Increasing Governance Innovation Capacity of Local Governments Through Knowledge-Seeking

This study explores the relationship between governance innovation capacity, knowledge-seeking, and transformational leadership in local governments. Despite the importance of innovation in public governance, many local governments face challenges due to limited innovation capacity. Using a multisite case study approach, this study analyzes two local governments in Indonesia, involving eight agency leaders. The research suggests that transformational leadership can moderate the impact of knowledge-seeking on innovation, fostering practices that enhance governance innovation. Findings underscore the crucial role of leadership in promoting knowledge-seeking and fostering innovation within local governments, particularly highlighting the need for leadership continuity and alignment across all levels of management. However, the innovation capacity observed is limited to individual level, suggesting the need for further research into organizational and network dimensions to support a more holistic approach to innovation. The findings also highlight the need for local governments to invest in transformational leadership as a catalyst for innovation. To achieve this, leadership should be promoted not only at the political level but also within agencies, especially among mid-level and operational leaders. Local governments should prioritize leadership development programmes that foster transformational qualities and create mechanisms for the creation, acquisition, and application of knowledge across departments and with external partners. For future research, it is recommended that a framework be developed to explore the influence of transformational leadership, while also considering the role of transactional leadership – which remains dominant in some sites – as well as the organizational structure and inter-agency collaboration in strengthening governance innovation capacity. A qualitative approach could provide deeper insights into how differences in leadership styles impact governance innovation and help capture dynamics not fully addressed by quantitative methods.