Joining Forces for Public Value Creation? Exploring Collaborative Innovation in Smart City Initiatives

Abstract Creating public value is a key goal of public administrations, both in their daily business and in the growing field of smart government and smart cities, which focuses on IT-enabled innovations in the public sphere. However, many public administrations still struggle with such innovations due to complex technologies, high investments, and the numerous stakeholders involved. To address this issue, some local governments in continental Europe have turned to collaborative innovation approaches, partnering with (semi-)public utility companies in the hope that their additional innovation assets will boost innovativeness. Nevertheless, it remains unclear how exactly such collaborations should be governed to ensure that the focus remains on creating public value, as utility companies may have their own agendas. To explore this question, we conducted a comparative case study in the context of smart city initiatives with four cases in Swiss local governments. Drawing on agency and stewardship theory, we then propose a model of public-value-focused collaborative innovation, enabling us to explore various collaboration characteristics and their effects on public value creation. Our findings suggest that both agency- and stewardship-based collaborations increase innovativeness. However, while agency collaborations tend to produce smart city innovations that mainly serve the utility companies' business interests, stewardship relationships lead to innovations that are focused more on public value creation. As such, our study extends the literature on the effects of collaborative innovation on public value, and it provides practical recommendations on how such collaborative innovation should be designed.