Conditions for innovation in public sector organizations

While a large literature has emerged on the likelihood of innovative activity for firms in the private sector, due to a scarcity of data little is known why innovative activity varies across organizations in the public sector. By utilizing a new source of data, the 2012 Australian Public Service Commission data (n = 21,093), this paper is able to overcome these data constraints and provides one of the first studies focusing on the likelihood of innovative activity in the public sector. The empirical evidence suggests that important conditions specific to the public organization influence the likelihood of innovative activity. In particular, experimentation, responding to low-performers, the existence of feedback loops, and motivation to make improvements enhance the likelihood of innovative activity. In contrast, budget constraints do not have a statistically significant effect on single innovation. Thus, the results of this study suggest that intrinsic factors such as experimentation and motivation to improve performance are crucial for achieving innovation in the public sector context.