How Civic Innovation Happens

By Donna Harris and Suzanne Clark

1776 and the U.S. Chamber of Commerce and its Foundation just released the Innovation That Matters report. Watch the video, read the piece, and then head to http://InnovationThatMatters.vc for the full report.

Cities across the country have seen the power of Silicon Valley. And they want that eye-catching, economy-boosting, headline-making innovation for themselves. But Silicon Valley has a decades-long head start and an HBO show to its name. How can any other region hope to compete?

Meanwhile, startups are eager to translate that same path-breaking innovation to highly-regulated industries like healthcare and energy that have a huge impact on our daily lives. But they’re often left searching for the right place to start. Too many of today’s entrepreneurs have huge, game-changing ideas, but don’t know how to get their foot in the door or cut the red tape.

So how can a city attract the entrepreneurs who tackle those important challenges and give the local economy a shot in the arm?
And if a city could attract them, what happens next?

These questions have been hanging around without answers for far too long. They’re not going away, and for every moment that cities aren’t fostering civic entrepreneurship we all lose out.

So 1776 and the U.S. Chamber of Commerce set out to identify a framework that gives our cities a path forward to build something that works.

In our research, we looked at why some cities are hotbeds of civic innovation, while other cities still haven’t unlocked the keys to success. The effort — the first of its kind — took six months, eight cities and interviews with hundreds of entrepreneurs.

Hundreds of conversations, and thousands of frequent flyer miles later, we have a lot to share.

The report we released today makes it clear: We need active and purposeful connections between networks to enable startups to disrupt those highly-regulated industries in a meaningful way.

Our conclusions matched the success stories we’ve seen before — and in some cases, helped to be a part of — but the research bore out our thesis. These stories were no isolated incidents.

While we’ve always seen that driving connections between networks was critical to success, this effort helped make clear just how true that is. Everyone we sat down with had a lot to say about what made their city different, but again and again, in city after city, we saw the same consistent patterns and drivers of success.

“Everything [in Boston] starts with the talent, and that’s the biggest strength here. There’s diversity from a skill point of view — the hackers from the technical schools and the hustlers from the business schools — plus a diversity of nationalities.”

Eveline Buchatskiy, TechStars

“One great benefit of Chicago is that you can bring all these major actors together into a concentrated ecosystem that is more connected to the Heartland and less isolated than the coastal cities. Things that work in Chicago can spread to the rest of the country more easily.”

Haibo Lu, CancerIQ

Some cities, like San Francisco, are more established. Others, including Chicago, are really just beginning to hit their stride. Boston’s competitive advantage lies in its talent pool, while New York City’s strong community-backed programs are a huge part of its success to date.

But no matter their strengths and weaknesses, the similarities among cities were more striking than their differences. From San Francisco to Chicago, and from Austin to Boston, we saw the power of connections: Once you get everyone to the table and working together, incredible things happen.

After 366 interviews, here’s what we know: Mobilizing a city’s networks is the secret sauce to a successful entrepreneurial community.

Here’s how cities can make that happen:

• Establish System Connectivity — Connect the dots between startups and city stakeholders to help create a collaborative community
• Embrace the Friction — Allow conflict and competition to flourish as a necessary complement to collaboration, in order to create more effective and dynamic solutions
• Build the Market — Open opportunities for startups to propose and create new solutions to the existing needs of civic institutions
• Turn the Lights On — Partner with startups to create information that reveals what is already happening within civic institutions
• Unlock Hidden Capital — Build avenues to better channel communities’ existing wealth toward startup activity

None of our eight cities have totally solved the equation.

They haven’t fully leveraged local institutional and corporate networks on behalf of civic entrepreneurs. And we heard from entrepreneurs in every city that corporations and local civic institutions — schools, hospitals, utilities and local governments — are the entities that are least engaged.

“While San Francisco is really great at a lot of things, there is a realization that in certain sectors you need to be somewhere else.”

Laurent Crenshaw, Yelp

Specific industries have plenty of room to grow, too.

In education, our schools can do an awful lot more to make edtech more effective by identifying (and communicating) what they actually need from startups. That sort of communication would help the industry grow by leaps and bounds — speeding up the pace of progress to the benefit of our students.

“Until recently in education, there was no urgency to innovate and work with startups. The model was working just fine. Now that’s starting to shift.”

Jeff Dunn, DeVry Education Group

Or take healthcare. Startups in the healthcare industry sink or swim entirely based on their ability to reach and empower consumers. If cities support their efforts and connect them to local health institutions like hospitals and providers for pilot programs, who knows what kind of increased innovation we might see? And as our healthcare system moves towards outcome-based, full cycle care, these connections are more important than ever.

“There’s a huge focus now on creating a full cycle of care. It’s not just the hospital visit, but looking at it as a whole.”

Dr. Richard Wolfe, Beth Israel Deaconess Medical Center

With Innovation that Matters, we’ve defined a clear roadmap to success — identifying ways that cities and industries can create an environment where entrepreneurs are empowered to solve some of our biggest problems.

But now it’s up to the cities. If they use this report to open their networks and create a stronger environment to bolster startups, if they apply the report’s findings in ways that are smart for their cities, and if they use these models to inform economic policies and strategies, it will pay off for decades to come.

That’s not just good for business, and it’s not just good for the local economy. It’s good for all of us. We’re talking about innovation that matters, and it has the power to change our lives for the better.

See the full report at http://InnovationThatMatters.vc.

Donna Harris is cofounder and co-CEO of the global startup incubator and seed fund, 1776. Suzanne Clark is Executive Vice President of the U.S. Chamber of Commerce.