A platform-based approach to ambidexterity for innovation: An empirical investigation in the public sector

Highlights

• Public sector faces unique constraints for ambidexterity for innovation.

• Ambidexterity for innovation can be achieved through a platform-based approach.

• Product, process, and value platforms can be used to resolve constraints.

• Practices for platform development, appropriations and control are proposed.

Abstract

Innovation in the public sector plays an important role in improving the quality of public services and addressing economic and societal challenges. Most of the previous research on innovations has focused on the private sector. How organizations may achieve ambidexterity for innovations in the public sector characterized by unique constraints has been largely underexplored. Platforms have emerged as key components in organizations’ approaches to innovation. Using an empirical study in a public sector organization, this study identifies a platform-based approach that can be used to achieve ambidexterity in balancing exploitative and exploratory innovations in the public sector. Organizations facing constraints pertaining to structure, risk, and value may benefit from considering their product/service development, process management, and value formulation through this approach. This study also identifies practices in platform development, appropriation, and control that contributed to the success of the platform-based approach.

Introduction

Scholars and practitioners have become increasingly interested in innovation in public sector organizations (Boukamel, 2017, De Vries et al., 2016). Innovation in the public sector plays an important role (Demircioglu & Audretsch, 2017) in improving the quality of public services and enhancing problem-solving capacity in addressing economic and societal challenges (Bloch and Bugge, 2013, Damanpour and Schneider, 2009bbb). The scope and impact of public services are much broader than those of services provided by the private sector. At the same time, technological progress and digital transformation in the private sector are creating pressures for the public sector to innovate and meet the increasing expectations of citizens. For example, Amsterdam’s smart city project transformed urban management through innovation that integrated information technology (IT) with Amsterdam’s city services (Fitzgerald, 2016). Although important innovative breakthroughs can be attributed to the public sector, the latter has often been seen as conservative and bureaucratic (Bloch & Bugge, 2013). Most of the previous research on innovations has focused on the private sector (Demircioglu & Audretsch, 2017), although there has been a growing focus on public sector innovation recently (De Vries et al., 2016).

Prior studies have identified two types of innovations: exploitative innovations, which improve existing competencies, and exploratory innovations, which create new products, services, and processes (Jansen et al., 2006, Ortiz de Guinea and Raymond, 2020). Similar to the expectations of private organizations (Bloch & Bugge, 2013), public sector organizations nowadays are increasingly expected to strike a balance between exploitative innovations in order to achieve efficiency in providing citizen services and exploratory innovations in order to develop innovative products and services (Tate et al., 2018). The need for organizations to balance these two types of innovations (Ahmad et al., 2020) has been highlighted by research on organizational ambidexterity (Jansen et al., 2006). A major constraint to achieving ambidexterity is the lack of adequate resources to devote to the simultaneous pursuit of conflicting goals. While this constraint has received much attention in the literature (Agarwal et al., 2017), a variety of other constraints may also pose challenges to achieving ambidexterity (Lin et al., 2007). Public sector organizations may face internal, external, and network constraints beyond traditional resource limitations (Tate et al., 2018). The organizational culture, organizational structures, and competing priorities of organizational units, among other elements, may pose constraints in the pursuit of organizational ambidexterity. For example, the existence of an overarching federated structure, which is very common in public sector organizations, presents a unique constraint. A federation is an organization pattern encompassing multiple organizational units, each with its independent structure, mission, and culture. The federated organization is not a centralized entity but a more loosely coupled collection of autonomous units, each with fundamentally different functions. The mechanisms needed to develop ambidextrous capabilities under these constraints are still largely underexplored. Therefore, the present study seeks to examine how public sector organizations may achieve ambidexterity in innovation in an environment characterized by such constraints.

Platforms have emerged as key components in organizations’ approaches to innovation (Gawer, 2014, Yoo et al., 2012). Platforms are defined as sets of core assets that meet the common needs of a core group of customers while affording flexibility, adaptability, and extensibility to meet unique needs (Gawer, 2009). Prior research has posited that industry platforms foster innovation. For example, a platform approach facilitates the implementation of advanced services in manufacturing firms by enabling manufacturers to pursue both customization and operational efficiency (Cenamor et al., 2017). However, the manner in which this approach unfolds in public sector organizations remains largely unexplored. This leads us to the following research question: How do public organizations leverage platform-based approaches to develop ambidexterity in balancing exploitative and exploratory innovations?

This paper is organized as follows. In Section 2, we present relevant literature in the areas of organizational ambidexterity, platforms, and innovation in the public sector. We then provide the research methodology in Section 3, and findings in the form of a framework in Section 4. Finally, we discuss the theoretical and practical implications of the study in Section 5.