Mid Sweden University

Extant research demonstrates that e-Government initiatives often fall short of achieving innovative forms of government and governance due to a techno-centric focus that limits such initiatives to minor improvements in service delivery. While it is evident that innovation is central to modernising and transforming governmental organisations, and that the co-creation of services by public authorities and community groups is an essential component of realising the benefits of investment in information and communication technology, there is little research focusing on the nature of innovation in transforming governmental organisations and services. Addressing this gap in the literature, this paper explores how open innovation strategies can transform public administration by examining how a network of municipalities in Sweden transforms value creation and service delivery by collaborating with each other and with external parties to accelerate the creation and exploitation of innovation. Using a case study with embedded units of analysis, four emerging typologies of governmental transformation based on open innovation are identified. The paper illustrates how these open innovation typologies (i) transform the organisation of the municipalities and (ii) help them deliver high quality co-created services to citizens. By examining the strategic and operational aspects that facilitate such activities, the analysis reveals the impact of open innovation on the business models of public authorities. The paper concludes that open innovation practices represent a more radical manifestation of transformational government than previously envisaged; signalling not only fundamental change in the nature of value creation and service delivery by public authorities, but potentially in the nature of their organisation. © 2011 Operational Research Society Ltd. All rights reserved.