Policy design labs and uncertainty: can they innovate?

Faced with multiple political, social, and economic challenges, innovation has become a central concern for governments around the world. Policy design labs have been established in response to this need for innovation in the public sector. They do this by “lab-ing” ill-structured problems and working through them in an experimental environment, outside of traditional government structures. An article in Policy Design and Practice examines whether labs have the capacity to innovate. It argues that labs have potential to change policymaking at the micro level, but innovation needs to be institutionalised in governing structures at higher levels. 

About policy design labs

Policy design labs use a range of experimental approaches to address public/social purposes. There is not a single set of methods that labs use and neither do they all have a common relationship to governments. Approaches include behavioural insights, design thinking, data science and randomised control trials.  

The spread of labs is related to increasing uncertainty in policymaking. Labs are natural homes for testing new approaches to ill-structured or wicked problems. They resonate with the link between high levels of uncertainty about the nature of problems and potential solutions to address them. Labs are also places where agility, adaptability and “failing fast” are promoted.  

Labs and public sector innovation

The article defines public sector innovation as a process involving change that affects an organisation’s operation. The aim is to achieve improvements in governance and service performance to increase public value through internal reforms and processes.  

Innovation that addresses public purposes has become linked with “design-for-policy” via policy design labs. It manifests as a human-centred approach to innovation that draws on the processes, principles and practices used by industrial and service designers. Design is increasingly regarded as an essential capability. It has great potential in offering human-centred, flexible and creative approaches that can contribute to improving public services.  

While “design-for-policy” has become widespread in labs, its application varies considerably. Examining contextual factors that shape the capacity of labs requires stepping outside of their internal structures and practices. Institutional settings matter as does the role of ideas and influence.  

Learning 

Policy learning is defined as a problem-oriented process where policy actors located in different policymaking structures absorb and reflect on policy-issue related knowledge and information. A three-dimensional approach can be used to explore the relationship between individual learning, learning in groups, and macro-level considerations. 

For lessons from labs to emerge, survive and spread, what occurs based on an individual lab’s work must travel via the social interactions within a lab to an external audience. It must align with and be supported by a broader macro context. 

Learning also travels. Lessons need to: 

• move across space to travel over organisational (lab) borders via brokers 
• be acknowledged and supported by potential implementers (external to labs) 
• be absorbed into the institutional fabric of a policy space (governance and policy) such that they are preserved over time.  

Lessons change as they travel and can be created in the process of travel. They sometimes end up as part of a new suite of policies or sometimes die along the way through lack of support.  

The role of networks

Networks underpin the circulation of information. Those who work in labs see them as holding an outsider position, having nontraditional structures and employing more fluid ways of working. Labs can struggle to survive long term, encountering resistance both inside and outside the public sector. This points to the importance of a supporting environment, for the survival of labs, one where innovation is institutionalised. 

This is well understood by labs, making it important for them to build coalitions and support each other through international networks and communities of practice. Networking amongst labs is common. It is also crucial for the retention and circulation of learnings. The relationships and forums that labs build enable them to share evidence and ideas with each other. However, these networks also need to connect into formal policy system.  

The bottom line

Labs have embraced approaches that promote agility and adaptation, recognising that design methods can help to navigate the uncertainty created when policy problems and solutions are not understood. If learning from labs is to be retained and circulated, it rests on the institutionalisation of innovation at higher levels. Governments can spur innovation by establishing rules and procedures for exploring new ideas.  

The ability of labs to work across broader policy systems is crucial for lesson retention and circulation. It is also dependent on the broader political and social context that labs operate within. 

Policy design labs and uncertainty: can they innovate, and retain and circulate learning? – Jenny Lewis, Policy Design and Practice, February 2025.  

Each fortnight The Bridge summarises a piece of academic research relevant to public sector managers.  

Sign up to The Bridge