A Framework for Enhancing Public Sector Innovation through Institutional Capacity Building

Thesis Abstract

The need for innovative approaches within the public sector has become critical to address the increasing complexity of societal challenges and the demand for improved service delivery. Despite the recognized importance of innovation for enhancing administrative efficiency and responsiveness, many public organizations face persistent institutional barriers that hinder innovative behavior and growth. This study aims to develop a comprehensive framework for enhancing public sector innovation through targeted institutional capacity building, with the specific objectives of identifying key institutional factors influencing innovation, evaluating the current capacity levels, and proposing a strategic model that integrates capacity development processes with innovative outcomes. Employing a mixed-methods research design, the study combines quantitative surveys and qualitative interviews to provide a nuanced understanding of the variables involved. The population comprises 45 local government departments in a metropolitan area, with a stratified random sample of 300 employees at various hierarchical levels selected to ensure diverse perspectives. Data collection instruments include a structured questionnaire measuring institutional capacity dimensions—such as leadership, organizational culture, resource availability, and knowledge management—as well as innovation indicators. Additionally, semi-structured interviews with 25 senior administrators are conducted to triangulate survey findings and gather expert insights. Quantitative data are analyzed using multiple regression analysis to identify significant predictors of innovation, while thematic analysis interprets qualitative responses to uncover underlying themes and contextual factors influencing capacity and innovation practices. The study draws theoretical grounding from the Institutional Theory, which emphasizes the role of formal rules, norms, and routines in shaping organizational behavior, and the Dynamic Capabilities Framework, which highlights the importance of organizational agility and resource deployment in innovating. These frameworks provide a basis for conceptualizing how capacity enhancement can serve as a catalyst for sustained innovation within public institutions. Expected findings anticipate identifying specific institutional factors—such as leadership commitment, a supportive organizational culture, and effective knowledge-sharing mechanisms—that significantly correlate with higher levels of innovation. Moreover, the study is expected to reveal capacity gaps and institutional inertia that impede innovation processes. The proposed framework systematically links capacity-building initiatives with innovation outcomes, illustrating pathways through which strategic interventions can foster an innovative public sector environment. This research contributes theoretical advancement by integrating institutional and dynamic capabilities perspectives into a unified model tailored for public administration contexts. It offers practical guidelines for policymakers and public administrators to design targeted capacity-building programs, emphasizing leadership development, cultural change, and resource optimization to stimulate innovation. The study also extends existing literature by providing empirical evidence from a developing country setting, addressing the underexplored context of local government in fostering innovation. The main conclusion underscores the critical importance of strategic institutional capacity building as a prerequisite for sustainable innovation in the public sector. Recommendations include adopting a holistic approach to capacity enhancement—focusing on leadership training, fostering an innovation-supportive organizational culture, and improving knowledge management systems. The study advocates for continuous capacity assessments and tailored interventions aligned with organizational strategic goals. Future research directions suggest longitudinal studies to evaluate the long-term impact of capacity-building initiatives on innovation performance, as well as comparative analyses across different governmental levels or jurisdictions. Overall, the findings aim to guide the development of resilient, adaptive, and innovative public institutions capable of effectively responding to contemporary societal demands.