Measuring Malaysian Public Sector Innovation Performance through Business Model Perspective
1Muhammad Yusuf Abdullah, 2Aini Suzana Ariffin PhD
1,2Perdana Center STI Policy, Razak Faculty of Technology and Informatics, Universiti Teknologi Malaysia (UTM)

Google Scholar Download Pdf

Public Sectors around the world face constant demand in increasing efficiency and productivity. The pressure to improve service delivery particularly during this pandemic demands the public sector to provide more with less. Being subjected to mandates from the government, public scrutiny and compliance to legal system, public sector organisations are in constant pressure to perform above average, reform outdated process and deliver the best results with fewer resources. Adding to this, increasing demand has become the general expectation where the needs for customisable services based on the current lifestyle of the civil society or described as the “24/7 society” requires services to be available and accessible at all times. Therefore, public sector innovation agenda often focused in national level policy and initiatives. However, the innovation landscape remains an understudied terrain especially in Malaysian Public Sector. Capitalising on little existing insights, this study further expands the knowledge base by analysing underlying driving factors in innovation performance measurement from a Business Model Perspective for a more contemporary model discovery. Utilising Structural Equation Modelling technique, this study analysed responds from 328 middle managers within government agencies and organisation and revealed that the Malaysian Public Sector innovation management still depends on innovation capabilities both as a factor and mediator in influencing innovation performance greater than innovation management which has been the focus. The study found that there is a dire need for an organisation level model to improve the innovation performance in public sector agencies by focusing on both innovation capabilities and innovation management to ensure an excellent governance and delivery system being implemented effectively.


Innovation Business Model, Malaysian Public sector innovation, Innovation Performance Measurement, Innovation Capabilities, Innovation Performance, Innovation Management.


1) Albury, David. (2005). Fostering Innovation in Public Services. Public Money & Management. 25. 51-56. 10.1111/j.1467-9302.2005.00450.x.

2) ANAO. (2009). Public Sector Innovation; Detailed Case Study Material, Australia Government.

3) Arundel, A., Bloch, C., & Ferguson, B. (2019). Advancing innovation in the public sector: Aligning innovation measurement with policy goals. Research Policy, 48(3), 789–798.

4) Arundel, A & Hollanders, Hugo. (2011). A taxonomy of innovation: How do public sector agencies innovate? Results of the 2010 European Innobarometer survey of public agencies.

5) Arundel, A., & Huber, D. (2013). From too little to too much innovation? Issues in measuring innovation in the public sector. Structural Change and Economic Dynamics

6) Bloch, C., Jørgensen, L.L., Norn, M.T., & Vad, T.B. (2009). Public Sector Innovation Index –A Diagnostic Tool for Measuring Innovative Performance and Capability in Public Sector Organisations. Unpublished Report, National Endowment for Science, Technology and the Arts

7) Bloch, C., & Bugge, M. M. (2013). Public sector innovation: From theory to measurement. Elsevier, 27, 133–145.

8) Borins, S. (2001). Encouraging innovation in the public sector. Journal of Intellectual Capital.

9) Ciliberti, Stefano & Carraresi, Laura & Bröring, Stefanie. (2016). External Knowledge Sources as Drivers for Cross-Industry Innovation in the Italian Food Sector: Does Company Size Matter?. The International Food and Agribusiness Management Review. 19. 77-98.

10) Clausen, T. H., Demircioglu, M. A., & Alsos, G. A. (2020). Intensity of innovation in public sector organizations: The role of push and pull factors. Public Administration, 98(1), 159–176.

11) Colville, I., & Carter, M. (2013). Innovation as the practice of change in the public sector. In S. P. Osborne, & L. Brown (Eds.), Handbook of Innovation in Public Services (pp. 91-106). Edward Elgar Publishing Ltd.

12) Darroch, Jenny. (2005). Knowledge management, innovation and firm performance. J. Knowledge Management. 9. 101-115. 10.1108/13673270510602809.

13) De Vries, H., Bekkers, V., & Tummers, L. (2016). Innovation in the public sector: A systematic review and future research agenda.Public Administration, 94(1), 146–166.

14) Foss, Nicolai & Saebi, Tina. (2017). Business models and business model innovation: Between wicked and paradigmatic problems. Long Range Planning. 51. 10.1016/j.lrp.2017.07.006.

15) Goldfinch, Shaun & Wallis, Joseph. (2010). Two Myths Of Convergence In Public Management Reform. Public Administration. 88. 1099 - 1115. 10.1111/j.14679299.2010.01848.x.

16) Helfat, C. E., & Winter, S. G. (2011). Untangling dynamic and operational capabilities: Strategy for the (N) ever-changing world. Strategic Management Journal, 32(11), 1243–1250.

17) Hughes, A., Moore, K., & Kataria, N. (2011). Innovation in Public Sector Organisations A pilot survey for measuring innovation across the public sector.

18) Lekhi, Rohit. (2007). Public Service Innovation. A Research Report for the Work Foundation's Knowledge Economy Programme. Work Foundation.

19) Klimentova, S. (2014). Innovation in the public sector: Is it measurable? In Performance Measurement and management control: Behavioral implications and human actions.

20) Magretta, J. (2002). Why Business Models Matter. Havard Business Review Mention, Anne-Laure & Bontis, Nick. (2013). Intellectual capital and performance within the banking sector of Luxembourg and Belgium. Journal of Intellectual Capital. 14. 10.1108/14691931311323896.

21) Nelson, K. L., & Svara, J. H. (2012). Form of government still matters: Fostering innovation in US municipal governments. The American Review of Public Administration, 42(3), 257–281.

22) Osborne, S.P. & Brown, L.. (2013). Handbook of innovation in public services. 10.4337/9781849809757.

23) Pekkarinen, S., Hennala, L., Harmaakorpi, V., & Tura, T. (2011). Clashes as potential for innovation in public service sector reform. Implementation of policy initiatives to foster public sector innovation in Malaysia: the need for measurement

24) Ramli, RI, Abu-Hassan, Norihan, Arifin, Aini Suzana and Jasmi, Adibah Najihah (2018) Implementation of policy initiatives to foster public sector innovation in Malaysia: The need for measurement. Journal of Science, Technology and Innovation Policy, 3 (1).

25) Ramli, R.I., Abdullah, M.Y., Ariffin, A.S., & Hassan, N. (2016). The Myth of One Size Fits All in Understanding Public Sector Innovation. JoSTIP, 2(1), 31–38.

26) Ramli, R.I., Abdullah, M.Y., Ariffin, A.S., & Hassan, N. (2017). Factors Influencing Public Sector Innovation performance in Malaysia: Structural Equation Modelling Approach. International Journal of Academic Research and Business and Social Science. Vol 7.

27) Saebi, T., & Foss, N. J. (2015). Business models for open innovation: Matching heterogeneous open innovation strategies with business model dimensions. European Management Journal, 33(3), 201–213.

28) Santos, Jose & Spector, Bert & Van der Heyden, Ludo. (2009). Toward a Theory of Business Model Innovation within Incumbent Firms. SSRN Electronic Journal. 10.2139/ssrn.1362515.

29) Schilke, O., Hu, S., & Helfat, C. E. (2018). Quo vadis, dynamic capabilities? A content-analytic review of the current state of knowledge and recommendations for future research. Academy of Management Annals, 12(1), 390–439.

30) Siddiquee, Noore. (2019). Driving performance in the public sector: what can we learn from Malaysia’s service delivery reform?. International Journal of Productivity and Performance Management. ahead-of-print. 10.1108/IJPPM-06-2018-0232.

31) Sørensen, E., & Torfing, J. (2019). Designing institutional platforms and arenas for interactive political leadership. Public Management Review, 21(10), 1443–1463.

32) Subramanian, A., & Nilakanta, S. (1996). Organizational Innovativeness: Exploring the Relationship Between Organizational Determinants of Innovation, Types of Innovations, and Measures of Organizational Performance. Omega, 24(6), 631–647.

33) Teece, D. J. (2016). Dynamic capabilities and entrepreneurial management in large organizations: Toward a theory of the methodology. Organizational Research Methods, 16(1), 15–31.

34) Torfing, Jacob. (2018). Collaborative innovation in the public sector: the argument. Public Management Review. 21. 1-11. 10.1080/14719037.2018.1430248.

35) Torfing, J., Sørensen, E., & Røiseland, A. (2019). Transforming the public sector into an arena for co-creation: Barriers, drivers, benefits, and ways forward. Administration & Society, 51(5), 795–825.

36) Trivellato, B., Martini, M., & Cavenago, D. (2021). How do organizational capabilities sustain continuous innovation in a public setting? The American Review of Public Administration, 51, 57–71.

37) Weill, Peter & Vitale, Micahle. (2001). Place to Space: Migrating to eBusiness Models.

38) Wilden, R., Devinney, T. M., & Dowling, G. R. (2016). The architecture of dynamic capability research identifying the building blocks of a configurational approach. Academy of Management Annals, 10(1), 997–1076.

39) Zott C, Amit R. (2007). Business Model Design and Performance of Entrepreneurial Firms. Organisation Science.

40) Zott, C., & Amit, R. H. (2008). The Fit Between Product Market Strategy and Business Model: Implications for Firm Performance. Strategic Management Journal


Indexed In

Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar Avatar