The concept “innovation in the public sector services” has received much interest recently, in the scholarly literature, as well as on the political and public agenda. But what is innovation in the public sector, and how does it happen? Attention has largely been focused on the market mechanism as the unique driver of innovation and on the obstacle the lack of such a mechanism represents for innovation in the public sector (Altshuler and Zegans 1990; Drucker 1985). The recent approach on innovation in governance (Hartley 2005; Moore and Hartley 2008) emphasizes the need for a theoretical understanding of the distinct character of public sector services. The difference is in the inter-organizational and complex context of societal and political processes, and in the many innovations oriented toward solving multifaceted collective problems.