Innovation and digital transformation in government

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here. 

Dates of the project: 2017

The Challenge 

Governments are under pressure to modernise through digital innovation, but these efforts often lack clarity, inclusivity, and impact. Too often, innovation is reduced to efficiency gains, overlooking deeper issues such as legitimacy, trust, and public value. 

Reforms inspired by New Public Management weakened public institutions by outsourcing expertise and prioritising market-style efficiency. Later attempts to replace these frameworks have not fully addressed how governments can develop the internal capacities needed for lasting digital transformation. 

Public sector innovation continues to be framed as a lesser version of business innovation, narrowly focused on efficiency. This perspective misses its political roots and neglects key questions about power, legitimacy, and public value—leaving governments poorly equipped to respond to challenges such as digital sovereignty, platform economies, and the future of public services. 

Our Approach 

At IIPP, we are exploring how governments can build the dynamic capabilities required for meaningful digital transformation. Led by Rainer Kattel and funded by the Estonian Academy of Sciences, our research combines theoretical and empirical work on: 

• Innovation labs
• Digital services
• ICT platforms
• Agile practices 

We treat public sector innovation as a distinct field—not a copy of private-sector models. By analysing both successes and shortcomings in government reforms, we aim to provide policymakers with tools to rethink capacity-building and move beyond outdated frameworks. 

Why This Matters 

Digital transformation should not be limited to streamlining processes. Done well, it can empower governments to deliver services that are fairer, more transparent, and more inclusive. 

By reframing public sector innovation as a driver of legitimacy and public value—not just efficiency—this project helps policymakers and institutions strengthen their capacity to respond to societal challenges. It also contributes to debates on how governments can retain sovereignty and build trusted, future-ready systems in an increasingly digital world. 

Resources 

Video: Beyond the Chainsaw Rethinking Efficiency in Government
Speakers: Mariana Mazzucato, Yamini Aiyar, Rohit Chopra, Elizabeth Linos, Damon Silvers and Josh Entsminger.
Description: This panel explores new frameworks for rethinking efficiency in public service amid AI and automation, challenging austerity-driven narratives and highlighting alternatives that align with public value.

Video: Digital Sovereignty for people and the planet: how to get there?
Description: A debate on the realism and priorities of digital sovereignty agendas, exploring how governments can reclaim control over technology amid Big Tech dominance and geopolitical tensions.

Video: Digital state capacity and grand challenges
Description: This session explores mission-oriented policies in Europe as a framework for public sector reform, highlighting new opportunities to build state capacity in the digital era.

Funder

This project is funded by Estonian Academy of Sciences. 

This research project is led by the UCL Institute for Innovation and Public Purpose (UCL IIPP).
Explore all IIPP research projects here.