The UNECE Committee on Economic Cooperation and Integration (CECI) promotes the knowledge-based economy and innovation. This newsletter provides a platform for disseminating its results and dialogue within its stakeholder community. For current and previous news about CECI's activities in the area of knowledge-based development, please see http://www.unece.org/kbdnews.

The weight of the public sector in the modern economy is substantial. It plays a key economic role as regulator, service provider and employer. Innovation in the public sector can lower costs and increase efficiency and quality, with better use of existing resources, says Irene Ek, Innovation Policy Analyst at Growth Analysis Sweden. The Swedish government is increasingly acknowledging the importance of public sector innovation. However, it is still under-used as a driver of economy-wide innovation, and there is a lack of policy instruments to support innovation demand, leading to a bias towards supply-side policies.

Public sector innovation is high on the agenda of many governments. They have used digitization to save costs and to reduce administrative burdens for citizens and businesses. However, better government is not only about digitization of existing products and processes, argues Matt Poelmans, Director of CitizenVision. It is about new ways to serve the customer and to create public value. Both the challenge and the benefit lie in collaboration: within the public sector and between the public sector and civil society. The e-Citizen Charter is an innovative instrument to involve citizens in improving service delivery, civil society participation and public policy renewal.

Social enterprises play an important role in addressing social, economic and environmental problems. Big challenges and big opportunities lie ahead for Governments to support and mainstream effective social enterprises, says Antonella Noya, Senior Policy Analyst and manager of the OECD/LEED Forum on Social Innovations. She argues that a coherent policy framework to support social enterprises is essential to maximise their impact. However the policy processes are just as important as the policies themselves. Policies are more effective if they are built through horizontal co-operation and vertical co-ordination within government, and in co-operation with stakeholders.

“Building Strategies for Regions of Innovation” was the topic of the 2012 policy conference of the UNECE Team of Specialists on Innovation and Competitiveness Policies in Geneva. One of our major conferences in 2013, which took place in Dubrovnik, featured a session on innovative social entrepreneurship. An interesting project which combines aspects of both of these topics is the UNDP COAST project in Croatia. The COAST project has demonstrated how economic development can be reconciled with preserving the biological and landscape diversity of rural Dalmatia, through sustainable use of natural resources, says Gojko Berlengi, UNDP and MAP/PAP/RAC Consultant.