UCL Institute for Innovation and Public Purpose (IIPP) Feed Items

Where do capabilities end and dynamic capabilities begin? Unpacking the “dynamic” nature of capabilities

By Ruth Puttick and Fernando Monge

As we develop the Public Sector Capabilities Index, a question we have been asked is, What are ‘dynamic’ capabilities? And how are they different from ‘ordinary’ capabilities?

In this post, we explain how dynamic capabilities differ from operational ones and why the distinction matters.

Why dynamic capabilities matter

Stating that governments are facing complex problems is a well-rehearsed argument. City governments are having to balance large-scale shocks, such as those caused by geopolitical conflicts or health crises, with managing the demands of day-to-day delivery, often with fiscal constraints.

By Ruth Puttick, Fernando Monge and Rainer Kattel

A great question we have been asked a few times is, “Are ‘dynamic capabilities’ just ‘public sector innovation’ with a different name?”. The simple answer is that they are very closely connected, but they are not the same. Dynamic capabilities are the engine that enables an organisation to move from one-off innovation efforts to innovating and adapting repeatedly as standard. These are the must-have capabilities that no city government can choose to ignore.

By Rainer Kattel

The UK government published last week the Public Design Evidence Review (PDER), an ambitious attempt to answer a deceptively simple question: How do we create better public policies and services that consistently achieve their intended outcomes? One of the answers, the report argues, lies in public design — a term the report introduces.

From the creation of the Government Digital Service (GDS) to the innovative work of the Cabinet Office’s Policy Lab, the UK has seen compelling proofs of concept that design can help governments not only deliver services better but also imagine and shape them differently. Yet, to move from isolated success stories to widespread impact, public design needs to scale — especially upstream, in the early stages of policymaking. That’s what the PDER set out to explore.

Reflections on IIPP’s Applied Learning Programme from the Rethinking the State Forum 2025 by Bridget Gildea, Simangaliso Mpofu, Barbara Chesi and Manuel Acosta Maldonado.

At the recent Rethinking the State Forum, the UCL Institute for Innovation and Public Purpose (IIPP) brought together international collaborators, public sector practitioners, and learning partners for a lively, practice-led session on applied learning in government. Hosted by IIPP’s Applied Learning team, the design sprint focused on how governments around the world are using applied learning as a tool for institutional change and what that means for the UK context.

The conversation began with a simple but important question posed by Bridget Gildea, IIPP’s Applied Learning Lead: ‘What can we learn from our global partners in their experience of this work so far, and how can we bring those lessons home?’

By Manuel Aguilera

By Manuel Aguilera

This title borrows a phrase from Ruth Puttick, Principal Research Fellow at UCL Institute for Innovation and Public Purpose (IIPP), during the panel “Building Dynamic Capabilities: How Do Cities Adapt to Tackle Grand Challenges?” The session was chaired by Dan Hill, Director of Melbourne School of Design, and featured Mariana Mazzucato, Founding Director of UCL IIPP, James Anderson, Head of Government Innovation Programs at Bloomberg Philanthropies, Ruth Puttick, Senior Research Fellow at UCL IIPP, and Bridgette Morris, Innovation and Customer Insights Manager for the City of Cape Town. Held as part of the 2025 IIPP Forum, the panel explored why promising ideas often stall inside city governments and what it really takes to make progress last. This blog follows up on that conversation.

By Manuel Aguilera

Climate change has made it impossible to treat development as business as usual. Extreme weather, food insecurity, mass displacement, and the loss of biodiversity are exposing just how outdated our economic governance models have become. But while governments have shown they can mobilize trillions in times of war or financial collapse, this boldness is still absent when it comes to inequality, hunger, and climate resilience.

In this context, the climate crisis can no longer be seen as an environmental issue, but a governance challenge. And the aid system, still anchored in a donor-driven assistance paradigm, is being called into question.

By Manuel Aguilera

“Don’t even bother talking about efficiency unless you know what it’s for”. With this provocation, Mariana Mazzucato opened the panel “Beyond the Chainsaw: Rethinking Efficiency in Government” at IIPP’s Rethinking the State Forum 2025. The conversation, moderated by Josh Entsminger, PhD student at UCL’s Institute for Innovation and Public Purpose, featured Yamini Aiyar, former CEO of the Centre for Policy Research; Rohit Chopra, former Director of the U.S. Consumer Financial Protection Bureau; Elizabeth Linos, Emma Bloomberg Associate Professor of Public Policy and Management; Damon Silvers, Visiting Professor at UCL IIPP; and Mazzucato herself, Professor and Founding Director at UCL IIPP.

Over the course of ninety minutes, the panel unpacked what efficiency has come to mean in public administration and how, far from being a neutral virtue, it has become a weapon.

By Manuel Aguilera

This blog is a follow-up to the panel discussion From Digital Feudalism to Digital Sovereignty, part of UCL IIPP’s Rethinking the State Forum 2025. The session, chaired by Rainer Kattel, Co-Deputy Director and Professor of Innovation and Public Governance at UCL IIPP, featured Francesca Bria, Honorary Professor at UCL/IIPP, member of the High-Level Roundtable for the New European Bauhaus, and co-author of EuroStack 2025; Mike Bracken, visiting Professor at UCL/IIPP, founding partner at Public Digital and former Executive Director of the UK Government Digital Service; Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at UCL and Founding Director of IIPP; and Cecilia Rikap, Associate Professor in Economics and Head of Research at UCL/IIPP. The recording can be watched above.

By Manuel Aguilera

In 2010, the U.S. government created the Consumer Financial Protection Bureau (CFPB) to restore public trust after the global financial meltdown. It was a bold experiment: a state agency with a clear mission, deep expertise, and a mandate to protect ordinary people from predatory financial practices. By all accounts, it worked. Until it became DOGE’s target.

At the recent panel, which opened IIPP’s Rethinking the State Festival, titled “Rethinking Public Value in the Age of Doge”, former CFPB Director Rohit Chopra described what’s happening:

By Manuel Aguilera

This blog is a follow-up to the panel discussion “Decolonising Public Administration: Rethinking Public Governance and Policy”, part of the 2025 IIPP Forum. The session gathered researchers and practitioners to interrogate how ‘decolonisation’ is being deployed across public institutions, and whether that language is matched by structural change. The recording of the event can be watched above.

What is the state? How does it function? And who benefits from it? For Professor Rainer Kattel, Co-Deputy Director and Professor of Innovation and Public Governance at UCL IIPP, these are the fundamental questions that any serious conversation about decolonising public administration must confront.

Innovation is Political: An unlikely source of guidance to navigate the politics of innovation: academic theory

by Fernando Monge, Ruth Puttick, and Rainer Kattel

A couple of combined decades in the trenches of public sector innovation, from Nesta or the World Bank to exploring the dynamic capabilities of city governments, have confirmed the validity of IIPP’s motto, emblazoned across our colleagues’ tote bags and notepads: Innovation is Political.

The romantic view that the best ideas move and spread effortlessly into practice across cities and governments is a lovely notion, but our interactions with officials all over the world suggest otherwise. Politics fundamentally shape who gets to innovate, for what, and on what terms.

How Do Good Ideas Spread? Why we should support it, when we should not, and why we often talk at cross purposes

by Ruth Puttick

Spreading “ideas that work” is talked about day in and day out by many governments and those who support government improvement efforts. It is taken as a given that sharing and learning can be a better use of resources than always inventing from scratch. And that using better solutions can solve problems, generate value for residents, and help to save money for governments. But what does spreading ideas really mean? How does it happen in practical terms? And do we spend enough time stopping the old, ineffective interventions as much as we advocate the adoption of new ones?

Ideas are in the imagination

First, let’s get precise about what we mean by “ideas”. How to spread things that work is a question that gets asked all the time. It feels obvious. Why not share good ideas? But there is a lack of precision in this statement, and the lack of precision matters.

Structuring Conditions of Public Sector Capabilities: What are they and why do they matter for city governments?

by Kwame Baafi, Ruth Puttick, and Maria Nieto Rodriguez

City governments are, as a rule, idiosyncratic. They can look and feel different, they can face different challenges, and work in different ways. Yet there are similarities. Understanding the patterns in and consequences of commonalities between city governments around the world is essential for our work to develop the Public Sector Capabilities Index, a global measure of city governments’ problem-solving abilities. As researchers, we want to ensure we are making meaningful comparisons between city governments, and for city governments, we know they want to learn from and emulate cities like them.

Here we set out how we are exploring these similarities by incorporating city governments’ structural conditions into our measurement approach, and why these wider conditions matter for city governments and their dynamic capabilities.

by Anjum Dhamija

“We lack some basic capabilities, let alone dynamic capabilities,” quipped one of our research participants. A similar sentiment was shared by many of the government officials we interviewed, indicating a potential understanding of these capabilities being different and more difficult to practice than other capabilities. In this blog, we further discuss the emergence of dynamic capabilities in the city governments of Chennai and Srinagar in India and the conditions in which these are practiced. This research is part of the Public Sector Capabilities Index project to develop a tool for measuring and developing city government capabilities across the globe.

Dynamic Capabilities and Context of India

By Fernando Monge, Ruth Puttick, and Rainer Kattel

Why do some cities seem to tackle complex challenges more effectively than others? Is Helsinki really able to address housing issues more nimbly than Sydney? If so, why? Or why does Cape Town excel in crisis response but not in addressing persistent problems like informal settlements? Our recently published research suggests that — at least in part — the answer lies not just in the cities themselves but in the broader environment in which they operate.

Can dynamic capabilities in city governments be analysed through AI-augmented Qualitative Evidence Synthesis?

By Kwame Baafi, Rainer Kattel and Ruth Puttick

The Public Sector Capabilities Index establishes how best to assess dynamic capabilities. As the potential grows for artificial intelligence (AI) augmented research, what can the Public Sector Capabilities Index learn to effectively collect and analyse data about city governments around the world?

Assessing dynamic capabilities in city governments: insights from developing the Public Sector Capabilities Index

By Anna Goulden

This blog shares the latest highlights from our work to develop the Public Sector Capabilities Index. Led by UCL IIPP in partnership with Bloomberg Philanthropies, the Public Sector Capabilities Index will be a first-of-its-kind measure of city governments’ capabilities to problem-solve and adapt. We call these dynamic capabilities — in simple terms, the abilities of public sector organisations to transform their activities, processes and resources to address both existing and newly-emerging challenges.

Designing the Public Sector Capabilities Index — testing our approach with city governments

By Bec Chau

What makes a city government adaptable? The answer doesn’t come from theory alone but from the people managing complexity every day. The Public Sector Capabilities Index is taking shape through deep engagement with city governments, ensuring it reflects the challenges, constraints, and opportunities they navigate.

By Ruth Puttick

The Public Sector Capabilities Index will assess city governments and compare their comparative strengths in adapting to solve problems and take advantage of new opportunities. Data and evidence are central to the entire process of identifying, assessing, and comparing dynamic capabilities. But what does good evidence look like, how can we gather it, and how can we ensure it influences decision making to support city governments to develop and improve their problem-solving abilities?

It is worth stating up front that evidence is not the same as data. Data is essential to our work and will take many forms, such as interview transcripts and budget data. But data is raw and uninterpreted, whereas evidence is data that has been analysed and used to support or refute a hypothesis or claim. Evidence is what we need to understand impacts and outcomes. In other words, how can we convince city governments, finance ministers, and others, to invest in the development of dynamic capabilities and deliver positive change for residents?

For the Public Sector Capabilities Index, we are thinking about evidence in six categories:

By Fernando Monge | This blog post was originally published on the Datapolis substack.

I just came back from a short trip to the city of Venice. No matter how many stories one has heard, nor how many pictures one has seen, Venice — and the creativity that sustained this Mediterranean superpower and cultural marvel on top of a million nailed trees in a marshy lagoon — stands as one of history’s most captivating urban success stories.

By Mariana Mazzucato, Sarah Doyle, Bridget Gildea, and Luca Kuehn von Burgsdorff

“You need six months to break the habit, one year to build a new habit, and seven years for transformation.” In February 2023, Prime Minister Mia Mottley set out the need for a new economic and social transformation strategy in Barbados. Six months to deconstruct, one year to reconstruct, and seven years to transform.

IIPP launches Strategic Economics Alliance in Latin America aiming to reshape economic theory and practice

The UCL Institute for Innovation and Public Purpose has expanded its Strategic Economics Alliance (SEA) initiative in Latin America through a series of convenings in Mexico and Brazil. These sessions seek to reinforce and deepen IIPP’s existing policy work in the region bringing together women economists, policy practitioners, and civil society leaders to advance new economic thinking and translate theory into transformative policy outcomes.

Professor Mariana Mazzucato, Founding Director of the UCL Institute for Innovation and Public Purpose (IIPP), and her team travelled to Brasilia to launch the report “State Transformation in Brazil: Designing mission-oriented public procurement, state-owned enterprises and digital public infrastructure to advance sustainable and inclusive growth” This visit marked a pivotal moment in a two-year partnership between UCL IIPP and Brazil’s Ministry of Management and Innovation in Public Services (MGI).

By Anna Goulden

Home to over 40% of Bangladesh’s urban population, Dhaka is one of the most densely populated cities in the world. After being voted the 7th most ‘unliveable’ city globally by the Economist Intelligence Unit in 2023, public officials in Dhaka are under increasing pressure to improve quality of lives for the citizens they serve. At the same time, the city is facing a range of environmental, political and demographic challenges. And its population continues to grow, exacerbated by climate-displacement and uneven economic opportunities driving much of the country’s population to its capital.

Creating the Public Sector Capabilities Index — what we have learned, what we are doing, and what we still do not know

By Ruth Puttick

It’s been 18 months since the University College London Institute for Innovation and Public Purpose (IPP) and Bloomberg Philanthropies started developing the Public Sector Capabilities Index. Over this time, we have benefited from the insights, experience and expertise of 20 city governments in 11 countries, conducting over 60 qualitative interviews, as well as dozens of conversations with a wide range of city government experts and practitioners. As we embark on testing how we assess dynamic capabilities, we reflect upon what we have learned, what we are doing now, and what we still need to do.

By Krisstina Rao and Mitchel Pass

As global governance initiatives convene towards creating safety nets that proactively identify, prevent and mitigate risks around digital public infrastructure, there is an increased need to make transparent how DPI embodies the normative values it is postulated to have. Measurement is the first step in this process.

We are guided by the belief that effective measurement practices are an essential part of ensuring that DPI initiatives foster sustainable, equitable, and inclusive economic growth. By developing robust and comprehensive measurement frameworks and tools, we can better understand the impact of DPI and identify areas where interventions are needed to maximize its benefits for all members of society. To achieve this, we are excited to announce the formation of a new Community of Practice (CoP) focused on DPI measurement. This CoP will bring together experts, practitioners, and stakeholders from around the world to share knowledge, develop best practices, and advance the field of DPI measurement.

The CoP will initially focus on the following areas:

By Krisstina Rao

If you’re interested in engaging with topics like these, join our Community of Practice on DPI Measurement. Read about it here.

Does Equity Matter for City Government’s Dynamic Capabilities? Lessons from the City of Cape Town, South Africa

By Nai Lee Kalema

What does equity have to do with city governments’ cultivation of dynamic capabilities?

When it comes to examining city governments’ cultivation of dynamic capabilities in relationship to improved outcomes, service delivery, and public value, equity matters. Here, equity may refer to the extent to which those improvements are distributed across geographical areas and populations and put in service of diminishing highly disproportionate resource and burden allocations.

By Manuel Maldonado

Over the past year, a fantastic group of practitioners and researchers, led by Rainer Kattel and Mariana Mazzucato, have been exploring whether the concept of dynamic capabilities, can be measured — and whether such measurement could provide valuable insights to guide city leaders and other stakeholders in their decision-making.

By Bec Chau, Dan Hill and Daniel Pejic

By Anna Goulden

Structural autonomy, political support, and a balance of skills have been key for cultivating the transformative capabilities required to solve public policy problems in Brazilian city governments. This blog explores lessons learned from our research with three city governments in Brazil and what other governments looking to strengthen their capabilities can learn.

São Paulo City Hall, Recife City Hall and Niterói City Hall were studied to help identify how Brazilian city governments conceptualise and deploy their transformative capabilities. The research forms part of developing the Public Sector Capabilities Index which aims to create a first-of-its-kind global tool for measuring and developing city government capabilities.

By Ruth Puttick and Fernando Monge

Cities’ capabilities don’t exist in isolation. To truly understand what enables cities to tackle complex challenges, we must consider the broader context in which they operate. Our recent research in Finland highlights the importance of these factors, revealing how cities leverage not just their internal strengths but also the support of national institutions, private foundations, and global initiatives.

Studying the Finish Country Context

Over the past six months, we conducted 28 in-depth interviews with officials from Finnish city, regional, and national governments, as well as urban experts from philanthropy, academia, and the private sector. While our full findings will be detailed in an upcoming report, here we share some key takeaways.

By Lorenza Monaco

In the past few decades, the global pharmaceutical industry has seen a strong concentration of R&D and innovation centres in the Global North, and a progressive shift of generic drugs manufacturing towards low-cost developing regions. At the same time, there’s been the emergence of a few ‘excellence centres’, like Puerto Rico and Singapore, and the consolidation of giant hubs like India. Within this global scenario, South Africa was chosen to lead the WHO-sponsored mRNA Vaccine Technology Transfer Programme, a promising and innovative collaboration that may work as a pilot to boost pharma manufacturing in the Global South and facilitate access to vaccines. An example to follow, and to possibly extend?

No Just Transition without Green Industrial Strategy — South Africa between the JET IP and the next G20

By Lorenza Monaco

In the past few years, South Africa has moved significant steps to put the question of a Just Transition at the centre stage. Government plans have been accompanied by widespread debates within progressive academia, think tanks and the civil society. While we observe a generalised perception of the grand issues at stake and the urgency of the matter, initiatives taken are still not enough. Here, some thoughts on the limitations of the current approach and some suggestions for future pathways.

By Fernanda Torres Alam and Josefina Mas

Discover why the Master of Public Administration stands out for aspiring changemakers from alumni Fernanda Torres Alam and Josefina Mas.

Hola! We’re Fernanda and Josefina, or Feña and Jose for short.

By Manuel Maldonado

The world’s most urgent challenges — such as climate change, health crisis, and rising inequality — are rooted in the way our economies are structured. Addressing these issues effectively requires a fundamental shift in the way we do public policy. A shift that promotes sustainable, inclusive growth while encouraging the emergence of grassroots solutions. This approach underpins the notion of missions. Missions are concrete goals that, if achieved, will help to tackle a grand challenge. They set a clear direction for the different actors and sectors whose investment, innovation and effort is required to develop solutions.

By Sarosh Nagar and David Eaves

Interest in artificial intelligence (AI) is perhaps one of the few things growing more quickly than the size of new AI models from companies like OpenAI and Anthropic. Central to this boom is “compute” — the processing power, memory, and resources needed to perform the computations underlying AI systems. The world’s compute is mostly concentrated within three American giants — Amazon Web Services, Microsoft Azure, and Google Cloud, while in China, Tencent and Alibaba are formidable players.

By Ruth Puttick

The Public Sector Capabilities Index explores if and how dynamic capabilities can be measured in a city government context. While the concept of dynamic capabilities has some history in private organizations, it is relatively nascent in the public sector, particularly at the urban level. Consequently, few individuals within city governments are familiar with the concept of dynamic capabilities. This unfamiliarity presents a dual challenge: it complicates the identification and measurement of dynamic capabilities in city government and makes it difficult to translate these findings into actionable insights for officials and practitioners.

The Problem

We know that some public sector activities are difficult to measure, or as Mintzberg put it:

By Ruth Puttick and Fernando Monge

The Public Sector Capabilities Index is focused on identifying where city governments are strong and where certain capabilities need to be built up. Although it has a city government focus, we are keen to learn from parallel sectors and historical examples. Following our recent interview with Shaun Hazeldine, Head of the IFRC Solferino Academy, in this blog we explore lessons from its work to enable humanitarians to find creative solutions to complex challenges.

The Solferino Academy is the “Think and Do Tank” that supports the International Federation of Red Cross and Red Crescent Societies (IFRC). Specializing in Innovation, Leadership and Strategic Foresight, the Solferino Academy supports the IFRC’s network of National Societies “to transform and be fit for the challenges and opportunities of the future”.

By David Eaves, Krisstina Rao and Kassim Vera

Digital Public Infrastructure (DPI) is an emerging term that describes a number of foundational capabilities that enable individuals to participate in society and markets as a citizen, entrepreneur, and consumer in a digital era. At the UCL Institute for Innovation and Public Purpose (IIPP), we define DPI as including digital payment systems, digital ID, and data exchange system(s) (DES). Each component plays a distinct role: digital payment systems facilitate financial transactions, digital IDs verify personal identity, and data exchange systems manage the secure flow of information across multiple platforms.

By David Eaves

A central dilemma for anyone interested in government is the dual nature of the state. On the one hand, the state can be a powerful force for good — harnessing and collectivising resources to create, or enforcing rules and norms that support, public goods. In this role, states have created miraculous outcomes — sewage systems, public health and education, courts… public goods that have radically improved people’s lives. On the other hand, the same Leviathan-like power that can make the state critical to creating public value also make it terrifying. The world is sadly filled with examples of states power used to displace, punish and terrorize marginalized communities, pursue wars of aggression, or simply eliminate dissent.

By Ruth Puttick

The UCL Institute for Innovation and Public Purpose (IIPP) and Bloomberg Philanthropies are developing a Public Sector Capabilities Index. The aspiration is to measure where city government capabilities are strong and where skills must be built up. It will focus on city governments, but as part of its development, we are keen to learn from parallel sectors and historical attempts at capability building. This blog explores the public sector reforms and restructuring of government carried out by New Labour in the UK.

What happened?

Civil service reform was a core component of “New Labour” during Tony Blair’s leadership from 1997 to 2007. During this time there were various initiatives, including the 1999 Modernising Government white paper, which aspired to create a ‘joined up’ government and ‘learning labs’ to promote public service innovation.

By Nora Clinton, Head of the Mission-Oriented Innovation Network (MOIN), Institute for Innovation and Public Purpose (IIPP)

At IIPP’s 2024 Rethinking the State Forum in June, many of our external guests from policy and academia commented on the dynamism of the Institute for Innovation and Public Purpose and its deep commitment to putting public value, how it is imagined and practiced, at the center of government and democratic discourse.

This dynamism emanates naturally from our highly committed researchers and academics; but increasingly it is IIPP students in our Masters in Public Administration (MPA) in Innovation, Public Policy and Public Value who are outstanding in their work.

Developing a Public Sector Capabilities Index: Lessons from Bogotá, Barcelona, Freetown, Seattle and Seoul

By Rainer Kattel, Ruth Puttick, Mariana Mazzucato, Anna Goulden, Iacopo Gronchi, Fernando Monge, Mia Tarp, Kwame Baafi, Bec Chau, Anjum Dhamija, and Manuel De Feria

By David Eaves and Krisstina Rao

Last month (June of 2024), we launched the DPI Map — the first comprehensive view of the state of digital identity, digital payments and data exchanges across the world.

This work started — in part — because there was little understanding of how many countries had adopted Digital Public Infrastructure (DPI) around the world. Given the growing interest by policymakers, multilateral funders, public officials and public interests advocates, we hypothesized that a “map” of DPI could help create a baseline understanding of what is happening, and more importantly, help serve as a foundation for both future research and community on this topic.

And while early successes suggest that that hypothesis has been validated we’ve been so busy with outreach that we’ve not had much chance to share any emerging insights from the initial DPI map we’ve published. This blog post seeks to change that!

Caveats

Before we begin sharing the exciting insights we’ve gleaned so far, there are two important pieces of information to share.

By Krisstina Rao and Michael Chapman

The G20 Digital Economy Working Group and New Delhi declaration have drawn significant attention to the concept of Digital Public Infrastructure (DPI) and made it a critical topic of discussion in international fora. Here at University College London’s Institute for Innovation and Public Purpose (IIPP), David Eaves and Jordan Sandman defined DPI as a set of digital capabilities that are essential for participation in modern society. Prominent examples of DPI include the Central Bank of Brazil’s Pix (instant payments), India’s Aadhaar (digital ID), and the Estonia-led X-Road (data exchange layer). Others, such as the UNDP, have adopted similar or even broader definitions, often grounded in Brett Frischmann’s view of infrastructure as a “shared means to many ends.”