How to Augment Public Sector Innovation
“Public sector innovation” is not a phrase you hear too often; Perhaps this is because innovation is traditionally not part of the public sector’s role, but rather a derivative from the talented individuals working as public servants. That is not to say the public sector is not capable of generating innovative solutions. However, due to resource limitations, restrictive local and federal regulations, and just like the DMV — things move slowly in the public sector.
Nevertheless, this is for a reason; the public sector must uphold a high level of aptitude when implementing any solution that will affect hundreds if not thousands of people living in a community. The public workforce must prioritize listening to communities to understand issues from all perspectives — this takes time and patience. When executed correctly, the process generates fulfilling solutions for communities’ most wicked problems.
Local communities fund public projects and must agree and compromise when spending public money. This structure does not leave much room for trial and error, a foundational building block of innovation. There is no incentive for a public worker to create innovations unless policies protect important components like intellectual property, patent rights, profits, and funding for further research. Without protective policies that promote research and development, an individual could feel that it is not worth the effort.
How to Incentivize
Sandia National Laboratory is a United States Federal Laboratory located in Albuquerque, New Mexico. Sandia has a program named the Entrepreneurial Separation to Transfer Technology (ESTT). The program encourages researchers to take technology out of the Labs and into the private sector. The program guarantees Sandia employees reinstatement if they decide to return within two years.
The ESTT began in 1994, and in 2016 the program enabled 153 researchers to leave the Labs. Sixty-eight individuals left to start a business, and eighty-five expanded an existing one. A survey sent out to researchers who participated in the program said that it brought expertise into the private sector, created jobs, and contributed economic development to communities. A significant component of the National Laboratory is to make its talent available to support the community and local economy.
The program helps the Laboratory deploy technology into communities by giving opportunities to its employees. ESTT generates an incentive for innovation by providing a pathway for entrepreneurship and training to start a small business. This program has even helped Sandia recruit talent from all across the world, looking for the opportunity to receive training, leadership, and guidance towards their goals.
Let us break down three pieces of the ESTT model. First, the philosophy of employee self-exploration. Many organizations and companies know how valuable talented employees are and typically do not create pathways for them to leave — let alone guarantee a job if they want to come back. This encourages an employee to evaluate their career path and pursue lifelong dreams without jeopardizing their financial livelihood.
Second, the program promotes cross-pollination in technology, developed with federal funds, and introduces new ideas in the communities. In an age where an employee signs a W2 and strict non-disclosure agreement ( NDA ), the ESTT program promotes the employee to take the IP developed inside the Labs and apply it elsewhere. How many public or private sector companies have this kind of policy?
Third, the value created by training and support for employees once they leave Sandia. Any entrepreneur will tell you that starting a business is not easy, from managing payroll, navigating local and state regulations to knowing where to go for help. There is a whole labyrinth for a new business to traverse, and Sandia offers assistance, training, and support for the program participants.
These three pieces, philosophy of employee self-improvement, intellectual property licenses, and support, foster creativity and innovation. Some employees who leave on such a program may never return, but some do and bring new experiences and expertise back into the organization. Not every public sector organization needs to adopt this type of program; however, the core concepts can support an employee bringing solutions from the public sector into commercialization — for others to use, benefit from, and further innovations.
Sandia Labs. (2015, October 29). Out the door: DOE aims to expand lab ties to private sector. Retrieved from https://www.sandia.gov/news/publications/labnews/articles/2015/30-10/transfer.html
Sandia Labs. (2016, October 27). Calling all entrepreneurs. Retrieved from https://www.sandia.gov/news/publications/labnews/articles/2016/28-10/entrepreneuers.html
Westmore, B. (2014). Policy incentives for private innovation and maximizing the returns. OECD Journal: Economic Studies, 2013(1), 121–163. doi:10.1787/eco_studies-2013–5k3trmjlhxzq