Beyond profit

Innovation is traditionally steered by commercial logic: new ideas are justified by the promise of market success and increased turnover. As societal challenges intensify, from climate risk to ageing populations, that lens is narrowing. The demand for innovation that serves broader audiences is growing faster than most commercial frameworks can accommodate.

Public Value Innovation (PVI) is an emerging stream of research in innovation management concerned with products or services developed primarily to create value that benefits everyone. Unlike CSR or responsible innovation, PVI is not a corporate add-on or ethical afterthought. It represents a fundamental shift: innovation whose primary objective is to generate value for society as a whole, not just for shareholders or consumers. It is collectively created by public, private, and civil society actors working toward societal goals at local, national, or global levels.

PVI does not reject financial logic. It reframes it. Competitive advantage is still relevant, but now it is tied to solving complex public problems. PVI ecosystems are mission-oriented, often contextualised around specific goals like decarbonisation or public health. And because no single actor can own the solution, value is co-created across diverse and sometimes unconventional partnerships. The process is messier. Slower. But the outcomes carry more weight.

Co-creation across sectors

Innovation ecosystems with public value goals emerge as possible solutions to changing societal challenges. Universities have an opportunity within this framing to act as orchestrators and knowledge brokers. Cardiff University and the Interdisciplinary Centre for Security, Reliability and Trust at the University of Luxembourg are examples of institutions already moving into this role.

The partnership model matters. Traditional bilateral contracts between a firm and a university lab are too narrow for problems that span regulatory, technical, and social dimensions. PVI demands networks where participants contribute fluidly rather than in fixed roles, and where the coordination challenge is part of the innovation problem itself.

Outcomes beyond return on investment

In PVI, success is not measured solely by ROI. Societal resilience, environmental sustainability, and social equity are first-order outcomes that must be tracked through both financial and non-financial metrics. Longitudinal data is often necessary to assess how outcomes evolve, because the impact of public value innovation tends to compound over time rather than arriving in a single quarter.

Traditional business models focused on capturing value may not suffice. PVI often demands redesigning how value is created and shared across an ecosystem. Firms should consider hybrid or challenge-led models that reflect joint public-private missions, where the value proposition is collective rather than proprietary.

Links: Liquid innovation, Public sector efficiency is a productivity multiplier, E-government infrastructure amplifies economic productivity