Dubai, United Arab Emirates-Wednesday 25 September 2019 [ AETOS Wire ]
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 across 142 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. In the
Middle East, 66% of respondents described the current innovation in
their organisation as ‘incremental’ in nature. Whereas, a majority of
Middle East respondents (53%) felt that innovation needs to be
‘directed’ and ‘radical’ to meet today’s complex challenges.
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. 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.’
Recommendations for change
The top three findings in the report also offer recommendations for change:
1.
Public finance professionals believe that governments need to shift
from the current dominance of incremental innovation to more radical
forms of innovation.
This
means that policymakers and public sector leaders should share a vision
and strategic direction, allowing staff to understand how the
organisation can proactively address the complex challenges it faces.
2. The finance function has a critical role to play in the wider public sector innovation process.
Public
finance professionals should apply the concepts of integrated thinking
and value creation through multiple forms of ‘capital’ to help in the
construction and assessment of business cases for innovation.
3. It is through the power of connections that public finance functions will be able to realise fully the desired shift to more radical forms of innovation.
Public
finance professionals should work with finance business partners to
connect across the organisation and help shape a culture of innovation.
The report explains that there are three public sector specific challenges for radical innovation:
- Maintaining a stable environment while innovating – bringing new idea to life can be disruptive, and this is a risk for public services that often serve the most disadvantaged in society;
- First-mover disadvantage – where the public sector has the disadvantage of organisation-specific risk, combined with potential system-wide benefits;
- And the challenge of diffusion and the need to spread innovation effectively – since innovation can often be context-specific and competitive forces do not comparably operate in the public sector to spur widespread adoption of successful innovations.
Alex
Metcalfe adds: ‘Unlike the private sector, moving to radical innovation
for the public sector is a challenge in itself – stability has to be
sustained. This is a double-bind for the public sector innovator. With
the public sector, first-mover advantages do not apply, not just because
of the lack of traditional market pressures, but also due to the need
to manage risk while trying to scale-up innovation.’
Respondents
were asked to rank ‘what are the main challenges for your organisation
that require innovation?’ Skills and talent were ranked as a concern for
54% of the private sector, compared to 60% of the public. Budget
reductions concerned 61% of the private sector, compared to 57% of the
public sector. The biggest difference between public and private sectors
came in the challenge of sustaining trust – with 40% of the public
sector saying this was an issue compared to just 9% of the private
sector respondents.
The
report ends with an assertion that nurturing innovation is
collaborative. Alex Metcalfe concludes: ‘ACCA believes that innovation
is not just for entrepreneurs and ‘rule-breakers’. It takes team work to
innovate, people with a diverse range of perspectives and skills who
can meet the challenges of radical innovation. This is the wider
innovation ecosystem, the web of connections, skills, information,
perspectives and insights, and where public finance professionals play a
role as key enablers and supporters of change.’
About ACCA
ACCA
(the Association of Chartered Certified Accountants) is the global body
for professional accountants, offering business-relevant, first-choice
qualifications to people of application, ability and ambition around the
world who seek a rewarding career in accountancy, finance and
management.
ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179
countries, helping them to develop successful careers in accounting and
business, with the skills required by employers. ACCA works through a
network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.
Through
its public interest remit, ACCA promotes appropriate regulation of
accounting and conducts relevant research to ensure accountancy
continues to grow in reputation and influence.
ACCA
has introduced major innovations to its flagship qualification to
ensure its members and future members continue to be the most valued, up
to date and sought-after accountancy professionals globally.
Founded
in 1904, ACCA has consistently held unique core values: opportunity,
diversity, innovation, integrity and accountability. More information is
here: www.accaglobal.com
Contacts
Monique McKenzie
E: Monique.McKenzie@accaglobal.com
Tel: 02070595030
Mobile: 07725613447
Twitter: @ACCANews
