SubscribePaper 08: Forget Sweet Tea, Government Needs Red Bull
If North Carolina is to drink the sweet tea of innovationalism — then state and local government needs a shot of Red Bull.
Necessity demands it
Unable to print money, the recession is starving non-federal government agencies in the short term, while the public’s distaste for taxes challenges the long term. Words like tax increase and euphemisms like tax reform and revenue enhancement receive about the same amount of public support as “chlamydia” and “leprosy.”
No matter the words — people dislike taxes and there’s a steady trend away from more of them.
Citizen expectations are rising, thanks to past business success. Consumer experiences set benchmarks for citizen experiences — tough standards for governments to reach. Many citizen consumers think — if the gratification isn’t instant, if the journey isn’t emotional, if the brand isn’t human, and if I’m not at the center of it all — then what’s the point? What are a group of citizens with high expectations likely to demand of their government? What will they think if they don’t get it? Will they value government more if they do get what they want? They just might.
Googleification brings choice, meaning citizens can go elsewhere for services previously provided by the government. Forget government supported co-ops — you can go off the grid. Forget public libraries — you can surf for online book swaps. Who needs government-enabled cable — satellite and Hulu are easy. Basic service questions, oft handled by government workers, appear through both government and non-government sites. Sophisticated academic courses, taught online by the best faculty, can cost less and be more convenient (disclosure: Leslie works for the UNC system) than the face-to-face format.
None of these trends will take all the customers of government — they’ll start by taking the citizens likely to vote — but think about it: are citizens who don’t use the library more or less likely to vote for a new branch?
Add it all up — starving funding, inflating expectations and exponential choice — and it means an increasing population of people with government some governmental independence, who may be less likely to support things they perceive to pay twice for.
How will government respond?
Fortunately, government can innovate. New technology makes it possible and smart people make it probable – if we can turn them loose on solving the problems – if we can let them innovate.
Government may be a little late to the party, but here are just a few innovative things government is doing to become more efficient and to explore new revenue streams:
- People can now do job search and perform some basic unemployment services online, lessening the need for as many real government workers to be in offices and expanding the public’s ability to get help finding work — what was help 9-5 M-F becomes help 24/7 M-S.
- Red light cameras are making intersections safer, increasing revenues, and reducing public safety costs (okay, but we still hate them)
- Outsourcing parking services is increasing revenues and reducing manpower costs (we’re really working to be positive here)
- Some public records and many forms are available on line, enabling customers to work on them on demand
- Local governments are redesigning garbage pickup routes to optimize efficiency is reducing vehicle miles traveled ; new trucks are mechanizing more of the process.
- Leak detection sensors are giving pinpoint locations of breaks in water mains.
The innovations to date in government would generally fall into what we called in Paper 03, “little I” innovation, but they do fit our definition of innovation: they show “the ability to translate new ideas and technologies into new systems, products and services.
But that’s just process efficiency. Imagine a government that was optimized for innovation. Where would it innovate? And how? There may be some lessons from the experience, painful and positive, of businesses over the past twenty years. We’ll look at that in the next post.
A closing thought
Nobody we know is working in government because they believe they have a right to a taxpayer-funded job. They work there because we want our towns and cities and counties and state to keep getting better, and they believe government can help. The changes in our economy enable us to serve people better; they demand that we do it more efficiently and effectively. That means changing the way we do business, and the kind of business we do, over and over again. That means becoming a truly innovative government.
What are your thoughts? Do you buy the idea that government is slowly losing customers and will face starvation over the next few years? Why or why not? How can expectations be met? Email or twitter us, or comment below.
Tags: Citizen, efficiency, Google, government, Hulu, innovation, leadership, Red bull, starving government, translate, UNC
The role of government per se isn’t to innovate, the purpose of the government is to set stage so innovation can flourish. That it has failed so dramatically can be seen by this paragraph from a Robert Creamer Article on Huffington Post:
“Over the last several decades, the financial sector has grown relentlessly. It has doubled in size over the last 14 years. During the period 1973 to 1985 the financial sector never earned more than 16% of domestic profits. This decade, it has averaged 41% of all the profits earned by businesses in the U.S. In 1947 the financial sector represented only 2.5% of our gross domestic product. In 2006 it had risen to 8%. In other words, of every 12.5 dollars earned in the United States, one goes to the financial sector, much of which, let us recall, produces nothing.”
http://www.huffingtonpost.com/robert-creamer/the-dominance-of-the-fina_b_317310.html
For anyone really interested improving innovation and creating economic growth this scenario has to change. To have 41% of all profits going to an industry that produces nothing is an astounding failure of government to manage the economy for the well being of the population at large and particularly for innovators.
Until we get politicians with some spine to stand up to the Wall Street Pirates, creating a climate for innovation will be impossible.
Innovative technologies will be sucked up for quick profit not to for sustained product development or to create long term
economic prosperity.
I agree government has a key role in setting the stage for innovation, helping to figure out which regulations get in the way of healthy innovation, which changes might foster more healthy innovation, and in which cases it needs to set limits on irresponsible behavior.
The point of the post is not to argue that government has NO role in setting the stage, but to argue that it ALSO has a role in re-inventing itself, making its own operations and procedures more effective (delivering existing programs better), more efficient (delivering more bank for the buck) and responsive (better calibrated to real people’s unmet needs) — more innovative — to better serve its customers.
Government has a lot of restrictions, for example, Government cannot endorse one product or service over another, it has to take the lowest bid in most contracts, it has preferential allowances for disabled, veterans, women etc, most government work in the large agencies like DoD and NIH is actually already contracted out in GSA or prefential bid requests.
They also have a lot more paperwork because of legal requirements, futher governments work off budgets created the previous year, an idea that happens in November will not get funded until July/October next year. Government does somethings very well, for example the leading agency in fight again infectious diseases like malaria, Dengue Fever is the US Army (AMEDD). Government does very well for mega projects, but fast turn around innovation does not work for them, neither should it. They are in a sense the honest broker, if they get to involved (just follow the recent health care reform attempt) they get bogged down between powerful interests. Though I believe everyone should have some kind of basic health care, if only for the health of others.
As to my post, right now the cover of Time is “why Main Street hates Wall Street”, and if you were a small business or a start up going through the last year you would not need to read the magazine. Government has completely failed small business, and in the process innovation. The winners are Wall Street…
Innovation and especially disruption almost always happen when an industry or organization has become complacent. The music distribution industry became complacent and an electronics manufacturer (Apple) developed an entirely different mechanism to distribute music and in less than five years Tower Records is bankrupt. Innovators will always find a way to disrupt a large competitor that does not and will not adapt and adjust to new needs and wants. Likewise, citizens will seek out other alternatives to government services if those services are lacking or less than satisfactory, especially if the government does not seem to understand the depth of the need. This means that government needs to do a better job not just “listening” and reacting to needs but anticipating and developing novel solutions and services to existing and emerging needs. Unfortunately most large bureaucracies don’t innovate well, due to a number of constraints and attitudes. Our state government and its many agencies and departments should be creating a number of concurrent pilots and trials of new programs and services, to anticipate citizen needs and expectations. Another problem is that most governments operate on a year by year basis, with little “R&D” over a three or five year period. Therefore they rarely build new capabilities for solutions in the future, and rarely investigate the future effectively. These skills and capabilities need to improve for government to innovate effectively.
Jeffrey: Great points from one of the smartest (and I’d include my collaborators on this blog at New Kind in that mix) innovation thinkers I’ve met (see his blog for regularly impressive insights), especially the point about finding a way to get government to be more proactively innovative, anticipating what people will need.
I think government has a huge challenge in “institutionalizing” innovation (the equivalent of catching lightning in a bottle?).
How do we make innovation part of government culture? Is there any secret sauce?
Jeffery I beg to differ on the complacency of the music industry. What set the stage for the I-pod revolution was the file sharing services like Napster. The music companies reacted with fury, slamming them with lawsuits. The I-pod was not that innovative conceptually, its antecedent was the Walkman, developed by Sony in the 1980s. What made the I-pod such a success was that earlier the Walkman had shown, people like to have personalized music. Apple’s accomplishment was adapting digital technologies, widely available with brilliant design and marketing.
Back to the music companies, what they reacted to was the undermining of the ‘metered’ system of royalties, ASCAP/BMI, mechanical, performance rights and others. They have adapted, but due to the splintered nature of digital personal music, the radio/airplay/ Billboard,model that produced multi-platinum acts like Van Halen, Nirvanna and others will largely be replaced by a flatter, broader model that will encourage the growth of small music labels and the gradual demise of BMG, Warner Bros. This has important implications for the Alternative Energy marketspace, as energy is another metered market. When solar, biomass, and other non metered energy sources come to market. Will government stand with the old guard energy companies, like they did with the record companies, or will they resist the reactionary self interest of the older energy market. Judging by recent events, they will side against innovation, to preserve the status quo
My work colleagues and I have set-up a NG3 (Next generation government and goverance) forum. My European colleagues have drafted this document to reflect the aspiration of how to change the EU to create the conditions for innovation…I thought this was worth sharing…more to follow
Reinventing Europe through innovation
- From a knowledge society to an innovation society
Innovation has been central EU priority over the last decade, debated by European leaders and backed by numerous strategies, funding programmes and assessments. But Europe has not achieved its goal of being the most competitive knowledge economy. Europe is not investing enough or effectively in the infrastructures, competences and creativity needed for 21st century innovation. Public support to innovation is organised around incumbents through complex, slow and uncoordinated programmes. Private finance goes to the same low risk investments. People, entrepreneurs and companies with radical ideas find limited support and numerous barriers. Broader public policy and public services take little or no account of innovation or the power of innovation to transform society. The current economic situation only amplifies these weaknesses and makes radical change the more urgent.
The European flag needs a new star – the seastar – to create an innovation policy which is decentralised, self replicating, and connected, and which builds on the unique diversity of an enlarged Union in an increasingly competitive and globalised world. We will call on European policy makers – the European Institutions, national and regional governments – to radically transform policies along five major orientations with bold actions. But first we share our ideas with you to provoke open debate and ask what is important for you.
1. Broaden the concept of innovation
– From business to social innovation
Business innovates for private return, society must innovate for social return. Europe faces unprecedented internal challenges – ageing population, youth unemployment, sustainable cities; and global challenges – climate change, environmental degradation and poverty. Incremental change and business innovation alone will not succeed. Breaking the mould requires collaborative, cross cutting responses encompassing business, public policies, research, education and training, public services, finance and NGOs. It requires experimentation, engaging citizens as co-creators, and the ability to turn promising ideas to scale at the level of cities, regions and the EU and global markets.
Europe has strong traditions in social innovation but now lags behind. The next 10 years requires as much attention to developing a social innovation system as in the last 20 years on developing the R&D based innovation system. We propose:
Base EU action around compelling social challenges, such as chronic disease, ageing, climate change, environmental protection, and unemployment, each with stretching targets.
Finance social innovation funds, through a new partnership between the European Commission and European Investment Fund.
Incentivise large scale community level innovations, through the EU structural funds and a major EU award for localities with the most innovative solutions to societal challenges.
Transform the public sector, by dedicating one percent of all public departmental budgets in every EU country to innovation, and specific EU support for platforms and mechanisms for trans-national transfer and scale up.
Engage the young and old: in projects and networks to support innovation, entrepreneurship and research, and provide role models for elderpreneurship.
2. Invest in future infrastructures and unlock their potential
– From bridges to fibre optic, from control to open access
Europe is still putting its infrastructure investments in 19th and 20th centuries. Broadband is not simply a communication line but a social infrastructure that is a pre-requisite for future innovation. High speed broadband is not just for faster content, but will enable next generation internet, radical new services (e.g. telemedicine) and business models, and transforming how people work and live. The 20th century electricity grid is not fit for the green economy, for renewable energy, for electric transport, for zero emission homes, for intelligent energy management. But simply investing in the infrastructure is not enough, its potential must be unlocked with the new applications, solutions and activities.
Current economic stimulus packages will mean the EU falling behind the US and Asia in these critical infrastructures. Fragmented, monopolistic markets block change and EU level solutions. The EU has Technology Platform and R&D on smart grids, but no policy follow through. We propose:
Every household, business and public building to be fibre enabled, with ambitious EU targets for speed and completion dates for universal access.
The EU to be the first to implement a smart grid with every household connected and common standards and interoperability across the EU.
Combine infrastructure projects with innovation projects and activities that exploit the infrastructure, including in the Structural Funds and recovery packages.
Stimulate infrastructure for emerging technologies, with more world class hubs in Europe that are based on multi-disciplinarity, multiple partners and open access across Europe.
3. Innovative financing models
– From incumbents to new entrants; from public vs private to public private partnerships
The finance system is not fit for innovation. Both public and private financing is directed to incumbents in mature industries. Yet these are precisely the companies that block radical innovations that could undermine their current business. The existing support for innovative companies (grants, seed, venture capital, loan guarantees) is fragmented with poor understanding of how different instruments can be combined to unlock growth. There is no pan-European risk capital market, meaning European funds lack size and expertise, and companies’ lack growth financing. Ideas and intellectual property developed by small companies and universities is typically undervalued and underutilised. The venture capital model has shown its limitations, venture investments in Europe risk being lost unless current business models can be rapidly reinvented. Without this, the pipeline of innovative companies and talent will be dry for the coming economic upturn.
Europe needs a radical new approach to financing innovation, which transforms the low risk mentality of governments, private finance and companies. This means new partnerships to share risk, better harnessing the knowledge and skills of entrepreneurs and companies, and more intelligent ways to combine funding on a transnational basis. Innovation should be core to financial institutions, with the European Investment Bank (EIB) becoming a European Innovation Bank. We propose:
A major development of the European Investment Fund (EIF), in partnership with the EIB and European Commission with a mandate to create new models to fund trans-national partnerships, corporate venturing and societal innovation funds.
Accelerate pan-European venture capital funds, as a new role for the expanded EIF, to create funds with the critical mass of resources and expertise to operate on a trans-national basis funds and specialised in future growth markets.
Create an EU market for trading Intellectual Property, allowing universities and small companies to find better partners and fairer prices for their IP and access to unused IP of large players.
4. New places for new collaborations
– From closed processes to the power of networks
Innovation feeds on collaboration, the combination and clash of different ideas, perspectives and experiences. The closed laboratories, universities, research institutes, art schools, corporations, public administrations, professions are no longer a viable for innovation. Information technologies are transforming how people interact, notwithstanding the necessity of physical space and meetings. Europe has made great strides in building science parks, incubators, research networks and educational exchanges. But innovation goes much wider, and requires new players, configurations and combinations. New roles and skills are needed to sensor and bring together the right actors globally and broker collaboration.
Some places are showing the way forward. A Helsinki Design Lab is being established between the city, the innovation agency, companies and citizen groups to bring together design, technology and users in innovation projects. Barcelona, London, Amsterdam and others are developing similar innovation labs. To accelerate this process we propose:
Create and network innovation labs, with localities creating spaces to enable interaction between large and small companies, low tech and high tech, arts and technology, public and private, supported by recognition and networking at European level.
Reinforce the role of intermediaries, to act as brokers between disciplines and sectors between countries.
Stimulate universities to be open, reforming incentive and performance systems to encourage new collaborations and innovation.
5. Speed and synchronisation
– From fragmented bureaucracies to flexible partnerships, from better regulation to pro-innovation regulation
Speed is everything in innovation. Europe’s current structures and institutions respond too slowly meaning that ideas generated in Europe are developed by others. This is even more essential for the social innovations to address climate change, ageing and other major challenges, which require coherent policy and actions across countries and actors.
The creation of a single market was a driving force for European integration over the last 20 years. This must be extended to innovation, with EU regulations – for products, services, public procurement – that both drive innovation and are synchronised with the innovation cycle. This also means synchronising funding programmes and innovation support, with development of standards, public procurement and regulations. We propose:
Large European initiatives targeted on big challenges, engaging actors across the innovation chain, coordinating supply and demand of innovations, and creating real public sector reform.
Change public procurement to support innovation, including the processes and practice and setting aside a part of public tenders specifically for innovation.
Open up government owned data requiring data to be published in web-enabled formats, to allow new combinations and empower citizens to co-create new services.