their definition the term adoption, West and Farr (1990) are talking about introduction and application, European Commission (2013) mentions implementation. We do not have a clear answer --is imitation a form of innovation?

5. Intentionality--Intentional or Unintentional? Should innovation be intentional or it may just happen? West and Farr (1990) in their definition stress the intentional character of innovation. In some definitions a certain amount of intentionality is implied, especially when mentioning generation or creation. In other definitions there is no hint of intentionality. Innovation as a process supposes intentionality. Many inventions and innovations were adopted against the will of the organizations.

6. Origin--Mandated vs. Voluntary. This is close to the previous characteristic but it is specific to public organizations in which change can be imposed from the outside through laws and regulations. If a specific law is requiring that an institution has to adopt a specific new process can we call that organization as being innovative?

7. Scope--Product, Service, Policy or Process? The Oslo Manual had in its first edition only the first two and added other two components later (marketing and organization methods). Is this too much already? Galindo-Rueda and Van Cruysen (2016) are reporting about confusions made by managers trying to distinguish between components (especially regarding organizational innovation). Should we go further than that? Is a definition like: 'Innovation is about the relationship between service providers and their users' (Hartley, 2005, p. 27) fitting these components or is it adding new ones? What about social innovation (Gault, 2010), or governance innovation (Hartley, 2005) or European Commission's (2013) innovation through initiatives that foster innovation elsewhere in society.

8. Type--Radical, Architectural, Modular or Incremental? Henderson and Clark (1990) distinguish between the types of innovation according to two different criteria--if the system or the linkages in the system and/or the components (the core concepts) have changed. A radical innovation changes both the system and the components, an architectural innovation addresses only the system, a modular innovation the components and an...