Fostering Public Sector Innovation: How Data-driven Organizational Culture Influences Exploitation Innovations

ABSTRACT Objective: public organizations often face challenges in fostering innovation. This study investigates how a data-driven organizational culture (DDC) influences business analytics capabilities (BAC) and exploitation innovations (EXPI) in the Brazilian Navy, contributing to the fields of information systems and public administration. Theoretical approach: this study draws on information systems and knowledge management theories to examine how organizational culture shapes business analytics capabilities and innovation. It also explores the role of analytics in knowledge creation, sharing, and use. Methods: this study applied partial least squares structural equation modeling (PLS-SEM) to survey data from 242 Navy officers in data analysis roles. The Navy's hierarchical and coordinated environment offers a unique setting to explore how organizational attributes shape the role of analytics in incremental innovation. Results: findings show a positive relationship between BAC and EXPI, mediated by ACAP. A strong DDC enhances BAC, particularly in promoting incremental innovation. Conclusions: beyond the public sector, our results highlight the value of fostering a DDC to unlock the innovative potential of analytics. The findings inform strategies and policies to drive long-term improvements through incremental innovation.