REPORT Innovation That Matters How City Networks Drive Civic Entrepreneurship May 15, 2015 Author Editors Patrick McAnaney Rich Cooper Morgan Gress Contributors Erin Klem Michael Hendrix Tim Lemke Malavika Kesavan Margaret Shepard Melissa Steffan Brought to you by Acknowledgements The author and contributors would like to thank all the roundtable participants who devoted their time to take part in the Innovation that Matters listening tour. We also thank our local partners for helping to organize the event, including 1871 in Chicago; NYU Polytechnic School of Engineering in New York; Capital Factory and the Austin Chamber of Commerce in Austin; Microsoft in Boston; RocketSpace in San Francisco; Grand Circus in Detroit; and the New Orleans Business Alliance and Idea Village in New Orleans. We would also like to recognize the support of Microsoft CityNext for sponsoring the roundtable events and Brunswick Insights for conducting the Innovation that Matters survey. Finally, we thank Atlantic Media Strategies for their contribution to the design and production of the report. INNOVATION THAT MATTERS ii Contents TERMINOLOGY .................................................................................................................................VII EXECUTIVE SUMMARY ........................................................................................................................1 INTRODUCTION ................................................................................................................................. 7 THE FRAMEWORK: THE CIVIC ENTREPRENEURIAL ECOSYSTEM ........................................................ 11 The Network Effect .......................................................................................................................................................................................................................11 The Triangle of Civic Entrepreneurship ..............................................................................................................................................................................13 The Supporting Roles .................................................................................................................................................................................................................16 The Platform—Environmental Building Blocks ...............................................................................................................................................................18 From V1.0 to V2.0—Creating Conditions vs. Active Empowerment .......................................................................................................................21 CIVIC ENTREPRENEURSHIP INDEX ..................................................................................................25 Overview ..........................................................................................................................................................................................................................................25 Key Findings ...................................................................................................................................................................................................................................26 Results .............................................................................................................................................................................................................................................29 CITY FINDINGS ................................................................................................................................33 Austin ................................................................................................................................................................................................................................................33 Boston ..............................................................................................................................................................................................................................................35 Chicago ............................................................................................................................................................................................................................................37 Detroit ...............................................................................................................................................................................................................................................39 New Orleans ....................................................................................................................................................................................................................................41 New York ..........................................................................................................................................................................................................................................43 San Francisco ...............................................................................................................................................................................................................................45 Washington, D.C. ...........................................................................................................................................................................................................................47 LISTENING TOUR INSIGHTS .............................................................................................................49 Opportunities.................................................................................................................................................................................................................................50 The Asset Base .................................................................................................................................................................................................51 The Evolving Civic Sector ..............................................................................................................................................................................53 iii INNOVATION THAT MATTERS The Disruptive Urgency .................................................................................................................................................................................55 The Citizen Engagement Factor ....................................................................................................................................................................57 The Dual Paths: Partner or Circumvent ......................................................................................................................................................59 Challenges .......................................................................................................................................................................................................................................61 The Alignment Gap ..........................................................................................................................................................................................62 The Bureaucratic Maze ..................................................................................................................................................................................64 The Credibility Dilemma.................................................................................................................................................................................69 The Risk Disincentives ....................................................................................................................................................................................71 The Noise Factor ...............................................................................................................................................................................................74 Solutions ..........................................................................................................................................................................................................................................75 Establish System Connectivity .....................................................................................................................................................................76 Embrace the Friction.......................................................................................................................................................................................86 Build the Market...............................................................................................................................................................................................90 Turn the Lights On ............................................................................................................................................................................................94 Unlock Hidden Capital ....................................................................................................................................................................................98