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Innovation in the public sector has long been criticized for its failure to fulfill expectations of higher efficiency and better service. Scholars have reported disappointing results in implementing successful innovations. In this article, we develop a conceptual framework that emphasizes organizations' capacity to maintain balance between new innovations and refinement of existing knowledge. We use the concept of exploration and exploitation, commonly applied to private organizations, to analyze public sector innovation. We explain the dynamics of government innovations in social welfare policy in terms of a balance between the two modes of organizational learning and the challenges of balancing them.

Th e signifi cant reforms being implemented in governance systems around the world refl ect a broader transition of society from the modern to a new emerging era. Th is transition is framed in terms of a shift from a mechanistic to an ecological worldview, stimulated by a number of developments during the twentieth century and the last decade. In contrast to the mechanistic orientation toward reductionism, prediction and control, and competition, an ecological worldview emphasizes the interconnectedness, self-organizing capacity, and coevolutionary dynamics of all natural systems. Th is emergent worldview yields useful insights regarding the purpose, design, process, and relationships characteristic of organizational systems that strive to play an eff ective role in the future governance of society. Th e discussion outlines specifi c organizing principles pertinent to these four areas, identifying some compatible practices that are already being adopted by public and private organizations. Th e authors address the possibility that the continued transition to ecological governance may not refl ect just a long, slow process of incremental change, but also could entail a sudden, systemic reorientation that results in a faster transformation of the extant institutions of public administration.

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