Organizations face challenges of resource constraints that affect their ability to innovate (Keupp & Gassmann, 2013; Demircioglu & Audretsch, 2017). To address these constraints, it has been argued that organizations operate based on their dependence on different resources (Pfeffer & Salancik, 1978). Thus, organizations confront their environment to reduce dependence and maintain interdependence, either by collaborating with partners or by integrating new resources and capabilities through capability building (Wang & Zajac, 2007; Dai, 2010).
In the public sector, fostering innovation is often achieved through the establishment of local innovation labs (LILs) (Kviselius & Andersson, 2009; Leminen et al., 2012), where their success hinges on their ability to navigate and leverage their external environment effectively (Lupp et al., 2020; Pohl, 2005). However, previous research has focused in the most part on the private sector, lacking adequate exploration of dependence in public sector innovation ecosystems (Gandia & Gardet, 2017; Roundy & Bayer, 2019; Costa & Matias, 2020). Traditional approaches, such as the diffusion of innovation (Rogers, 1962) and public choice theory (Zafirovski, 2001), examines how and at what rate new ideas and technologies spreads within and across organizations. Nevertheless, there are few studies develop and test theories about antecedents of innovation outcome, especially, how resource dependence affects it. This gap may be due to data and measurement shortages (Arundel & Huber, 2013; Demircioglu & Audretsch, 2020) and a paucity of theories in public administration (Moyson et al., 2015).
This study seeks to enhance the understanding of public sector innovation by examining the impact of resource dependence on innovation outcomes within public sector organizations (PSOs). Through an explorative analysis of how resource constraints and dependencies shape the innovative capabilities of PSOs, this study aims to fill the existing gaps in literature and provide a comprehensive framework for fostering innovation in the public sector. To accomplish this, this study proposes the following research question: how does the use of resource independence strategies affect the innovation outcome in LIL?
By addressing this research question, the paper adds to existing academic discourse in several ways. First, it provides a deeper understanding of antecedents of innovation within PSOs, as has been called for in the literature (de Vries et al., 2015, Demircioglu & Audretsch, 2017). Second, it extends the classical theorizing of innovation outcome through the resource dependency lens. In doing so, the paper considers that PSOs are embedded in unique settings and innovation outcomes depends on strategic decision-making based on resource scarcity and not soley on institutional pressure (Powell & Rey, 2015, Malatesta & Smith, 2014) and communication processes (Rogers, 1962). Thus, the paper contributes to more general theorizing of innovation outcome, providing further insight on these mechanisms. Third, the paper explores the empirical manifestations of dependency in strategic choices to innovate through a qualitative methodology, which allows for the capture of contextual perspectives from key actors. Finally, it provides insights for policymakers and public sector managers on optimizing resource allocation to enhance innovation outcomes (Borins, 2001; Hartley et al., 2013; Bekkers & Tummers, 2018).
Therefore, the paper is structured as follows: The first part covers the literature concerning innovation outcome, focusing on the interplay between resources and contextual factors, as well as various strategies for managing resource for fostering innovation. This is followed by presenting the theoretical perspective of resource dependence theory (Pfeffer & Salancik, 1978. The methodology section follows illustrating the multiple case study design (Hunziker & Blankenagel, 2021), data gathering and analyzing techniques. The findings section shows bundle of central resources involved in the innovation process. The paper ends with conclusion and recommendations for further research.
Concerning preliminary findings and challenges, this study conceptualizes the independent variables as two types of resource independence strategies (Sherer et al., 2019; Hillman et al., 2019): minimizing (inter-)dependence through cooperation and maximizing power through integration, each having distinct impacts on innovation outcomes. When it comes to the dependent variable, the study uses two categorizing factors: degree of novelty and scope of change (Mention, 2011; Amara et al., 2008).
By analyzing data, which is gather through semi-structured interviews (Kallio et al., 2016) and document analysis from various LILs, the paper highlights how these strategies influence the LILs' ability to develop innovative solutions. The findings are expected to reveal that LILs that effectively leverage their unique resources and manage dependencies through integration are more likely to achieve sustainable innovation outcomes than through cooperation. Further, it is anticipated that LILs with greater resource independence will demonstrate higher efficiency and effectiveness in their innovation outcomes. These LILs are expected to be more adaptable and responsive to local needs. Furthermore, the study expects to find that certain types of resource independence strategies, particularly those involving integration strategies such as resource diversification and internal capacity building, are more affecting the innovation outcome than others.
The primary challenges anticipated in this research include the variability in defining and measuring "innovation outcomes" and the potential for subjective biases in qualitative assessments. Moreover, the differences in strategic choices based on economic environments and the heterogeneity of the LIL themselves may pose challenges in drawing generalized conclusions.
The findings could potentially influence policy-making and strategic planning, enhancing the capacity of German LIL to drive sustainable innovation aligned with regional and national goals.
