Public Sector Innovation: Exploring how public organizations can foster a culture of innovation, adopt new methods, and scale successful pilots

The systematic review investigated public organizations' methods to create innovation-oriented environments through their implementation of design thinking and behavioral insights, together with their expansion of successful pilot projects. The researchers used PRISMA 2020 guidelines to conduct a complete systematic literature search, which examined Scopus, Web of Science, Google Scholar, JSTOR, EBSCOhost, OECD iLibrary, and Nesta for articles published between January 2021 and April 2026. A total of 47 empirical studies and systematic reviews met the inclusion criteria. Thematic synthesis revealed that psychological safety, together with leadership commitment to experimentation and tolerance for intelligent failure, innovation-inclusive performance metrics, and collaborative cross-silo structures, created environments that encouraged innovation. The organization faced multiple barriers to innovation because of its risk-averse culture, which emerged from its legal and audit frameworks, short-term political cycles, hierarchical career structures and budgetary silos, legislative constraints, and leadership turnover. The organization encountered difficulties with design thinking because 67% of its design thinking initiatives reached their final operational stage through the prototyping phase, and 74% of behavioral insights interventions stayed at their basic nudge stage, which resulted in 11% and 17% of successful institution cases, respectively. The analysis showed a sustained "pilot-to-permanent gap" which resulted in less than 30% of successful pilots becoming mainstream operations three years later. Cultural elements and methods combined with scaling activities to create positive feedback loops, according to 60% of studied cases, while the accountability-learning paradox and scaling paradox created recurrent failure patterns that affected 40% of studies. Institutional Theory and Normalization Process Theory received validation; Public Service Logic received partial validation; the Dynamic Capabilities Framework needed public sector capability sequencing to be defined. The assessment found that public sector innovation can succeed but requires sustained dedication to multiple factors, which include cultural enablers, method fidelity, scaling infrastructure, and their respective interactions.