PUBLIC MONEY & MANAGEMENT NOVEMBER 2012 425 © 2012 THE AUTHORS JOURNAL COMPILATION © 2012 CIPFA Pressure on public sector funding and an increasing demand for public services means that many governments are trying to deliver ‘more for less’ (Hawksworth and Jones, 2010). To do so, governments are considering new ways of delivering public services. Innovation in the public sector is manifested in new processes, new services and new governance and contractual models. A new form of innovation in the public sector is the commercialization partnership, which we define as a partnership with the private sector to generate economic value from a public sector asset. To better understand the prevalence of commercialization, a survey of UK civil servants’ views on commercialization and two case studies of successful commercialization partnerships were carried out. This article provides the background to commercialization, reports our key findings and looks at the implications for managers in the public sector. Types of innovation New public services, revised business processes and new contractual models are the principal dimensions of innovation in the public sector (IDeA, 2005). While product innovation is of limited relevance to the public sector, the development of new services is an absolutely critical area: the translation of new policy into workable, fit-for-purpose public services remains one of the key challenges for governments (Eggers and O’Leary, 2009). Likewise, business processes have been an important focus of public sector innovation: predominantly efficiency initiatives, but also attempts to make public services more citizen- focused (Varney, 2006). Although process efficiency continues to be an important pre- occupation for the UK government (Davis et al., 2010), it is also clear that a more radical approach will be required if the full extent of spending cuts is to be achieved without detrimental side-effects on important public services (CBI, 2010). In addition to developing new public services and revising the processes that underpin delivery, innovating the governance and contractual models that are used to engage citizens and partner organizations is also emerging as a critically important area (CBI and ACEVO, 2010). Barriers to public sector innovation The main barrier to innovation in the public sector is resistance to change (Borins, 2006). In a major survey of US local government innovations, it was found that the characteristics of the managers involved (for example their age, tenure, and education) influenced whether innovative ideas were adopted (Damanpour and Schneider, 2009). Resistance to change may be of particular relevance in the UK, as the European Values Survey demonstrated that UK officials are highly motivated by conformity to social norms (Parker et al., 2009). A literature review carried out by the UK’s Cabinet Office identified that risk aversion is another key barrier to innovation (Eggers and Singh, 2009). In the public sector, innovations can involve risk for both ministers and civil Magnus Schoeman is employed in the Government Services team in Post Office Ltd and is a visiting fellow at Cranfield School of Management, UK. David Baxter is a senior research fellow at Cranfield School of Management, UK. Keith Goffin is Professor of Innovation and New Product Development at Cranfield School of Management, UK. Pietro Micheli is a senior lecturer at the Centre for Business Performance, Cranfield School of Management, UK. Commercialization partnerships as an enabler of UK public sector innovation: the perfect match? Magnus Schoeman, David Baxter, Keith Goffin and Pietro Micheli This article examines the potential for private sector organizations to contribute to public sector innovation. Specifically, the study explores how partnering with the private sector can go beyond delivery and extend to development of new services and new markets. The term ‘commercialization partnership’ is coined for such partnerships and the article describes an exploratory investigation of this emerging form of innovation. Keywords: commercialization and contractual models; innovation; partnerships; public sector. http://dx.doi.org/10.1080/09540962.2012.728782