How Do Organizational Capabilities Sustain Continuous Innovation in a Public Setting?

• Author: Dario Cavenago,Benedetta Trivellato,Mattia Martini
• DOI: 10.1177/0275074020939263
• Published date: 01 January 2021
• Date: 01 January 2021
• Subject Matter: Articles

https://doi.org/10.1177/0275074020939263

American Review of Public Administration

2021, Vol. 51(1) 57 –71

© The Author(s) 2020

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DOI: 10.1177/0275074020939263

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Article

Introduction

Innovation is a dynamic process through which problems are

defined, creative ideas are developed, and new solutions are

finally selected and implemented (Sørensen & Torfing,

2012). Innovation is acknowledged as a critical factor for

sustainable competitive advantage in the private sector

(Verona & Ravasi, 2003) as well as for handling those

“wicked problems” (Roberts, 2000) that in various ways

affect public sector organizations (De Lancer Julnes &

Gibson, 2016). Its manifestations are influenced by both

enabling and hindering factors: among them, for instance,

are organizational-level factors such as the resources that can

be dedicated to support innovative activities, as well as the

role of leadership (De Vries et al., 2016; Vigoda-Gadot et al.,

2008). These aspects may be fruitfully linked to the dynamic

capabilities approach, which has become a prevalent theo-

retical framework for analyzing how firms change and inno-

vate (Teece, 2007; Teece et al., 1997). Organizations are not

naturally endowed with dynamic capabilities: they invest in

their development when they consider this to be more

rewarding than ad hoc problem solving (Winter, 2003).

Dynamic capabilities therefore result from managerial deci-

sions, but may also be influenced by organizational condi-

tions, such as organizational culture and structure (see, e.g.,

Kim & Lee, 2006). They play a critical role in the redesign

and rearrangement of skills, resources, and competences to

address the needs of a continuously changing environment

(Teece et al., 1997), thereby supporting organizations’ capac-

ity to innovate. This perspective is especially suited to our

analysis because public sector organizations also face sig-

nificant environmental challenges, so that these capabilities

have been proved to be critical for their success (Pablo et al.,

2007; Salge & Vera, 2011), and for their ability to implement

939263ARPXXX10.1177/0275074020939263The American Review of Public AdministrationTrivellato et al.

research-article2020

1University of Milano–Bicocca, Italy

Corresponding Author:

Benedetta Trivellato, Department of Sociology and Social Research,

University of Milano–Bicocca, via Bicocca degli Arcimboldi 8, 20126

Milano, Italy.

Email: benedetta.trivellato@unimib.it

How Do Organizational Capabilities

Sustain Continuous Innovation in a

Public Setting?

Benedetta Trivellato1, Mattia Martini1, and Dario Cavenago1

Abstract

Just as private organizations rely on dynamic capabilities to sustain their innovative capacity and competitive advantage, the

public sector may resort to them to improve its ability to address citizens’ needs. But how do innovation and organizational

capabilities interact in a public setting? This analysis of the Congestion Charge Zone implemented by the Municipality of Milan

in Italy explores this issue, and highlights the role played by interorganizational and cross-sector collaborative innovation.

Results show that multi-actor engagement within a multilevel collaborative environment enhances the system’s ability to

understand the problems to be addressed, to create and implement appropriate solutions, and to foster ownership of the

innovation. They confirm that sharing knowledge and engaging in interorganizational learning are central to the development

of innovation; however, they also highlight that these dynamics strengthen collective capabilities at the organizational and

system’s level, thereby producing a reinforcing effect on innovative capacities at both levels. Based on these findings, a

framework for continuous public innovation through collaboration is proposed which, first, provides a tool for mapping

the factors and dynamics that shape collaborative innovation in a public setting and, second, explains how the process

of collaborative innovation fosters organizational dynamic capabilities that, in turn, sustain the organizations’ capacity to

innovate in the longer run.

Keywords

collaborative innovation, dynamic capabilities, stakeholder engagement, participation