Governments are finding new ways to work with entrepreneurs — is yours?

Mariel Reed
Mar 21, 2018 · 9 min read
From San Francisco to Amsterdam, Pittsburgh to Kansas City to Los Angeles, cities around the world are finding new ways to work with and encourage civic entrepreneurs. (Here: Amsterdam’s STIR, Pittsburgh’s PGH Lab, and Kansas City’s Innovation Partnership Program are just a few examples.)

Governments face daunting civic challenges, from poverty, equity, and mobility to community health and the consequences of climate change. Government resources are limited, but governments are increasingly building the capacity to leverage private sector, academic, and other community resources to address complex challenges.

During my time at the Mayor’s Office of Civic Innovation in San Francisco, I worked on one such effort: Startup in Residence (STIR). This cohort-based program connects city agencies with startups to co-develop a new technology tool over a 4-month residency. It is designed to help governments solve urgent civic needs while also nurturing a new generation of government technology businesses. Since its beginnings in 2014, the program has expanded to include 11 cities and 30 startups.

San Francisco and STIR cities are part of a broader movement: governments around the world are testing new ways to encourage public sector innovation, promote economic development, and catalyze civic problem-solving. Some of these initiatives, like STIR, seek to create new opportunities for governments to work with — and buy products from — non-traditional vendors like startups. Other programs seek to support civic entrepreneurs and be more receptive to new ideas and perspectives from beyond the public sector.

Over the last few months, I’ve been tracking the growth of these initiatives. I’ve catalogued a list of programs, and I’ll plan to continue updating this list. I’ve also categorized programs into three categories:

Government as a customer: These kinds of programs focus on engaging non-traditional partners in solving for specific government needs. They tackle all or some of these major problems:

  • Awareness: Unless they’ve spent time in government or experienced the problem themselves, entrepreneurs might not know there are problems to solve in government. Programs identify business problems and share these challenges with entrepreneurs.
  • Opportunities for co-development: Building a new product requires access to users and iteration over time. Programs provide structure for solution co-development, where businesses can access government stakeholders and build solutions iteratively over a set timeline.
  • Procurement: Traditional procurement pathways are barriers for governments and nontraditional vendors like startups to work together. The competitive bidding process can take 6–18 months and cost a business up to $1.5M to submit a bid. As a result, innovative, smaller vendors are unable to service the global $400B govtech market. Regulations are also frustrating for government staff (as one woman we spoke with told us, “procurement gives everyone in government a headache”). Some programs in this category provide a procurement pathway that allows the government to purchase a solution from a new vendor after a successful period of co-development and/or pilot.
Startup in Residence and B.C. Startup in Residence are “government as a customer” programs. They identify government challenges, allow entrepreneurs and government staff to co-develop new products to address these challenges, and (often) provide a purchasing pathway.

Government as a lab: Even if government is not the customer of a new product or solution, access to government resources — from city data to the public right of way — shape the success of a product’s development. These programs seek to offer government resources as a platform for entrepreneurship. Since government is not necessarily the customer, while government may provide some stipend or grant to encourage participation, these programs typically do not include a new pathway for public purchasing.

Innovate Durham and Kansas City’s Innovation Partnership Program are two examples of “government as a lab” programs. These programs make city data and infrastructure available for entrepreneurs and provide an opportunity for entrepreneurs to test solutions that enhance the quality of life for local residents.

Government as an ideas exchange: This category of programs aims to help governments be more open and receptive to new ideas. Broadly, these programs aim to create new channels for engaging innovative companies and expose government staff to the burgeoning tech industry. They seek to promote:

  • Receptivity to new ideas and partners: Unlike purchasing, regulations around pilots are more ad hoc, especially at the local level. Governments use these ideas exchange programs to increase their openness to testing new products or ideas with new kinds of partners.
  • Public sector inspiration: Government employees can often feel siloed and do not have opportunities to learn from the private sector. Idea exchange programs seek to promote a flow of ideas and approaches across sectors.
LA Metro and Kansas City Area Transportation Authority demonstrate an openness to new ideas and new partners through their unsolicited proposals programs.

Below is the list of programs in each category, as well as a short description of each program. I’d love your help — let’s continue to grow this list. Please send suggestions for additional programs to include via email at mariel@coprocure.us or Twitter.


List of Programs

Government as a customer

  • Challenge.gov: The U.S. federal government offers $250 million in prize money for challenges posted by federal agencies. The Office of Management and Budget issued a memorandum providing a policy and legal framework to guide agencies in using prizes to stimulate innovation to advance their core missions.
  • CivTechSA: The City of San Antonio recently launched a 16-week residency, with a focus on student ventures, to solve 7 challenges across government.
  • CivTech — Scotland: Enterprises respond to partner on a specific government challenge. After an open application, top applicants receive £3,000 to work with sponsors for 3 weeks to refine their proposed solutions; finalists receive £17,000 and the opportunity for a 3-month development cycle, with the option for post-accelerator funding of up to £80,000. Last year’s pilot saw nine firms develop a range of products in partnership with SEPA, the NHS, and Transport Scotland.
  • Demonstration Partnerships Program, Sacramento: This new initiative allows three types of projects: “pilot projects”, which enable limited tests of a product, process, service; “demonstration/testing” where an outside partner uses city assets but the city is not the customer; and “joint development” where the city and external departments co-develop solutions to a problem.
  • Department of Defense (DIUx): DIUx solicits responses to challenges and also allows companies to submit ideas unsolicited. DIUx provides non-dilutive capital in the form of pilot contracts for commercial innovation that solves Department of Defense problems within 90 days — a pilot can lead to a commercial contract, providing an alternative procurement pathway.
  • Dubai Future Accelerators: This 9-week program is designed to create pilots and Memorandums of Understanding to spur innovation across high-level goals.
  • Guelph Civic Accelerator: In its inaugural year, the City of Guelph, Canada posted 3 challenges; selected partners worked alongside City employees with a pathway to procurement. (Analysis here.)
  • Innovative Solutions Canada: Started by the government of Canada, this program aims to support the growth of new Canadian businesses by having the federal government as the first customer. 20 federal agencies set aside funding around a set of challenges. Selected ideas receive up to $150K to build a proof of concept, up to $1M to create a prototype, and the Government of Canada may be the first customer.
  • Joensuu City Challenge: Joensuu, Finland will pay up to 50K euros to pilot a solution to four challenges. Vendors will sign contracts to conduct paid pilot solutions with the city.
  • Small Business Innovation Challenge, Ontario: This program supports small and medium enterprises in developing and commercializing new solutions in response to challenges set by the government of Ontario. After demonstration, Ministries can choose to pursue a Prototype Procurement as a procurement channel.
  • Startup in Residence, Amsterdam: Modeled after Startup in Residence, STIR Amsterdam features 20+ challenges and includes a handful of surrounding cities, too.
  • Startup in Residence, British Columbia: Connects tech startups with provincial government business areas to collaboratively and iteratively develop technology-based solutions for public-sector challenges over 16 weeks timeframe. After the pro bono trial period, government business areas have the option to enter into an ongoing contract for access to and/or maintenance of the tech-based solution.
  • Startup in Residence (STIR): Over a 16-week residency, pro bono residency, city agencies and startups co-develop new technology products. San Francisco treats the program application as a competitive bidding process, so successful startups can move directly into contract negotiations with San Francisco after completing the program. STIR now includes 11 cities across the United States.
  • Toronto’s Invitation to Partner (ITP): Toronto’s Innovation and Procurement teams worked together to release a new Invitation to Partner around creating a more responsive government. The program dedicates $5K in funding for a pilot.
  • Urban Innovation Kobe: This 6-month residency matches civic agencies in Kobe, Japan with companies to co-develop and pilot a new solution to a government challenge.

Government as a lab

  • Civic Innovation YYC: Calgary’s program allows citizens to submit challenge statements, businesses to share ideas and solutions, and the two groups to test ideas for improving city services.
  • Demonstration Partnerships Program, Sacramento: This new initiative allows three types of projects: “pilot projects”, which enable limited tests of a product, process, service; “demonstration/testing” where an outside partner uses city assets but the city is not the customer; and “joint development” where the city and external departments co-develop solutions to a problem.
  • FastFWD, Philadelphia (no longer active): This 12-week accelerator allows startups to pilot technologies on a small scale before deploying them (case study here; article from Wharton here).
  • Innovate Durham: This 12-week residency in Durham, North Carolina gives startups access to Durham data and infrastructure to test out their products and services.
  • Innovation Partnership Program, Kansas City: This 12-week residency in Kansas City is a front door for entrepreneurs to develop, test, and demonstrate innovative solutions with city data and infrastructure. This 12 week program grants access to city data and infrastructure while providing a test bed for new products or services.
  • Multi-City Innovation Pilot (no longer active): This challenge-based pilot across 4 cities — Boston, Raleigh, Palo Alto, Nashville — used $5K of grant funding from each city to pilot a new idea, selected from community submissions across all cities. Unfortunately, the program has since been discontinued due to administrative burden being too high for any one city to manage.
  • NYCx, New York: New York City offers a challenge-sourcing grant program with active challenges in two areas: “moonshots” to address broad global problems and “co-lab” challenges to solve problems in NYC communities. Participants win a $20K award and New York City may release an RFP if companies are successful in the pilot.
  • Pittsburgh — PGH Lab: Startups have opportunity to test tools and services over 3–4 months. Pittsburgh shares areas of interest, but participating vendors can also choose their own categories. Check out the 2016 and 2017 cohorts.
  • Urban Challenge, West Midlands, UK: The program offers a cash reward up-front for participation and access to city agencies over 3 month pilot, although there is no clear pathway to procurement.

Government as an ideas exchange

  • Oklahoma Innovation Portal: Citizens submit problems they encounter with government services, technologists present solutions, and government agencies work with both sides to turn the proposals into reality.
  • Demonstration Partnerships Program, Sacramento: This new initiative allows three types of projects: “pilot projects”, which enable limited tests of a product, process, service; “demonstration/testing” where an outside partner uses city assets but the city is not the customer; and “joint development” where the city and external departments co-develop solutions to a problem.
  • Unsolicited proposals program, LA Metro: Los Angeles Metro lays out a set of broad goals and calls for innovative solutions to reach them. A successful proposal may result in a competitive bidding process.
  • Unsolicited Proposals program, KCATA: Kansas City Area Transportation Authority similarly welcomes proposals from vendors to solve problems that currently do not have a procurement solicitation. A successful proposal may result in a sole source contract or a competitive bidding process.
  • Department of Defense (DIUx): DIUx solicits responses to challenges and also allows companies to submit ideas unsolicited. DIUx provides non-dilutive capital in the form of pilot contracts for commercial innovation that solves Department of Defense problems within 90 days — a pilot can lead to a commercial contract, providing an alternative procurement pathway.

CoProcure

CoProcure makes it easy for local governments to save time and money by collaborating on purchasing — for free! Say 👋: hello@coprocure.us

Mariel Reed

Written by

Making public purchasing better @CoProcure. WEF Global Shaper, ETW SanFrancisco co-founder, Georgetown alum, China (re)pat. Previously @SFMOCI, @Coursera.

CoProcure

CoProcure

CoProcure makes it easy for local governments to save time and money by collaborating on purchasing — for free! Say 👋: hello@coprocure.us

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