The Challenges of Public Innovation: Insights From Risk Governance in Batang Regency

Interest in public sector innovations has been growing among policy makers, practitioners, and scholars. Despite the complexity of modernisation and resource constraints, public leaders must create innovative policies to deliver better services and overcome societal challenges. This research is on public innovation which examined opportunities and challenges facing public innovation. The study was triggered by the mixed outcomes of the decentralisation policy in Indonesia. While some local governments have engaged in service, process and governance innovations, many continue to face difficulties in adopting and sustaining innovative programs. Through case studies of two governance innovations in Batang Regency (2012-2017), this research appraised the dilemma of risk governance in securing the credibility and sustainability of two innovative ideas, namely UPKP2 local ombudsman and Budget Festival. Results of the study highlighted evidence that considering the highly dynamic socio-political environment that heads of local governments face, managing risk governance is important in implementing public innovation in a meaningful and sustainable way.


INTRODUCTION
Following the success achieved in the private sector, innovation has become a "buzzword" favoured by policymakers and practitioners since 1980s (Borins, 2001). The complexity of modernisation and resource constraints require innovative policies that provide better services and overcome societal challenges. While public sector innovation is non-linear and occurs in dynamic circumstances, there is not much previous research challenges and unintended results that ensue (Brown & Louis, 2013;Meijer & Thaens, 2020).
The concept of innovation in the public sector emphasises the implementation of new ideas which generate meaningful change and positive impact. Moore et al. (1997, p.276) proposed a practical definition of innovation as "a new change that is large enough, general enough and durable enough to appreciably affect the operations or character of the organisation". Osborne (1998) distinguished this discontinuous change into three types of innovation: 1) Expansionary innovation (new needs are being addressed through existing organisational skills or capacity); 2) Evolutionary innovation (existing needs are being addressed through new or improved organisational skills or capacity); and 3) Total innovation (both new and existing needs are being addressed through creating new organisational skills or capacity. Findings in previous research on public innovation have mostly focused on service, internal process, and technology dimensions, but have overlooked the governance dimension, which has the ability to transform a new social production system beyond the organisational boundary (Hartley, 2005). In contrast to other types of innovation, governance innovation is more ambiguous since it is usually not a physical product. Moore and Hartley (2008) identified five unique ways which differentiate governance innovation from other types of innovation, as follows: 1)Bursting the boundary of organisation and creating network-based production.
2)Tapping new pools of financing, material resources and human energy.
3)Exploiting the public capacity to redefine private rights and responsibilities. 4)Redistributing the right to define and judge the public value. 5)Evaluating the innovations in terms of justice, fairness, and community-building.
Practically, governance innovations may take the form of certain service deliveries with a better governance style (for example participatory health program) or new intermediate programs that deliver better value for other service deliveries and governmental functions (for instance good governance program). This research focused on the latter form of governance innovation.
In Indonesia, demand for local innovation comes from a multiplicity of directions.
One of the main demands centres on the need to combat corruption, collusion, and nepotism (known as KKN), which has its origins in the new order government of President Soeharto (Setiyono & McLeod, 2002). The change in government in the aftermath of Suharto" regime in 1998, spawned reforms, including bureaucratic reforms and decentralisation. Although several anticorruption and good governance initiatives have been implemented, corruption is still persistent and has become rampant in local governments in the aftermath of the implementation of decentralisation policy (Patunru & Rahman, 2014).
Although some local governments still perform poorly on good governance, an increasing number of them have demonstrated progress in promoting innovative reforms in service delivery and governance (Leisher & Nachuk, 2006;Bunnel, Miller, Phelps & Taylor, 2013). Hanif and Pratikno (2012) found an increasing number of local innovations, which they classified into four groups of activities, that included, those that i) promoting good enabling economic environment that support economic development; ii) improving basic service delivery, including encouraging open and transparent governance; iii) initiating pro-poor local development and poverty alleviation; and iv) enhancing participatory planning and budgeting, social audit, and government accountability.
Local innovations are associated with high outcomes in terms of public value, in terms of new services, processes, and governance. For example, Jembrana (Bali Province) and Bantul (Yogyakarta Province) pioneered the provision of free public health and education services for low-income fami-lies (Rosser, Wilson & Sulistiyanto, 2011).
Meanwhile, Sragen (Central Java Province) established information technology based "One-stop services" for citizen records and business permits. These "e-government" initiatives have succeeded in achieving domestic and global recognition, which has led some local governments to replicate them with varying degrees of success. processing business support facilities such as unsecured loans, training, and marketing partnerships. The failure of the program is attributable to lack of technology, poor management and limited financial transparency (Hanintya & Manar, 2020).
There are concerns that some local government heads can abuse innovation projects by supporting and perpetuating initiatives that serve their vested interests (Kompas News, 7 April 2013). A case in point as elu-

Case Study
This research was based on a case study approach. The study conducted an in-depth description and analysis of a complex social phenomenon (Creswell, 2013 an attempt to introduce a system for investigating and addressing complaints of maladministration and shortage in the public service; and 2)The Budget Festival: an attempt to introduce more transparency into local budget management through three days exhibition.

Empirical findings on public innovations
Innovation has become essential for the public sector to deliver better services and governance amid fiscal austerity, societal challenges, legitimacy deficit and wicked problems (Sørensen & Torfing, 2016). Since public innovations development does not occur in a vacuum, there is no guarantee that any innovative idea can be transformed easily into specific actions plans, adoption and deployment arrangements. Hartley (2013) emphasizes the level of uncertainty associated with innovations with respect to process and outcome. This is because internal and external aspects affect the adoption and de- ployment of innovations by public organisations, including multiple veto points, inherent risks that influence power and politics of decision making relating to access and use of resources and innovation processes (Tsebelis, 1995;Stoker, 2010).
In an assessment of innovation landscape in public service in Australia, the Australian Among the few is Meijer and Thaens (2020), that identified ten potential negative conse- public innovations. While process or input legitimacy relies on a system of public control, output legitimacy depends on the creation of public value (Scharpf, 1999 Within this complicated context in the public sector, one challenge that has received less attention is the risk management of innovation (Brown & Osborne, 2013).
Although most public policy and services carried out public organisations are beneficial and successful, not a few fail to achieve their expected outcomes. This leads to "playing safe" behaviour (risk aversion) and "incremental pluralistic policy formation" that generates only a marginal improvement (Bhatta, 2003). Brown and Osborne (2013) classifies the risk of the new applications in the public sector into consequential risk (direct risk to the individual, such as the service users), organisational risk (the risk to professional or organisational reputation), and behavioural risk (the risk to the stakeholders surrounding a service or wider community). Each of the risk loci require different responses or instruments within different policy and service environment.
Risk management theory in the public sector can be traced to two sources. First, the actuarial literature, which is concerned with minimizing the presence of risk for an organisation and its consequent cost (risk minimisation approach (Stulz, 1996)). This approach assumes that risk is detrimental to an organisation and can be managed through an internal process (closed system). Secondly, literature on public health and safety acknowledges the inevitability of risk but seeks to limit and manage its consequences for the organisation (risk analysis approach (Rasmussen, 1997)). The approach acknowledges the interrelationship between the organisation and its environment (natural system) as a process that can be managed in a linear and unidirectional manner. While these two approaches can provide the theoretical foundation for innovation in the public sector, they are insufficient to negotiate the potential risks of innovation against potential benefits among key stakeholders. Subsequently, Renn (2008) adopts an unequivocally "open system" approach, which focuses on governance in pluralist environments rather than its management within an individual organisation. This approach assumes that risk is socially constructed by its participants who have the potential for trade off between risk and benefit, with some of the benefits contested and conflicting between one and other. In that regard, Renn cited in Brown and Osborne (2013, p.197-198), proposes three approaches, including : 1)Technocratic risk management that relies on expert-decision making to minimise the risk of any action (similar to the risk minimisation approach); 2)Decisionist risk management ,which combines scientific input with political decisionmaking, thereby opening up the process to a potential negotiation of the benefits and consequences of identified risks (equivalent to the risk analysis approach). However, according to Renn (2008) Table 2.
Technocratic risk management provides a framework for evolutionary innovation, while decisionistic risk management can accommodate evolutionary and expansionary innovations (Brown & Osborne, 2013). On the other hand, transparent risk governance provides the most comprehensive framework of all innovation risk management approaches, including the essential framework for total innovation (Flemig, Osborne & Kinder, 2016 tor and enable their contested means, benefits, and risks to be negotiated across multiple stakeholders.
Thus, risk governance is a crucial strategy for public innovators in adopting and diffusing local innovations in dynamic sociopolitical environments, including decentralized local governments in Indonesia.
Regent Yoyok was aware that the budget process and associated corruption was largely responsible for poor public service delivery. To overcome the problem, the regent devised ways that were aimed at enhancing transparency of the budgeting process and encourage public participation by increasing their awareness of public issues and programs (Arif & Indriastuti, 2017). First, the regent disseminated a summary of the local budget, followed by discussions of its contents, targets and goals in meetings that were held in subdistrict offices. However, the re-  (Hartley, 2016).
Nonetheless, the adoption of public innovations is a complicated process given the fact that it requires various resources that are dispersed among many actors with varying vested interests. To that end, public innovations face many obstacles and detractors that undermine the process because of unwillingness to change habits and practices, and fear of powerful groups to lose benefits enjoyed (Sørensen & Torfing, 2016).