Urban innovation is a dynamic process through which public problems and challenges in urban environments are defined, new and creative ideas are developed, and new solutions are selected and implemented. It entails the collaborations between local governments, companies, NGOs, citizens, research institutes, and various other actors.
More than half the world’s population lives in cities and these concentrate both problems and innovative capacity. Due to technological, economic, and demographic development, cities around the world face a broad set of challenges that are related, among others, to economic growth, sustainability, safety, mobility, and welfare. These problems are often “wicked” and require creative approaches. For these reasons, innovation in cities is high on the public, political, and administrative agenda: “everybody” talks about smart cities (Townsend 2014).
At the start top-down approaches based upon strong corporate involvement were presented, but now participatory bottom-up approaches to urban innovation have been proposed. These approaches build upon notions such as public innovation (Borins 2014), collaborative innovation (Sørensen and Torfing 2011), and user innovation (Von Hippel 2005). While “urban innovation” is a hot topic in academic research and administrative practice, the governance of urban innovation is hardly explored (for an exception, Dente et al. 2005).
This paper enhances our understanding of urban innovation by building upon theories about innovation systems. Innovation systems should be understood as all the different actors that engage in urban innovation, the relations between them, the tools and instruments they use, and the institutional rules that guide their actions and decisions. On the basis of a review of the literature, five key functions for the governance of urban innovation are identified: mobilizing, experimenting, institutionalizing, balancing, and coordinating. This model can form the basis for urban policies aiming at strengthening the climate for public innovation in cities.
Theoretical Building Blocks
Public innovation is linked to the challenging policy agendas of governments who try to find answers to wicked problems in the domains of security, climate change, and the global financial crisis. While the study of private innovation focuses on artifacts and technologies, the domain of public innovation is broad and encompasses process, product, services, governance, and conceptual innovations. Borins (2014) distinguishes innovations that entail new collaborations in government and external collaborations, information technology, process improvement, new forms of citizen empowerment and innovative uses of volunteers and market incentives, and change of public attitudes.
A key theme in the study of public innovation is the tension between the dynamics of entrepreneurial activity on the one hand and the stability – or inertia – of democratic and administrative institutions on the other. This entrepreneurial activity is praised by some but criticized by others. Borins (2000), however, emphasizes that public innovators combine initiative and creativity with respect to the law and due process. This observation is now widely accepted, and innovation in government is largely regarded as a desirable way to enhance the production of public value.
Sørensen and Torfing (2011) highlight that public innovation increasingly takes the form of collaborative innovation. In line with the governance perspective, the outcomes of public innovation should not be attributed to single actors but rather to collaborations between a variety of public and private actors. Most work on collaborative innovation, however, focuses on specific collaborations and not on the boarder ecosystem. This paper aims to contribute to our understanding of public innovation by bringing in a theoretical perspective that helps to position public and collaborative innovation within a broader innovation system.
The perspective of the innovation system has been developed by historians to account for different approaches to and trajectories of innovation in different countries. Freeman (1995) defines an innovation system as the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify, and diffuse new technologies. This system approach challenges the assumption that differences between countries should be understood on the basis of quantitative R&D comparisons and proposes that institutional differences are crucial to understand these differences.
Hekkert et al. (2007) build upon Freeman’s work but put an emphasis on processes or functions in innovation systems rather than on the structural features. He stresses that these functions are highly important to the performance of innovation systems: “If we knew what kind of activities foster or hamper innovation – thus, how innovation systems ‘function’ – we would be able to intentionally shape innovation processes.” These activities can be labeled as functions when they contribute to the goal of innovation systems which is to generate and diffuse innovations.
Model of Urban Innovation
Local government engages in processes of collaborative innovation with various actors, and the outcomes of urban innovation should be understood as network outcomes. For this reason, assessing the contribution of local government to urban innovation should focus on the way local government governs the urban innovation system.
The governance of an urban innovation system can be modeled as a functional activity: several key functions can be identified that are crucial to the flourishing of the urban innovation system. Mobilizing, experimenting, institutionalizing, balancing, and coordinating were identified as core functions.
It is important to realize that the different functions can interact and generate feedback loops. Successful test situations (experimenting) or demonstrated uptake in work routines (institutionalizing) may, for example, result in easier mobilization of new stakeholders. Or lack of sound coordination may result in a disconnect between experimenting and institutionalizing and, consequently, a decline in engagement of stakeholders (mobilizing).
Zooming in on the Functions
Mobilization. The first function, mobilization, means stimulating other actors to engage in innovation processes as the starting point for processes of collaborative innovation. The most obvious group of actors to mobilize are civil servants. Bason (2010, p. 118) highlights that innovative organizations must leverage the innovation capacity of all civil servants and not just dedicated project teams or R&D departments. The urban innovation system, however, entails much more than just the government organization, and mobilization of external actors is a key difference between collaborative and single-organization innovation processes. Dente et al. (2005) stress that the mobilization of a variety of actors contributes to the innovation potential since more complex innovation networks result in a better performance of the local innovation system. This means that mobilizing the ideas, knowledge, (financial) support, and operational capacity of other actors is a crucial requirement for successful urban innovation systems. Mobilizing can consist of stimulating action, contracting actors for specific activities, building new networks, etc.
Experimenting. Innovation is a challenge to urban governments and other bureaucratic organizations such as certain large companies since it challenges the stability that is a key feature of these organizations. This means that another approach is needed than normally applied in bureaucratic organizations: experimenting instead of planned implementation. Bason (2010, p. 121) emphasizes that setting up safe space and environments where experimentation and learning is encouraged is crucial to innovation. The elaborate literature on strategic niche management emphasizes the need to develop innovation in friendly “incubation rooms” or “niches” before they are implemented in the “real world” (Hoogma et al. 2002). Creating robust and fertile conditions that allow for experimentation is crucial to success. There is a growing body of literature on urban experimentation. This literature acknowledges the importance of citizen-centric living labs to facilitate social learning. Sengers et al. (2015) indicate that urban experiments involve a broad coalition of actors that engage in social learning related to a socio-technical configuration to generate both proprietary and public knowledge.
Institutionalizing. While the niches or incubation rooms create opportunities for developing and testing new ideas, their large-scale value can only be established if these experiments are translated into organizational practices. The notion of institutionalizing highlights that innovation is not only about doing something new but also about connecting these new practices to established practices with the aim of improving – institutionalizing – these practices. The literature on strategic niche management highlights that niches should follow the dynamics of the surrounding environment to be adopted in a larger network. As Kemp (2010, p. 293) stated: “New technologies may remain stuck in these niches for a long time (decades) when they face a mismatch with the existing regime or landscape”. Public innovation means that in the end the practices need to become institutionalized. This may happen at the specific site of the experiment (longitudinal diffusion) but also – after a process of horizontal diffusion – at other sites. Finally, institutionalization can also occur at a higher level of government after a process of vertical diffusion. Institutionalizing entails a set of activities that start with evaluating experiments and “packaging” the innovation for dissemination, upscaling, embedding, and institutionalization. Securing long-term collaboration with partners is also a key challenge for this function.
Balancing. Balancing means deliberately weighing the different interests and values involved in the process of urban innovation and choosing the option that contributes most to societal desirable outcomes. Balancing is different from the other functions in the sense that balancing does not seem to be a necessary condition for advancing the innovation process. Balancing might even halt or slow down the processes by bringing in extra considerations and difficult issues. At the same time, balancing is crucial to realizing responsible innovation in the sense that the innovation does not harm stakeholders or neglect key interests and to ensure desirable and acceptable research outcomes (Stahl 2013). Responsible innovation can be defined as “a transparent, interactive process by which societal actors and innovators become mutually responsive to each other with a view to the (ethical) acceptability, sustainability and societal desirability of the innovation process and its marketable products in order to allow a proper embedding of scientific and technological advances in our society” (Von Schomberg 2013, p. 19). Balancing entails identifying risks, disadvantages, and tensions and discussing these to make deliberate choices. A public debate about sensitive issues is important, and ethical leadership is needed to generate fruitful interactions and support for choices. Finally, the capacity to mediate conflict is important to deal with the tensions that may emerge around urban innovations.
Coordinating. Coordinating is about managing the connections, interfaces, and relations between the various functions in the innovation system. Important are, for example, the connection between experimenting interesting experiments and using these to strengthen existing systems. Coordinating the innovation system also entails the provision of certain generic functions. For one thing, not only creatives and “tinkerers” are needed but also sponsors and champions are crucial to innovation (Bason 2010, p. 203). At a more general level, innovation leadership is crucial to stimulating a climate of innovation in the city. The culture of innovation needs to be nurtured to provide support for civil servants, citizens, and other actors who take risks in their attempt to develop new and promising approaches to wicked problems. In addition, framing the general innovation process, specific experiments, and outcomes of experiments is crucial to the process of innovation (Bason 2010, p. 175). This framing is also important for obtaining support from the institutional environment – legal, politics, administrative, and societal – for the innovations. Bason (2010, p. 254) stresses that an organization – or an innovation system – needs to have a “license to innovate”: the (institutional) environment needs to be supportive to innovation.
While urban public innovation is increasingly regarded as collaborative innovation, the role of local government in innovation is still crucial since local government is the only actor who can assume responsibility for the innovation ecosystem. Not all public innovation needs to be developed by local government, but local government has a key task for governing the local system of innovation by mobilizing actors, by stimulating and facilitating the testing of new practices, by ensuring that the lessons from successful tests are applied in “normal practice,” and by weighing the different (weak) interests and public values. In the model of governance of urban innovation, these functions have been labeled as mobilizing, experimenting, institutionalizing, balancing, and coordinating.
The key theoretical contribution of the paper to the literature is the model of urban innovation. This model integrates the literature on innovation ecosystems, smart cities, and public innovation and presents a functional perspective on the governance of urban innovation. The functional perspective helps to analyze why urban governments are or are not successful in stimulating public innovation in their cities. More specific contributions include the identification of specific activities such as managing the institutional environment, managing internal connections, and managing the technological infrastructure as important activities in the governance of urban innovation systems.
The model that we developed has direct value for urban governance. The first value lies in benchmarking and comparative learning. Hekkert et al. (2007, p. 420) highlight that the innovation systems perspective facilitates a comparison in terms of performance between innovation systems with different institutional setups. Differences between cities can be measured, and these differences can form a starting point for mutual learning. The second value is reflexive learning: the model can be embedded in a learning process in a city and help the authors to make better choices for optimizing the performance of the urban innovation system. Hekkert et al. (2007, p. 420) stress that the functional perspective has the potential to deliver a clear set of policy targets as well as instruments to meet these targets.
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