Methods · Social Innovation

The innovation lifecycle in the public sector

Mulgan and Albury's 2003 model, according to which innovation in the public sector is not the idea itself but its successful institutionalization — across five stages, from idea to embedding.

Living Lab editorial team Knowledge Base · Social Innovation

4 min read 2026

The 2003 study by Geoff Mulgan and David Albury (“Innovation in the Public Sector”, Strategy Unit) looks at public organizations not through the lens of market competition but through that of learning processes. Its central thesis: innovation is not the idea in itself, but its successful institutionalization.

1. Not the idea, but institutionalization

David Albury and Geoff Mulgan are one of the defining duos of British government innovation research; they developed the model in 2003 within the Strategy Unit as a version of the innovation lifecycle applied to the public sector. The key idea of the approach is that innovation in the public sector becomes lasting when it is embedded in everyday operations and turns into a norm — what matters is not the one-off idea, but whether the idea takes root in the organization.

2. The five stages

The model breaks the path of innovation down into five fundamental stages:

Idea — formulating new approaches, practices, and technologies.
Development — adapting and testing ideas against real problems.
Implementation — introducing working models into the organizational structure.
Diffusion — sharing results, horizontal learning.
Embedding — the long-term acceptance of the innovation and its integration into rules and routines.

3. The role of institutional learning

The theory highlights the importance of “institutional learning”: successful innovation lies not in individual ideas but in the organizational capabilities that make it possible to sustain change. It is this emphasis that distinguishes the logic of the public sector from that of market innovation — the goal is not competitive advantage, but lasting change embedded in operations.

Living Lab perspective

This approach is particularly useful for analyzing community and municipal processes where the aim of experimental solutions is system-level embedding — for example, in participatory decision-making, local adaptation programs, or new forms of service provision.

Key takeaways

According to Mulgan and Albury (2003), in the public sector the essence of innovation is not the idea but its successful institutionalization.
The five stages of the lifecycle: idea, development, implementation, diffusion, embedding.
Innovation becomes lasting when, through institutional learning, it turns into a norm and a routine.

Series · Social Innovation (10 parts)