Purpose: The main aim of this paper is to explore the organizational and institutional issues for innovation to co-create value by focusing on the influence of public policy and the implementation mechanism, which contributes to a more sustainable public transport system development. The objective is to explore sustainable public transit innovation and development in the Chinese context and answer the research questions: how sustainability public policy is influencing innovation and what is the role of service innovation in integrating local sustainable public transport development with or without conflict between central and local interests.
Methodology/approach: The paper is of explorative nature. It presents different theoretical concepts - (i) Sustainability and sustainable public transit, (ii) Service innovation, and (iii) value creation/co-creation. The paper illustrates these concepts in an in-depth case study of Changzhou Bus Rapid Transit system in China. Critical case study method is employed in this paper to understand the role of policy for integrating sustainability and innovation. The decision-making process of the local transport authorities in Changzhou is assessed and analyzed against the theoretical framework, which explores the joint working practices in public policy sector and its influence in service innovation and sustainable public transit development.
Findings: The study outlines the Chinese policy context in terms of responsibilities, powers and resources available to local transport authorizes, and articulates the tools of government that applied to affect a more sustainable public transit system with the goals of improving environment and meet stakeholder demands. Policies are important in the case of China. Policy integration in urban public transit development enhances the public transport services, drives service innovation and influences the environmental and social patterns.
Research limitations/implications: The single case-study design of the present research does not enable empirical generalizations to be made. Future research in this area should focus on generalizing the present findings by studying the development and integration of sustainability policy in other empirical settings, could be of different BRT systems in China, and re-conceptualization.
Contribution/value: The paper makes an original contribution to the study of sustainable and innovative urban public transit service by explicitly linking the integration of suitability policy and its effect to service innovation and value co-creation based on social and environmental perspectives. The study expands the scope of understanding complex problems and challenges of policy implementation, as well as the potential conflict with the local urban public transit development. It also is contributes to the ongoing discussion in the service research concerning the influence of sustainability towards service innovation and public policy implementation process.