This article studies the contribution of exploitative and explorative innovation to the perceptions of economic and social value of local authorities in charge of sustainability-related innovation. The model proposed is tested capturing the perceptions of 656 local authorities. The research findings contribute evidence of complex linkages between innovation forms (i.e. exploitative and explorative) and facets of perceived value. Overall, the link between the perceptions of both forms of innovation and economic value fits March’s (1991) view. A positive effect of both exploitative and explorative innovation on economic value is found, coupled with a negative interaction effect. The influence of exploitative innovation is stronger than that of explorative innovation. However, this is only part of the story. We also consider the link between exploitative/explorative innovation and one additional facet of value: social value (in the form of network identification). The roles of both predictors are virtually opposite: identification is mostly explained by explorative innovation, rather than exploitative innovation. The social value dimension considered in this research adds an explanation as to why public organisations may focus on exploration or combine both exploitation and exploration.
Points for practitioners
• Public managers may focus on exploitative innovation (when economic value considerations are dominant) and on explorative innovation (when social value thinking prevails), or combine both activities.
• Network promoters should not assume that public managers favour exploitative innovation over explorative innovation.
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