Publicly owned enterprises (POEs) bridge the gaps between private and public sector. But are POEs capable of innovating, and how? In what conditions and at what cost?
The publicly owned enterprises (POE) bridge the gaps between private and public sector in that they operate according to market principles and, at least in an ideal case, need to actively compete with purely private business enterprises. In certain cases however, municipal enterprises may represent a monopoly, thus significantly changing the local market landscape. Therefore, possible market distortions resulting from public authority-controlled enterprises also need to be taken into account in the analysis of innovation capacity and diffusion.
On the other hand, POEs represent a special case as their operations follow business and market rules, allowing for the flexibility of innovations in the private sector, while being subject to at least some of the constraints on innovation typical for the public sector. It is mostly through policy and managerial approach that public authorities can influence and stimulate the introduction and diffusion of innovation.
The CCIC partners had a meeting in Genoa (Italy) to discuss the theme of POEs and some of the key questions were: Are POEs capable of innovating, and how? In what conditions? At what cost?
Some other questions that came up were:
• What is considered a publicly owned enterprise? How is it structured in relation to the local or regional authority?
• What is the role of publicly owned enterprises in each partner’s region? What are the most common economic sectors where they operate?
• How is profit realized and distributed? Are the profits of such enterprises used to offset other public expenditure, and why? Is revenue from usual operations sufficient to keep the enterprise financially healthy? What are the principal differences with the private enterprises?
These discussions among the CCIC partners are expected to lead to conclusions on relative advantages or disadvantages of POEs with respect to their innovation capacity.