Innovation - Service innovation - Public Services Innovation

Manchester Manchester MIIR Instituteof Institute of O Innovation Innovation Research Research Innovation Service Innovation Public Service Innovation what messages from the collision of innovation studies and services research? Ian Miles Ian.Miles@mbs.ac.uk, Ian.Miles@hse.ru1st International EIBURS-TAIPS Conference on: Innovation in the public sector and the development of e-services DESP, University of Urbino, April 19-20 2012

Public Services – pioneers in large-scale computer useBack-officeefficiency:DHSSLongbentonICL 2970Late 1970s Pictures from: http://www.cuin.co.uk/oldbuggas/layby.htm http://www.flickr.com/photos/icl_2900_computers

Public Services – basic office automation Local government; Back-office computerisation dramatically increasing speed of service delivery

Electronic Public Information – mid 1980s LAVA had over 120 members at peak Local Authority Videotex Association Library Services Highway Services  Council Meetings  Careers, Job Openings Contact UsTechno-enthusiasts in local government. Vision of public access to data and ultimately transactional and interactive applications to widen democracy

The Prestel story• Introduced by Post/Telecomms – “public authority”- in manycountries (prestige/ national champions/ learning to be informationsocieties. Engineers looking for new services, initially as public utilities.• In UK unpromising pilot studies were ignored – innovators wereconvinced that this was the wave of future, and that they had thedesign paradigm (not used to consumer choice).• Expectations of massive take up – millions – but slow growth, nevermuch more than 100k adopters in UK• Many information services put material online – but TV manufacturingindustry was uncooperative (teletext as competitor!)• Consumer resistance to tying up TV and telephone, especially wherelittle value-added information content; consumer adoption low: mainlybusiness (esp. travel) and hobbyist use.•French Minitel story completely different – helped by free provision ofterminals incorporating screens, new telecomms links – but also moreopen attitude to content providers and more transparent pricing; andlearned from experiments about importance of interaction(messagerie).

NHS DirectInspired by example of telephone banking – why can’t we offer a user-friendly one-stop shop.

Defence Research – saving soldiers Worked with Cambridge team using new tools for design of steels; then needed to persuade manufacturers to try out production (and engineering firm to punch holes). Key individual drove project over a decade.

Competition?• Certainly not the only driver of innovative effort: • Engineering and management aesthetics • and fashions • Public interest motivations• Often these sorts of personal commitment factor are important in creatingproduct champions who are vital for large-scale project success. (Which canbe a problem with scaling up of services: loss of original visionary.)• Competition at level of individuals seeking status and social prestige, inprofessional communities and work environments, and often route to mobilitywithin (bureaucratic and other) organisations.• Structurally: Competition in terms of assessment of performance againstother comparable organisations – NPM-type performance indicators (andtheir sometimes perverse use by policymakers and citizens).• Competition against private service providers (with different cost structures,often related to lack of full-service, universal service requirements), andagainst self-service and other innovations using new technologies or socialinnovations.

Public Services – definition for purpose of thisaccount O Public administration and defence, compulsory social security (division 84) P Education (division 84) QA Human health services (division 86)NOT State-Owned Enterprises in, e.g., post and QB Residential care and social worktelecomms, transport, utilities… Though activities (divisions 87 + 88)sometimes there are striking parallelsBigger question of “public services industry” R Arts, entertainment and recreation (divisions 90 to 93)Mainly human and informational transformations.

Stylised Features• Public services are typically very large scale organisations –especially where run by national governments or large regional bodies.• Services that interact with the public typically have numerous local branchesof several types. Some are more or less replicas of other local branches, somemay be specialist establishments.• Often service ”consumers” have many touchpoints, extended over lengthytime, and possibly with a succession of establishments and service workers.“User” is often multiple, including (e.g.) wider family/community (in differentroles).• Local branches have moderate to high levels of managerial and professionalautonomy – subject to political influence; and variations across services.• Multi-level governance structures are common.• Limited ability to raise funds or determine long-term budgets.• Some have very high levels of highly qualified staff – education, health, socialwork, often with many specialisms within these (and often much “boundarywork”) .Some are dominated by mid-range staff – public administration, socialsecurity. Some are more a matter of low-skill workers – sanitary services andthe like. Thus, almost as varied as the service sectors themselves.

Diversity in Workforce education EU, 2000 HIGH SKILL Education Business Sers._ Health & Soc. Sers. Other Sers. FIRE Manufacturing Trade Agriculture Transport Pub. HORECA Admin.LOW MEDIUM 11SKILL SKILL

Innovation Research• Traditional (Manufacturing) Innovation Research – mainly focused on technological product and process change. (assumes it is generally beneficial, at least for competitiveness.)• Service Innovation research – service innovation (new service development) vs innovation in services• Assimilation versus Demarcation perspectives. Demarcation stresses: oInvolvement of Customers/Clients (rather than remoteness from production): • Coproduction (interactivity) • Product/process interpenetration • Experience (content) • Interaction with staff (mutual learning) oIntangibility (rather than physical goods): • Comparability, demonstrability • Issues of IPR, less standard technology/ R&D focus • Services as newcomers to advanced technology oOrganisational innovation (business models/ policy?)

Non-technological innovation (doesinvolve technique and knowledge)

Organisational (institutional)innovation Assesses and supports best practice – issue of metrics – but critique from lobbies about suppressing some “innovations” http://www.nice.org.uk/aboutnice/

Service Innovation Research• Much survey work addresses innovation in services - private service firms (of size >ten employees)• Reports different patterns in services of different types – and diversity across firms within sectors – could thus anticipate the same across different elements of a broad public service, if not necessarily across different local branches of one such element.• Confirms that many services emphasise organisational innovation more•But technological innovators also tend to be organisational innovators•Huge variation in levels and styles of innovationoKIS > manufacturingoTraditional services report low levels (partly a scale issue)

Schematic Service Process[inspired not least by RobGlushko’s extensive work on frontand back stage service processes] Business Partners If back-office innovation is largely driven by pursuit of efficiency, then we might expect rathersimilar trajectories in Back Front User ( and both public and Office Office wider userprivate services – andoffice-based aspects (back (front stage) communities) of manufacturing stage) Even if less competitivenessdriver, scale of public services may promote early Employees Organisation Infrastructure Infostructureadoption of office IT - & organisational innovation?

Schematic Service Process May be multiple back Many different Business Partners roles; outsourcing. offices – representing PPPs, suppliers ofdifferent layers innovative goods of and services – role organisational of third sector. hierarchy – up Back Front to the User ( and responsible Office Office wider user ministries/ (back Service – and (front stage) communities) govt. site of new stage)Departments – service and functional delivery in case specialisms of service e.g. hospital innovationlaboratories vs. Employees Organisation Infrastructure Infostructure management structures

Barras’ Reverse Product Cycle + New IT – Supply new IT plustechnological Business Partners organisationalrevolution in advice/models service industries – introduced Users employ initially for own platforms efficiency Back and access reasons in Front User ( and data from large-scale Office Office wider user many sources data (back communities) to increase (front stage) processing stage) own capabilities in Learning about IT service capabilities, and coproductionexploitation of dataon individuals (etc.), New services Employees Organisation Infrastructure Infostructure together with produced orimproved IT, means delivered byscope for improved new IT quality in service

New and Improved Public Services Third Sector – social Business Partners innovation as wellData analytics, as technological data sharing across New roles for boundaries Users and(though some Communitiesprivacy issues Back Front and the like). User ( and – including Office Office wider user user (back communities) innovation (front stage) Scope for rapid stage) New servicesfeedback e.g. from based on better experiments, data on user prototypes; new characteristics service design and contexts, Employees Organisation Infrastructure Infostructure and on more New data and understanding – neurosciences, ecological data, and intensive data problem-specific tools including new IT (visualisation, robotics) but also exchange – not others relating to specific services (e.g. pharmacy, surgery). just e-delivery

P den Hertog,Location – and Dimensions - of Service W van der Aa, M W. de Jong, (2010) "Capabilities for managing service innovation:Innovation (den Hertog) towards a conceptual framework", Journal of Service Management, Vol. 21 I(4), pp.490 – 514 Value System Business Partners Customer Interaction Revenue Service Model Concept Back Front User Office Office (wider user (back (front stage) communities) Delivery Delivery stage) (Technology) (Organisation)Innovations often Employees Organisation Infrastructure Infostructureinvolve change onseveral dimensions

P den Hertog,Capabilities required for Service W van der Aa, M W. de Jong, (2010) "Capabilities for managing service innovation:Innovation (den Hertog) towards a conceptual framework", Journal of Service Management, Vol. 21 I(4), pp.490 – 514 Value System Business Partners Customer Interaction Partnering, M&A, Marketing Revenue procurement Service Model Concept Back Front User Sales, Office Finance, strategy Office after sales (wider user (back (front stage) communities) Delivery Delivery stage) Technology (Technology) (Organisation) HRM “Sales” and “revenuePlus, public services: model” terminologiescapabilities in less relevant: Employees Organisation Infrastructure Infostructuremediating between performancepolitical and assessment andoperational indicators more.

Public Service Innovation Prospects• Major challenges: • Fiscal Crisis (continued) – pressure to cut costs (e.g. use of paraprofessionals) and outsource (including to third sector). Scope for political crises and media agenda-setting. • Demographics and Global Issues creating new conditions of social needs (including those relating to service success) • User expectations, demands and activity • Rapid technological change in IT, and much learning across many organisations; new “consumer” platforms, new functionalities (e.g. locational data, health monitoring) • Privacy and data security (and other system vulnerabilities)• Opportunities to learn: • Open Innovation • Adaptation of ideas and frameworks – including lessons from New Service Development e.g. project-and product orientation, analysis of innovation relative to market (not just supplier), measurement of quality and performance; and from Service Design tools, philosophies, communities. • New IT capabilities, e.g. data analytics • “Consumers” as a Resource.

Implications for Innovation Studies• Synthesis approach contributions: • Nature and trajectory of innovations as shaped by factors beyond competition, regulatory compliance, and the usual suspects. • Variety across both public and private services in terms of governance, regulation, public and media relations, etc. Possibly some sets of service where similarities and differences depend on features other than public/private characterisation. Need to explore and establish ways of assessing capabilities. • Networks of innovators include organisations with distinct drivers and structural features, which need to be seen in wider terms than “barriers”.• Between theory and practice: • Grand challenges confronting our societies almost always require combination of goods and services, private and public action. Understanding public service innovation can inform analysis and design of grand responses. (Example – active independent living, with health monitoring and lifestyle enhancing technology and communication systems supported by new structures of health and social care service organisation and provision.) • Or more modestly, public-private partnerships are commonplace (though groundrules evolving), and wider understanding required to grasp innovation in such circumstances.

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Innovation - Service innovation - Public Services Innovation

by Ian Miles

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