>br< Creating innovation in Swedish Municipalities

Thomas Wihlman, kulturjournalist

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Creating Innovation in Swedish Municipalities


This article gives an overview of a study into innovation in welfare services, conducted in four Swedish municipalities. Data collection was made both from official documents and from interviews, using a variety of methodological approaches.
The result indicates that there were difficulties in implementing innovation policies. Major hindrances were lack of structures and support, understanding of the innovation concept lacking communication but also that other priorities were made. Still, there was support for the ambition to be innovative, especially from employees and middle management.
The study gives, based on the empirical findings, insight into the difficulties of implementing innovation municipal welfare services. It improves our understanding of innovation management and innovation processes in the municipalities studied. The study also contributes to the discussion of how a concept such as innovation needs to be adapted to the welfare services of the public sector if it should be useful. It also suggested that further concept development, as well as empirical studies, are needed.


Policies, local government, employee-driven innovation, management, leadership


Innovation within the public sector has in recent years met increasing interest in research. However, innovation is nothing new to the sector. Internet may be seen as such an example, and the experiments with governments supported new methods within agriculture (Rogers). However, since the advent of New Public Management the interest in public sector innovation seems to have increased. This may be seen from various literature reviews (Fung et al., 2011, Grødem, 2014). In this study, we particularly turn to welfare services. In Sweden, where the study described here was conducted, this is the major part of the public sector.
Innovation in the public sector has hitherto mostly been tackled on the political policy level, referring to the importance of innovation. The Government´s innovation strategy (Government of Sweden, 2012) also points to less interest in creating innovation within public organizations themselves but more so through innovation procurement from external providers. A cooperation initiative between SALAR (The Swedish Association of Local Authorities and Regions) and Vinnova (Swedish Governmental Agency for Innovation Systems) was also agreed upon in 2012 (Sveriges Kommuner och Landsting, 2012) and is likely to be renewed in 2015. To remain competitive and to improve the quality an interest in innovation has emerged amongst some municipal and regional providers themselves.
Another important background factor is the emergence of New Public Management and a new competitive pattern for public providers. Schools and care of the elderly, mainly tax-funded, is the responsibility of the municipalities, but private companies also provide these services. Thus, in Sweden a substantial amount of services within childcare, care of the elderly and education is carried out by private providers, contracted by the municipalities. In some municipalities the majority of elderly care is private, in some municipalities also the majority of pupils go to private schools. All in all; most users are serviced still by public providers, in this case, the municipality itself. However, in many instances there is a genuine competition between public providers and contracted private providers.
Also, the Swedish municipalities differ from many other countries. Many Sedes only pay tax to municipalities and the county councils, not to the state.
In this study, the four municipalities taking part had all expressed their interest in innovation, and this was also manifested in strategic documents, such as policies and long-term plans. Such documents are part of a process with preparation at the senior management level, anchoring and decision at the political level.
However, for this research project on innovation in municipal welfare services, a starting point for participating municipalities was their experience that actual innovation was not taking place. This was despite work had been done in the organizations in both formulating the mentioned innovation strategies and to communicate the importance of innovation to managers and employees. Our primary aim was to study how the policies were realized, and the research questions in the study were: 1. what was the attitude towards innovation and the realization of the policies and 2. What were the actions taken to realize this objective, were there any particular barriers and possibilities. Finally, the aim was to discuss what could be done to improve innovation in municipalities. This was all done studying three different organizational levels, namely senior management, middle management and employees.
This article is based on research literature and our empirical findings and with the aim to contribute to improved innovation within welfare services, as desired in policies. Our data collection is based on interviews and a descriptive content analysis of documents. It is organized as follows: At first the theoretical framework is introduced, areas of research found relevant in the context of public sector innovation and this study. After the description of the methods used and the data collection, we describe the results, both from the documents studied and from the interviews. Finally, we discuss the findings and their relation to the aim and the research questions and also make some suggestions for further research.


Research on public sector innovation still is rather scarce according to literature reviews, not at least within welfare services (Grødem, 2014, Matthews et al., 2009). Most research in implementing ideas and turning them into innovation has not focused on the Public Sector. Due to the tightening economic climate, aging population, and the existence of so-called wicked problems innovation within municipalities is also described as important (Bason, 2010). Research has also shown that it is happening. According to studies made (Borins, 2001, Earl, 2002, Borins, 2012) innovation is on the same level as innovation in other organizations, and it often comes from employees or middle management.
Existing research also points to several factors differentiating public sector innovation from other areas, like the attitude towards risk-taking, short-term budgets, and administrative burdens (Albury, 2005), However, there is also research including factors being beneficial for public sector innovation, such as political support (Hartley, 2014). Regarding management, leadership in the public sector is often described as different from business, such as managers have to include that politics is involved. Also, managers often have many subordinated employees as compared to businesses (Wallin et al., 2014, Höckertin, 2007).
Politics and the involvement of politicians may be advantageous, giving support to the new ideas (Borins, 2002, Hartley, 2014) so complicating the situation for managers it may still be of benefit. Beneficial to innovation may also be the leadership. Scandinavian leadership is often characterized by low hierarchy and a non-authoritarian leadership. This may create favourable conditions for participation, autonomy and accordingly innovation (Lindell and Arvonen, 1996, Smith et al., 2003), giving increased opportunities for workplace innovation and particularly employee-driven innovation, EDI (Høyrup, 2010). Such examples may also be found in municipal welfare services, where a high degree of delegation and autonomy has led to ideas and innovation from employees, leading to benefits for the users, the employees as well as financially for the municipality (Swan and Blusi, 2013).
A form of leadership that also may prove useful is generative leadership (Surie and Hazy, 2006). The core of the generative leadership is that it aims to create the necessary conditions through connectivity and interaction, that is, a communicative culture, rather than focusing on creativity and individual traits. In situations where communication between users and employees is important, and is supported by management, this may be advantageous for EDI.
Thus, EDI may be seen as a possibility, especially in this context where employees frequently meet the users, and this dialog may spark innovation (Klitmøller et al., 2007). This situation also relates to practice-based learning which consequently also is favorable towards innovation (Ellström, 2010). In these respects, welfare services are similar to the service sector, in general. However, the innovation concept and its usefulness in the Public Sector has also been challenged (Shleifer, 1998) due to the lack of incentives as well as definitions of innovation are seen not to be appropriate to the Public Sector (Langergaard and Hansen, 2013). Innovation is a concept with many definitions, also within the public sector context as studied by Perry (2010).
From the service sector in general it should also be useful to study service innovation knowledge, as there are of course similarities, such as the service consumed in the meeting between the user and the employee.
The intention of the documents produced by the municipalities is that they should be followed by some action towards creating a more innovative culture and more innovations. We may describe this action as using the organizations dynamic capabilities (Teece et al., 1997), which may be in the form of HR-policies (salaries, recruiting), finances, information and systems (structures for handling innovation) to promote innovation. As Piening (2013) describes it, the concept of dynamic capabilities is also well suited for the public sector. In this respect, we relate this concept to action taken by management.


The study was executed in four parts, having a variety of methodological approaches. For the interviews, thematic analysis was used and for the study of the documents both a quantitative and qualitative approach, including descriptive content analysis and a critical discourse analysis of certain significant documents. Data was collected from 38 interviews and 58 documents at the national level and 53 documents at the local level.
The first study consisted of its major parts of interviews with 27 employees within eight different units in four municipalities. The interviews focused on barriers and possibilities for the employees to participate in innovation at their workplace. In the second study, we conducted interviews with five senior managers and six first-line managers (middle management). The interviews were analyzed in a thematic analysis, aimed at forming central themes for our research questions. Strategy documents from the municipalities and if these documents raised innovation-related questions were also analyzed. All interviews except one were recorded and transcribed, for one of the interviews notes were taken.
In a third study through content analysis and thematic analysis, 55 documents from the Government and its authorities were reviewed. The aim was to form a background on official policies and strategies and to understand to what extent these documents covered welfare services innovation and if so, what questions were raised. In the fourth study, the use of the innovation concept was analyzed, through a critical discourse analysis. Thus first two studies were mainly practice-oriented, the two other studies policy oriented.
As the approaches were different, appropriate methods for each study was sought. The municipalities and unities were chosen to represent municipalities of differing size, structure and covering a variety of fields such as social services, care for the elderly and education. The aim was not to compare the municipalities but to have the research questions highlighted in a variety of contexts contributing to understanding of innovation within welfare services.


Five senior managers and six middle managers were interviewed for the first study. In addition, 53 documents related to innovation were studied to understand the local policy background. The main findings were the gaps between hierarchical levels. Senior management identified several barriers to innovation, mainly of a structural sort and described as Tayloristic organizational elements and the like. Innovation developed in the units and cited by middle management and employees was not acknowledged as such by senior management; instead, senior management noted barriers to middle management and employee innovation, such as very tight staffing. Senior management also recognized that there was a lack of support for innovation, which was not well “orchestrated.”
On the other hand, middle management claimed that innovation was taking place and that it indeed was possible to be innovative. However, there were constraints such as lack of time, as acknowledged by senior management and the prioritization of other tasks.
The two management levels also communicated poorly with each other regarding innovation and differed in their innovation focus.
From this study, it was learned that systematic innovation management did not exist in the organizations studied. There was a lack of a holistic approach, dealing with support, organizational culture as well as development factors such as learning. For example, there were no facilitators or support to take an innovative idea to implementation. Resources for HRM and learning, were not used systematically to support innovation. Between the management levels, there were differences regarding innovation regarding what kind of innovations that were useful and if innovation was taking place or not.
The second study, based on interviews with 27 employees, identified three main themes that had a great impact on the innovation performance of the studied organizations. These themes were support (including leadership and innovation processes), development (including creativity and learning) and organizational culture (including attitudes and communication). Employees were thinking in terms of innovation though they rarely used the word. They acted and realized new ideas despite the absence of formal, structured innovation processes, organized innovation support, and innovation management.
Having sufficient time and latitude to discuss and develop ideas with colleagues was important. Employees felt stressed by having to keep up with regular activities while attempting to innovate as well. Time was a more serious constraint than were economic resources. Another problem at times was the attitude of colleagues, which could be negatively disposed towards new ideas. Detailed control of the organization was also found to be an obstacle to utilizing employee expertise, impeding the emergence of ideas that employees wanted to test and develop.
The interest for innovation was manifested both amongst middle management and employees. They had incentives, albeit of a different character than within the private sector, but the concept of innovation and its use was not discussed within the organization.
Regarding the policy studies the first policy study was based on 55 documents published by the national government and its agencies, all having a content, which included innovation. Welfare services were visible in the documents, especially when they were a driving force for innovation in the public sector. This applies especially when public procurement becomes a vehicle for business innovation. When municipal welfare services became visible, there were often references to a need for efficiency improvements. The study concluded that there was no coherent national innovation policy for the public sector and weak government support for public sector innovation.
In the final study of four documents, three at the national level and one at the municipal level, it was demonstrated that the social practice of NPM was evident at the central governmental level. However, it was less so at the local government level, suggesting that innovation may be understood and used very differently by these two levels of government. Innovation can be used internally as a concept promoting change and effectiveness in a competitive society, but it can also be used in hegemonic ways to promote certain values and beliefs in society. From the interviews, it was evident that the interpretation of the innovation concept varied widely. A conclusion is that these differences could be considered when discussing and working with innovation, as innovation is understood and used differently.


The study indicates that senior management needs to act and use the organization´s dynamic capacity; innovation does not happen if it is only written in the policy or another form of a strategic document. Thus, both policy and practice is essential.
However, there are several questions still to be asked regarding this study. Some of the major ones are: Why were not the policies followed by the appropriate action use of the dynamic capabilities? Why were there such discrepancies between the views of senior management and middle management? Were the respondents fully aware of the policies and of what innovation is? The study also had limitations. It was carried out in a particular setting, and the results may have been different if other sectors, such as healthcare, had been involved.
The discussion may be formulated in terms of hypotheses, related to the fact that that there are several problems to realize the intentions. Some of these can be:
The reason for the limited action taken is not a lack of resources, rather the unfamiliarity with the concept of innovation and how it could be adapted to the public sector, in this care mainly welfare services.
Support for such a hypothesis may be found in the fact that in this study there apparently had been little discussion what innovation was in the municipal context and what the objective was.
Alternatively: The limited action taken is because innovation is a management virus or as a magic concept, as described by Røvik (2011) or Politt et al. (2011) there is no genuine support for the idea of innovation.
This explanation is not actually supported by the findings. On the contrary middle management are stressing the need for innovation, as a mean to improve services. Also, senior management advocates innovation. On the other hand, senior management describes the old-fashioned culture and structure as a hindrance. So it could be considered that at least senior management is hesitant. Middle management, besides the lack of support for innovation in terms of structures, systems, and facilitators, also indicates that short-term steering and control is a priority for senior management, not innovation.
The study also supports that there are possibilities for innovation (and of course innovations are also made). The leadership of middle management gives employees autonomy and freedom to test new ideas. Municipalities are also politically controlled and complex organizations. Implementation of innovations in limited areas may just be a way to go, and if the results are good, the proliferation of further innovation.
Experiences from another municipality in Sweden, Sundsvall, shows that this is a feasible road ahead. Thus, changes in home care with this approach shows that employee-made initiatives and ideas, supported by both senior management, middle management and trade unions, has been beneficial to all parties: clients, employees, and management. Also, systems and structures have been changed to support new ways of working (Swan and Blusi, 2013). However, if there is too much employee-driven innovation will management feel that they lose control? This may be asked also because there may be a potential conflict between politics and the views and ideas of employees, after all, senior management´s role is to carry out the politics decided upon in general elections and formed by the local politicians.
A well thought out management and employee philosophy, with priority in all areas (finance, learning, communication, personnel policy), where innovation is a clear and important part is evolving in the municipality of Eskilstuna (Wande, 2014). Using the concept “brave ideas” approach employees and management are encouraged to both suggest new ways of working and put them into action. This also shows that the dynamic capabilities of the organization, such as HR, are used.
Based on the research perspective, knowledge of public sector innovation is still fairly new and limited. Further research is therefore needed, including the close study of the similarities and differences between the services and the public sector in this context. It would be fruitful for research to further for example the Eskilstuna concept and compare it with other approaches. Municipalities, in general, must describe how they intend to take the step from the beautiful words in policies to something with real substance that can be expected to lead to innovation.


The study shows that the studied municipalities were not very successful in implementing their innovation policies, stated in their strategic documents and policies. It indicates that innovation, as a novel concept to the public sector, needs to be discussed and understood in the organizations. The results indicate a clear lack of communication between organizational levels regarding this, leading to misconceptions and lack of use of the dynamic capabilities, ultimately leading to fewer innovations achieved.
The results contribute to our understanding how innovation takes place or does not take place, on a practical level in welfare services. It improves our understanding of innovation management and innovation processes in this context. The study also contributes to the discussion of how a concept such as innovation needs to be adapted to the welfare services of the public sector if it should be useful. This adoption may take place within such fields as a risk and political steering, as well as within learning strategies.
Those responsible for innovation management in municipalities can learn from the importance of having a holistic attitude. It is suggested here that they need to take action involving other strategic parts of the organization to support innovation with appropriate strategies, action, and resources. If successful such an approach will also be of benefit not only to the organization and its members, but also to citizens and society as a whole. Still, further research and knowledge in to these implementation processes will be necessary.


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(Thomas Wihlman 2015, paper presented and published at the XXVI ISPIM Conference in Budapest, June 2015)