Paradoxes of Public Service Ecosystems: The Case of Digital Pharmaceuticals

This study investigates the paradoxical tensions inherent in digitally transforming Public Service Ecosystems (PSEs), focusing on highly regulated sectors such as digital pharmaceuticals. While PSEs promote co-creation, adaptability, and stakeholder integration, they remain constrained by bureaucratic oversight, regulatory frameworks, and institutional rigidity, generating tensions that cannot be resolved but must be continuously managed. As digital transformation accelerates, these contradictions become more pronounced, requiring new governance approaches that enable multiactor collaboration while maintaining regulatory compliance and public trust. The digital pharmaceuticals ecosystem, characterized by a shift from a “solo investigator” model to a multi-actor governance structure, provides a relevant empirical setting to investigate how paradoxes shape governance, value co-creation, and service transformation in digital public services. Using a qualitative case study approach, this study integrates documentary analysis and in-depth interviews with key stakeholders, including regulators, healthcare professionals, technology providers, patient advocacy representatives, and policymakers. The findings reveal four major paradoxes that emerge at different governance levels, influencing institutional decision-making, service evolution, and actor interactions: (i) User Engagement (Sequentiality vs. Simultaneity): the tension between traditional regulatory gatekeeping and new, multi-channel engagement strategies that accelerate market access; (ii) Data Governance (Data Sharing vs. Data Retention): the contradiction between the need for collaborative data sharing to drive innovation and the strategic withholding of proprietary data to maintain competitive advantages; (iii) Product/Service Lifecycle (Velocity vs. Stability): the misalignment between fast-paced digital innovation cycles and risk-averse, stability-oriented regulatory frameworks that govern approval processes; (iv) Innovation Governance (Stability vs. Reopening): the challenge of managing continuously evolving digital pharmaceuticals, which require ongoing compliance adaptation rather than a one-time regulatory approval. These paradoxes highlight the challenges of balancing control with flexibility, competition with cooperation, and regulatory stability with continuous service evolution. They underscore the need for governance models that do not seek to eliminate contradictions but instead enable actors to manage them dynamically. By revealing how paradoxes shape governance decisions and institutional adaptation, the study advances a paradox-informed approach to digital PSE management, where public and private stakeholders must strategically navigate competing logics rather than resolve them outright. This research contributes to public management, service research, and digital governance studies by demonstrating that paradoxes in digital PSEs are not transient anomalies but intrinsic structural features requiring ongoing negotiation. The findings emphasize the importance of hybrid governance models, adaptive regulatory mechanisms, and multistakeholder collaboration in managing tensions effectively. Future research should explore how paradoxes manifest in different digital PSEs, such as agri-food industry, smart cities, and digital education, using comparative or longitudinal approaches to assess how governance models evolve over time. By positioning paradoxes as fundamental features of digital public service transformation, this study lays the groundwork for future research on paradox-responsive governance models, advancing theoretical and practical understanding of institutional adaptation in multi-actor service ecosystems.