Business model innovation: How do government training institutes in the Philippines create, deliver, and capture value?

Public-sector organizations have started to adopt new business models that enable them to deliver public service more effectively and innovatively. However, very few studies have been undertaken to describe and to generate lessons from the deployment of new business models in government. Through the case study research design, we examined how four government training institutes in the Philippines create, deliver, and capture value by utilizing Osterwalder and Pigneur’s business model canvass. After undertaking a cross-case analysis, we generated the following insights: (a) the training institutes’ programs and service orientation are influenced by their mother agencies’ mandates or strategic directions; (b) resource constraints can be overcome through a business model that leverages off collaboration and partnerships; (c) the governance model of the training institute’s mother agency influences its propensity to adopt practices consistent with new public management (NPM) principles; and (d) external support or intervention triggers change or innovation in the way a government training institute operates. Consistent with the spirit of NPM and drawing from the notable practices of the four cases we examined, we identified eight criteria that government agencies can use as a guide when rationalizing the establishment of their own training institutes. These criteria are: (1) market responsiveness, (2) innovation, (3) optimal resource use, (4) stakeholder interface, (5) access, (6) customer options, (7) efficiency, and (8) financial returns. Constraints and disincentives that get in the way of government training institutes’ attempts to follow NPM principles can be addressed by setting up new training institutes under a flexible governance model. © 2018 by De La Salle University