Keywords:Public-private innovation, health and social care, transaction costs, Norway
In response to the continual pressure on health and social services worldwide, there has been a demand for innovation in this sector. One area of interest has been collaboration between public and private actors in developing new solutions for service delivery. So far, knowledge of how such private-public innovation (PPI) processes emerge has been limited. We studied barriers to PPI, focusing on how transaction costs influence the innovation process.
We conducted a single case study, following the collaborative efforts of a Norwegian municipality and a local fire and rescue company searching for new care service delivery models. The data consist of interviews with central stakeholders and documents from the PPI process. The findings add to the knowledge on barriers in public-private innovation by highlighting transaction costs as a factor influencing the PPI process. An increased awareness of transaction costs throughout the innovation process may be important in planning and resource allocation. Findings from this case study may be useful in the development and implementation of innovative ideas. Our case illustrates the need for organisational change in service innovation. A focus on transaction costs can provide a useful tool for analysing necessary structures and their consequences when beginning PPI initiatives.
Allen, P., Croxson, B., Roberts, J. A., Archibald, K., Crawshaw, S., & Taylor, L. (2002). The use of contracts in the management of infectious disease related risk in the NHS internal market. Health Policy, 59(3), 257–281. https://doi.org/10.1016/S0168-8510(01)00183-X
Andreassen, H. K., Kjekshus, L. E., & Tjora, A. (2015). Survival of the project: A case study of ICT innovation in health care. Social Science & Medicine, 132, 62–69. https://doi.org/10.1016/j.socscimed.2015.03.016
Ashton, T. (1998). Contracting for health services in New Zealand: A transaction cost analysis. Social Science & Medicine, 46(3), 357–367. https://doi.org/10.1016/S0277-9536(97)00164-0
Bell, C.R. (2010). Transaction cost economics in 21st Centrury Economics: A referance handbook. Sage. http://dx.doi.org/10.4135/9781412979290.n19
Benington, J., & Moore, M. H. (2011). Public value in complex and changing times. In J. Benington & M. H. Moore (Eds.), Public value: Theory and Practice (pp. 1–30). Macmillian International Higher Education. https://doi.org/10.1007/978-0-230-36431-8_1
Blåka, S., Tjerbo, T., & Zeiner, H. H. (2012). Kommunal organisering 2012. Redegjørelse for Kommunal-og regionaldepartementets organisasjonsdatabase. [Municipal organisation 2012. Account of the Ministry of Local governments database] Norwegian Institute for Urban and Regional Research. https://doi.org/10.7577/nibr/rapport/2012/21
Bommert, B. (2010). Collaborative innovation in the public sector. International Public Management Review, 11(1), 15–33.
Boschma, R. (2005). Proximity and innovation: A critical assessment. Regional Studies, 39(1), 61–74. https://doi.org/10.1080/0034340052000320887
Carr, J. B., LeRoux, K., & Shrestha, M. (2009). Institutional ties, transaction costs, and external service production. Urban Affairs Review, 44(3), 403–427. https://doi.org/10.1177/1078087408323939
Crosby, B. C., & Bryson, J. M. (2010). Integrative leadership and the creation and maintenance of cross-sector collaborations. The Leadership Quarterly, 21(2), 211–230. https://doi.org/10.1016/j.leaqua.2010.01.003
Dittmer, P., Christiansen, C., & Kierkegaard, G. F. (2008). Public private partnership for innovation (PPPI) in Denmark. European Public Private Partnership Law Review, 4(4), 240–242.
Donato, R. (2010). Extending transaction cost economics: Towards a synthesised approach for analysing contracting in health care markets with experience from the Australian private sector. Social Science & Medicine, 71(11), 1989–1996. https://doi.org/10.1016/j.socscimed.2010.09.016
Eberstadt, N., & Groth, H. (2007). Europe's coming demographic challenge: Unlocking the value of health: AEI Press.
Evald, R. M., Nissen, A. H., Clarke, H. A., & Munksgaard, B. K. (2014). Reviewing: Cross-field public private innovation. Literature: Current research themes and future research themes yet to be explored. International Public Management Review, 15(2), 32–57.
Feiock, R. C. (2007). Rational choice and regional governance. Journal of Urban Affairs, 29(1), 47–63. https://doi.org/10.1111/j.1467-9906.2007.00322.x
Flyvbjerg, B. (2006). Five misunderstandings about case-study research. Qualitative Inquiry, 12(2), 219–245. https://doi.org/10.1177/1077800405284363
Fuglsang, L., Hulgård, L., & Langergaard, L. L. (2015). An updated list of municipal public-private innovation studies in Europe, especially Nordic studies. Roskilde University.
Gray, B. (1989). Collaborating: Finding common ground for multiparty problems. Jossey-Bass.
Greenhalgh, T., Robert, G., Macfarlane, F., Bate, P., & Kyriakidou, O. (2004). Diffusion of innovations in service organizations: Systematic review and recommendations. Milbank Quarterly, 82(4), 581–629. https://doi.org/10.1111/j.0887-378X.2004.00325.x
Hartley, J., Sørensen, E., & Torfing, J. (2013). Collaborative innovation: A viable alternative to market competition and organizational entrepreneurship. Public Administration Review, 73(6), 821–830. https://doi.org/10.1111/puar.12136
Hjalmarsson, A., Johannesson, P., Jüll-Skielse, G., & Rudmark, D. (2014). Beyond innovation contests: A framework of barriers to open innovation of digital services. Paper presented at the Proceedings of the European Conference on Information Systems (ECIS) 2014 Tel Aviv.
Klein, P.G. (2005) The make-or-bye decision: Lessons from empirical studies. In C. Ménard & M. M. Shirley (Eds.), Handbook of new institutional economics (pp. 435–464). Springer. https://doi.org/10.1007/0-387-25092-1_18
Magnussen, S. (2016). The power of enthusiasm in collaborative innovation: a case study of the power of individual action in the establishment of a local medical centre in Norway. Nordic Journal of Social Research, 7, 31–45. https://doi.org/10.7577/njsr.2100
Mick, S. F and Shay, P.D. (2016) Accontable care organizations and transaction cost economics. Medical Care Research and Review, 73(6), 649–659. https://doi.org/10.1177/1077558716640411
Nissen, A. H., Evald, R. M., & Clarke, A. H. (2014). Knowledge sharing in heterogeneous teams through collaboration and cooperation: Exemplified through public-private-innovationpartnerships. Industrial Marketing Management, 43(3). https://doi.org/10.1016/j.indmarman.2013.12.015
North, D. C. (1995). The new institutional economics and third world development. In J. Harriss, C. Lewis, & J. Hunter (Eds.), The new institutional economics and third world development (pp. 17–26). Routledge. https://doi.org/10.4324/9780203444290.pt1
Palmer, N., & Mills, A. (2003). Classical versus relational approaches to understanding controls on a contract with independent GPs in South Africa. Health Economics, 12(12), 1005–1020. https://doi.org/10.1002/hec.792
Roberts, P., & Greenwood, R. (1997). Integrating transaction cost and institutional theories: Toward a constrained-efficiency framework for understanding organizational design adoption. The Academy of Management Review, 22(2), 346–373. https://doi.org/10.5465/amr.1997.9707154062
Rubalcaba, L., Windrum, P., Gallouj, F., Di, M., Pyka, A., Sundbo, J., & Weber, M. (2011). ServPPIN. The contribution of public and private services to European growth and welfare, and the role of public-private innovation networks. Servppin final publishable summary report. European Commission.
Rønning, R. (2015). Innovations in social welfare and human services - the nobel art of tringulation. Paper presented at the Social Innovation Research Conference (SIRC), Shanghai. https://doi.org/10.4324/9781315849812
Rønning, R., & Knutagård, M. (2015). Public innovation. A question of power? In R. Rønning & M. Knutagård (Eds.), Innovation in social welfare and human services (pp. 47–57). Routledge. https://doi.org/10.4324/9781315849812
Schreier, M. (2012). Qualitative content analysis in practice: Margrit Schreier. SAGE.
Schroll, A., & Mild, A. (2012). A critical review of empirical research on open innovation adoption. Journal für Betriebswirtschaft, 62(2), 85–118. https://doi.org/10.1007/s11301-012-0084-7
Stiles, R. A., Mick, S. S., & Wise, C. G. (2001). The logic of transaction cost economics in health care organization theory. Health Care Management Review, 26(2), 85–92. https://doi.org/10.1097/00004010-200104000-00010
Sørensen, E., & Torfing, J. (2011). Enhancing collaborative innovation in the public sector. Administration & Society, 43(8), 842-868. https://doi.org/10.1177/0095399711418768
Tavares, A. F., & Camöes, P. J. (2007). Local service delivery choices in Portugal: A political transaction costs framework. Local Government Studies, 33(4), 535–553. https://doi.org/10.1080/03003930701417544
Tavares, A. F., & Feiock, R. C. (2014). Intermunicipal cooperation and regional governance in Europe: an institutional collective action framework. Paper presented at the European Consortium for Political Research General Conference, Glasgow, Scotland.
Torfing, J., & Triantafillou, P. (2016). Enhancing public innovation by transforming public governance. Cambridge University Press. https://doi.org/10.1017/CBO9781316105337
Vabø, M., Christensen, K., Jacobsen, F. F., & Trætteberg, H. D. (2013). Marketisation in Norwegian eldercare: preconditions, trends and resistance. In G. Meagher & M. Szebehely (Eds.), Marketisation in Nordic eldercare: A research report Stockholm: Department of Social Work, Stockholm University.
Wang, Y. S., Wu, S. C., Lin, H. H., Wang, Y. M., & He, T. R. (2012). Determinants of user adoption of web "automatic teller machines": An integrated model of "transaction cost theory" and "innovation diffusion theory". The Service Industries Journal, 32(9), 1505–1525. https://doi.org/10.1080/02642069.2010.531271
Weihe, G., Højlund, S., Holljen, T. B. E., Petersen, H. O., Vrangbæk, K., & Ladenburg, J. (2011). Strategic use of public-private cooperation in the Nordic region. Nordic Concil of Ministers.
Williamson, O. E. (1975). Markets and hierarchies. Free Press.
Williamson, O.E. (1985). The economic institutions of capitalism. Free Press
Williamson, O. E., & Masten, S. E. (1995). Transaction cost economics: Vol. 1: Theory and concepts. Edward Elgar.
Yin, R. K. (2013). Case study research: Design and methods. Sage publications.
How to Cite
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).