Innovation beyond the market? Public sector innovation and economic development in South Australia and Western Australia

Abstract

Approaches to territorial innovation for regional economic development have held a longstanding focus upon firms and private actors and left the roles of state actors and public sector innovation neglected and under-researched. Engaging with economic geography literature, state literature, and the often aspatial public sector innovation (PSI) research (following its increased utilisation amongst state and quasi-state actors internationally), this study aims to fill this gap and elaborate a conceptual and analytical framework for understanding the role of PSI in a context of regional economic development. The study focuses upon establishing the conceptualisation and operationalisation of PSI in the context of economic development at the subnational level and the roles of internal processes in the public sector and external forces on PSI. A comparative empirical analysis of PSI is undertaken in a context of economic development in two regions, South Australia and Western Australia. Contrasting their different relationships between public sector innovation and regional economic development, the study finds that: i) PSI has been used to articulate and justify efficiency-oriented and market-led reforms, preventing a shift from neoliberal paradigm; but also as a way of shifting toward post-NPM approaches which help engage into somewhat different approaches to regional economic development; ii) approaches to PSI have been shaped by the roles of the public sector within the State economies, levels of resources, leadership, and collaboration and interactions within the public sector and with external partners and the public; and, iii) the increased scrutiny and feedback from voters to public sector strategy, policy and delivery has exerted short-term pressures, which can be unconducive to innovating for long-term regional economic wellbeing. The study concludes that PSI offers potentials and issues for regional economic development, shaped by the region’s institutional history, economic and geographical context.