The Value Created Through Co-creation

insights, recommendations, meanings and lived experiences, as well as the organisational competence of actively tapping into this feedback and incorporating it (Ramaswamy & Ozcan, 2014, p. 56). Following Leavy (2012), reflexivity can also be termed reflective learning.

Finally, Ramaswamy & Ozcan (2014) propose that transparency in information is key to enabling the stakeholders to achieve access to information, engage in meaningful dialogues, and enhance reflexivity (p. 55). It is concerned with making information visible to reduce information asymmetry between the involved parties (Prahalad & Ramaswamy, 2004). Further, the authors propose that information transparency builds trust, enabling stakeholders to share their perspectives and opinions, which can lead to the emergence of new sources of value.

It should be emphasised that the elements of the DART framework are highly interlinked and hence challenging to separate. For instance, Prahalad & Ramaswamy (2004) argue that it is difficult to achieve a rich dialogue if stakeholders do not have the same access and transparency to information as the focal organisation has. Thus, the components of the framework reinforce one another and one component cannot exist without the others.

value of the co-creation process lies in the process itself, and thereby in the interactions between the organisation and its stakeholders, as noted by Ramaswamy & Ozcan (2014). Examples of process value include an increase in social capital for civil society and improved relationships between the public organisation and its stakeholders (Voorberg et al., 2014, pp. 19-22; Agger & Tortzen, 2015, p. 24; Agger et al., 2018, pp. 10-14). In addition, Agger et al. (2018) propose four fundamental types of value that co-creation has the potential to create in the public domain: a) public value, b) democratic value, c) the value of quality and efficiency and d) innovation value.

Firstly, the notion of public value is increasingly emerging as a term for the value generated through co-creation (Agger et al., 2018). Moore (1995) introduced the public value perspective as a direct correlation to the concept of shareholder value in the private sector, advocating that the public sector is not simply a service-provider or rule-setter, but a creator of public value both socially, culturally, politically and economically (Benington & Moore, 2011, p. 3). Public value is created through inclusive dialogue and collaboration with actors in multiple sectors (Bryson et al., 2014), and the concept thus carries resemblance with the characteristics of NPG. Further, it is an umbrella term that adopts a holistic and long-term perspective on initiatives, with a focus on how solutions benefit the general public and future generations (Agger et al., 2018, p. 28). Examples of public values include strengthening entrepreneurship to foster economic growth, promoting sustainable development and enhancing well-being for citizens. Thus, public value also encompasses the other categories of value identified by Agger et al. (2018), as presented below.

Secondly, with democratic value, Agger et al. (2018) refer to the creation of a sense of

empowerment among civil society, meaning the opportunity to wield influence on the development of society. Further, the generation of social capital in the form of relations and collective action competence is highlighted as a potential result of co-creation. This perspective is also shared by Torfing et al. (2019), who argue that co-creation has the potential to strengthen social cohesion by empowering local actors, increasing mutual trust and generating social capital, which then enables public and private actors to utilise their relations to achieve new things. However, following

Voorberg et al. (2015) and Loeffler & Bovaird (2018), the presence of social capital is also required among civil society to build commitment for engaging in co-creation activities. As such, social capital can be viewed both as a precondition for, and a potential result of, co-creation.

Thirdly, efficiency value entails value in the form of quality and efficiency and is commonly used as an argument for practising co-creation. Here, the objective of collaborating is to achieve

cost-effectiveness and an increase in quality for public services and solutions, essentially achieving

“more for less” (Agger et al., 2018, p. 22), by combining the knowledge and resources of the stakeholders involved. Hence, this value perspective is closely connected to the NPM paradigm.

Nonetheless, scholars argue that there currently is a lack of empirical research supporting the case for achieving short-term efficiency savings through co-creation (Agger et al., 2018). Rather, initiating co-creation commonly entails a rise in costs due to an increase in time expenditure for actors in the public sector and a need for resources to support co-creation processes (Loeffler &

Bovaird, 2018, pp. 276-278). Thus, if time and resources are limited, co-creation is unlikely to be an attractive and effective strategy (Hartley et al., 2013, p. 828). However, when omitting the cost perspective and focusing solely on efficiency value in the form of improved quality, Torfing et al.

(2019) have found that co-creation can improve existing solutions and make them more holistic and adapted to local wants and needs.

Lastly, Agger et al. (2018) highlight the opportunity to generate innovation value through co-creation. Similarly to the notion of co-creation, the concept of innovation is elusive and

encompasses a wide range of views and approaches, and research has not yet yielded a prevalent consensus on how to define it. According to the pioneering works of Schumpeter (1947, p. 153), innovation holds the key to economic growth and can be divided into five different forms: 1) the introduction of a new product or improvement of an existing one, 2) the introduction of a new method of production, 3) the opening of a new market, 4) new sources of supply of materials and 5) new ways of organising.

Through an extensive literature review and factor analysis, Johannessen et al. (2001) establish a common denominator of innovation of these five forms of innovation, as well as a sixth form, the introduction of new services. They found that the essence of innovativeness across the six different innovation activities is newness, and thereby propose that innovation is something more than just change. Relatedly, Hartley et al. (2013) and Ansell & Torfing (2014) argue that while innovation involves change, not all kinds of change qualify as innovation. Innovation involves the creation of something new, however, they suggest that it does not have to be something entirely new that has not been seen anywhere else previously. Rather, innovation can also result from the adoption and

adaption of innovation created by others. It is thus not the source of innovation but the context of implementation that determines whether an activity is innovative (Hartley et al., 2013).

The practice of co-creation is viewed as a strategy of open innovation whereby companies and stakeholders jointly generate knowledge, develop innovative ideas and bring them to market (Enkel et al., 2009, p. 313). With Chesbrough’s (2003) introduction of the concept of open innovation, the need for companies to open up their innovation processes and combine internal and external resources to innovate was presented. In contrast, for most of the twentieth century, closed innovation thinking dominated and viewed control as a requirement of successful innovation processes, thus companies limited their interactions with the outside environment (Lichtenthaler, 2011). However, this more recent open way of organising for innovation is based on a collaborative approach to innovation, where knowledge and resources are combined across organisational

boundaries (Ollila & Yström, 2016), widening the space for value creation. In the public sector context, open innovation is proposed to be supported by the characteristics of NPG, as presented in section 3.2.1 (Hartley et al., 2013).

As highlighted, the practice of co-creation and open innovation carry common characteristics.

However, while open innovation has a strong focus on innovation purposes, co-creation can involve a wider range of activities (Enkel, 2009). Nonetheless, co-creation is proposed to hold a largely unrealised potential for stimulating processes of innovation in the public sector (Hartley et al., 2013, p. 826). Stimulating such processes requires that co-creation is carried out under the right

conditions, which following Hartley et al. (2013) involves the presence of certain types of

leadership and management. The question of how to create favourable conditions for co-creation to emerge and flourish will be addressed in section 3.3.

In summary, the spread of the NPG paradigm, and the acknowledgement that society’s public challenges are too complex to be solved by the public sector alone, has led to the incipient spread of co-creation, a collaborative process during which an organisation engages at least one stakeholder outside of its organisational boundaries in an attempt to solve a shared problem or task. The process of co-creation necessitates the use of platforms for interactions and can be divided into three phases:

co-initiation, co-design and co-implementation. Promoting interaction is key to enabling value creation in processes of co-creation, which can be in the form of product and process value and

further as public value, hereunder democratic value, quality and efficiency value and innovation value. To enhance the quality of interactions, and thus value creation, organisations should focus on strengthening dialogue, access, reflexivity and transparency in interactions with their stakeholders, constituting the DART framework.