The public sector’s image as a place where little or no innovation happens is challenged in a global research report from ACCA (the Association of Chartered Certified Accountants), Innovation in public finance. The report reveals that 91% of public sector respondents said some kind of innovation was happening in their organisation, with slightly less – 90% – in the private sector claiming this was the case. Some 4,436 ACCA members from Pakistan and other 141 countries took part in the survey, with online panel discussions with 89 members across 32 countries.
The level of innovation was measured across three areas: people-based, data and technology, and process innovation, with the report aiming to investigate what kind of innovation is taking place in public finance, while also looking ahead to future challenges. The respondents’ insights reveal a public sector that is innovating incrementally. But when asked what type of innovation is required to meet today’s complex challenges, finance professionals believe governments need to embrace more radical forms of innovation. The research includes various global case examples of emerging practices in Public Sector innovation, with special focus on the Punjab Revenue Authority (PRA).
The research highlights PRA’s proactive approach to improving efficiency, placing importance on plugging leakages in the system and becoming a ‘smart’, automated organisation. Alex Metcalfe, public sector expert at ACCA and author of the report comments: ‘The findings show that innovation in the public sector is broadly incremental, and not radical or transformative innovation. But with considerable challenges facing the public sector – from budget reductions to talent shortages – our respondents said a more radical approach is needed in the future.
Their clear message is that governments need to shift from the current dominance of incremental innovation to more radical reforms.’ Matthew Taylor, chief executive of the RSA (The Royal Society for the Encouragement of Arts, Manufactures and Commerce), writes in the foreword: ‘This report dispels the lazy myth that the public sector is adverse to innovation. The future is unpredictable. Leaders – whether of nations or cities – need to be able to experiment and adapt. At the RSA we advocate ‘thinking like a system and acting like an entrepreneur’.
Change can come from anywhere in a system, but transformation means the ability continuously to experiment and adapt. ‘We need leaders whose understanding of our challenges and whose determination to make a difference is such that they will openly embark on a journey without knowing where it will end. Any leader who claims to be doing this without often feeling disorientated and vulnerable is deluding themselves. Ultimately, however, as many of those who responded to the ACCA’s survey recognised, aiming for transformation may be less risky than hoping it can be avoided.’