Public sector innovation: Sources, benefits, and leadership

Despite increasing research into public sector innovation, there remains a need for more theory and evidence about the sources (actors) and outcomes (benefits) of innovation. Thus, this study examines the effects of four important sources of innovation (government, organizational leaders, employee workgroup, and members of the public) on the perceived organizational benefits of innovation in the public sector. Using survey data from the Australian Public Service (n = 3,775), the findings suggest that bottom-up innovations, particularly ideas emanating from the employee workgroup, are crucial for bringing about positive effects (as measured by decreasing costs, improving processes, and increasing service quality). In contrast, ideas emanating from organizational leaders are negatively associated with organizational benefits. Nevertheless, high-quality leadership moderates the adverse effects of top-down innovations. The theoretical and practical implications of these findings, as well as future research directions for the study of public sector innovation, are discussed.