you write, “I think that the big difference between the public and private sectors in innovation imperatives is not that the private sector has the profit motive, but rather that occasionally private firms go out of business.”

I think the reason is simpler and more fundamental: 1) the intensity of innovation is proportional to the intensity of competition.
2) The public sector has no competition.

A side note: some similarities in the industries you are describing (printing, photography, newspapers) is that all three are highly capital intensive industries. Baked into the thinking of the execs, especially the CFO’s, is the huge investments they have made in machinery and presses, often just recently, and how these need to be written off over the next umpteen years. The inability to think in terms of sunk costs is another factor here in overlooking disruptive innovation, don’t you think?

We had real inflection points and disruptive innovation, including the rapid decline in our facsimile business and, in my judgment, the most profound change as a result of the Internet, the far greater knowledge our customers acquired relative to competitive offerings because of search engines like Google. The real story of disruptive innovation with respect to the Internet was not online postage, but the rapid and significant increase in customer knowledge and power.

The reason online postage did not fit the disruptive innovation mode was that it would be inevitably held back, as it has been for over a decade, by the way postal and government officials see the world, which is different from private sector customers. There are many innovations that should be disruptive, but are not, because government regulators or procurement officers stop them from coming into being or growing. The disruptive innovative model cannot predict how political decisions will get made.

For example, I watched the whole move toward market liberalization in Europe stall because the German government, at the urging of the leadership of DeutschePost passed what eventually turned out to be an unlawful sector-specific minimum wage law that destroyed DeutschePost’s two main competitors and invited retaliation in other EU countries. The proposed law was dead on November 28, 2007, but with a handful of votes switching in the next week, it was enacted on December 7.

I would not characterize my successes or failures, and I had both, relative to distinguishing between real and false inflection points as “lucky.” We had robust scenario planning and a very outside-in process.