Any future for Government driven innovation?

Stefan Lindegaard / Author and Consultant / 2015-03-24

During the 20th century Governments and public agencies such as NASA played a major role in the innovation chain. The Internet itself was born through public programs, just as GPS and many other game-changing technologies. But in recent years, questions arose over the efficiency of public efforts, challenged by smart, dynamic, powerful corporations such as Google, on the one hand, or bottom-up and open source models, on the other hand. Are Governments out of the game?

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ParisTech Review – During the 20th century Governments and public agencies such as NASA played a major role in the innovation chain. But in recent years, questions arose over the efficiency of public efforts. Are Governments out of the game?

Stefan Lindegaard – Definitely not, but their role has changed. The greatest challenge comes from the growing importance of open innovation. It is also an issue for large corporate companies: while GE proved successful in reinventing itself as the center of an innovators network, many big companies find it difficult to “let go” and adapt themselves to horizontal, cooperative processes. It’s a question of culture, and Governments are facing the same question. Government driven innovation used to be (and tends to be) centralized, monitored, top-down – and this was perfectly appropriate for large strategic programs such as nuclear energy or space travel. But dealing with the dynamics of open innovation is another story. Compared to vibrant ecosystems or free, cooperative, open communities, government entities may be handicapped by their bureaucratic habits. Open innovation requires the Government to enter a new culture and reinvent its role.

What could be this role?

I don’t wish to be too prescriptive, but if we observe what is going on we can identify trends.

A good example is Challenges.gov, a platform launched by the Obama Administration a few years ago as a partnership between the public and the government to solve big, tough problems. The platform provides a central, online space for US federal agencies to post challenges, and at the same time, allows the public to find federal challenges. Practically, the platform works as a collection of challenge and prize competitions, all of which are run by the various agencies across federal government. These include technical, scientific, ideation, and creative competitions where the government seeks innovative solutions from the public, bringing the best ideas and talent together to solve mission-centric problems. The first challenges went from astronaut gloves to blocking robocalls, and the platform has been used to develop broader programs, such as drone applications.

This innovation crowdsourcing suggests a new, somehow more modest role for the government’s: providing incentives. Still, the very idea of a public strategy is not out of the way. But there is a reversal in the manner it is implemented. The government, here, does not set up plans and control their execution: it sets up a challenge and encourages innovators (individuals, companies) to work on it.

What of funding?

Finding capital is not so difficult nowadays and I’m not sure government should spend public money and transform itself into a business angel. But it definitely has a role to play.

First of all, the government should work on the best possible conditions for bringing together entrepreneurship and innovation. Its role is that of a facilitator. It includes training, setting up a favorable fiscal environment… But that is quite mundane: one can think of another, more active role.

What is the key issue for innovative companies? They need customers. They need a market. Creating a market is probably the best way to stimulate the development of an ecosystem. It’s better for the government to be a customer than an investor. The outcomes are better, since as a customer the government can think along its own needs, and competition may allow for cheaper prices and higher quality.

Another point is that money is not the only issue. Instead of funding innovative companies or industries, what about feeding them? For instance, you can feed them with data. Public data have great potential value for almost no cost. Governments can use this (almost) free public value and offer it for free, thus pouring an inflow of value into the economy. Opening public data doesn’t cost much and the rewards are big for the economy, the society at large – and the government. This is an investment!

One could also think of another role: that of a regulator, in charge of protecting small players against big ones.

Sure, but the risk is to slow down everyone. Wouldn’t it be smarter to encourage the big ones to innovate and to share some of their resources with small players? I’m not only thinking of corporate venturing, but more broadly of open innovation. Governments have made lots of efforts to develop and encourage startup ecosystems, through quite stimulating programs. Think of StartUpChile: the program assigns a USD$ 40k grant per project, a one-year resident visa to all the team members specified on the application, as well as a nice and comfortable workspace (desk & wifi) that you will share with entrepreneurs from over 60 countries. Very nice indeed. But one thing that I would suggest though is that the organizers start to look at how they can incorporate more established companies into a program. If Chile really wants to create a thriving innovation and entrepreneurship hub, then they need to tap into the innovation dynamics of big and small companies. This is a key challenge. Government can play the role of a gatekeeper here: it can make its mission to influence the big companies and encourage them to join some of the clusters, as well as to help small companies join clusters already including big players. In any case, local and national governments do have to play the role of an organizer. This is also a way to better connect public research and the business community.

One thing about clusters is that they are not necessarily physical. One can also think of virtual clusters – communities, platforms, networks. Though Governments have not been very active here, they may join the movement.

The idea of managing innovation is getting momentum, and Governments are no less entitled to do it than, say, big corporations. An important point here is that the very idea of innovation is evolving. Not so long ago creativity was an important part of any innovation discussion. You could not really separate the two terms. Today, they are separated, for innovation is no longer viewed as just a creativity effort. It has become a management discipline and as such this is more about strategy, structure, processes and culture than creativity. Innovation still requires a lot of creativity, of course, and the future winners of innovation know how and when to be creative during an otherwise structured process. But we should no longer confuse creativity with innovation.

Still, from all what you told us, governments have to redefine themselves in their role as innovation drivers and as innovation managers. Should we evoke a new culture?

Definitely. Though some of its elements are not new their combination is radically new and it can prove difficult to find the right balance. Besides, every ecosystem is different and the government’s position can’t be the same. It’s a matter of experience, of really understanding how innovation works.

Right now we are – governments are – in the process of learning, of developing methods. Public agencies, local authorities and universities are developing new competences, such as working with a greater variety of partners or dealing with the unknown – since when you challenge a community instead of managing public procurement you just don’t know what is going to come out of the experience.

This requires new communication skills: in this new environment, perception, for instance, is just as important as proof. Decision-making should be refined and include different stakeholders. The very profile of the public officers in charge of managing innovation programs should include broader experience. What we need here is people at ease with the very idea of experimenting; people understanding and accepting that they can’t control things; people with a different sense of timing, able to deal with both the slow pace of public decision and the staccato rhythm of techies.

So, yes, this is a new culture we are talking of. But it is also a competition, and a fierce one.

The Obama Administration, in the President’s first mandate, seemed to outrun its competitors. Is the US Government still leading the race?

It has been five years since President Obama named Aneesh Chopra as the first CTO of the United States. It has been four years since the US government launchedChallenge.gov as a platform for the government offices in the United States to drive innovation and collaboration with its citizens. They were great initiatives, but not much has happened since then.

Besides, in some small countries such as Singapore or, surprisingly, the Emirates, some interesting initiatives have been taken. Think of Emirates eGovernment, for instance, which is actively involved in projects promoting the use of eServices and IT tools by the federal government entities and the public. This program is not only about delivering services, but about using social media tools to communicate with their clients and public and engage them in designing and delivering government programs and services.

Singapore offers a different example. The country has a successful story of national economic strategies, moving from textile to electronics, then to biotech, with the right timing, and all these decisions have been made through a highly centralized decision process. What is happening now is a switch: the Infocomm Development Authority of Singapore (IDA) recently launched its IDA Labs initiative, whose aim is to help build Singapore tech innovation that can serve global markets. It is not any longer a centralized process, but the very idea of a creative community driven by open source. IDA Labs provide spaces for the community, enterprises and government to collaboratively come up with new ideas and technologies.

Just as it is in the private sector, governments must continuously reinvent themselves and their approaches and given the lack of new bold initiatives from the United States government, I am now wondering who will take the lead on government driven innovation.

And the winner should be…?

To me, the existence of an existing (strong) platform for government driven innovation remains a must. But it is not enough. I think the future winner will originate from a country that has the some fundamental elements in place.

A culture of innovation, first: I mean, a high level understanding of innovation and more importantly the willingness to continue to experiment with the processes themselves. This also means an understanding on the highest level that you can’t control things; you can only create the right frameworks and conditions needed for things to happen. I should add that the need for control must be balanced with the need for letting things flow freely – often from the bottom up.

Second, a notion of time: more specifically, a sense of urgency that breaks the “business as usual” thinking that is too often associated with the public sector.

Third, a certain way of working, especially a strong understanding of how communication works. The winner will prove able to create a methodology and concept that can be applied within many government entities – and perhaps even outside their own country.

Fourth, human resources: an educational program should be targeted towards the specific needs of government employees. But since we are talking of open innovation, it is not enough to train people. The future world-class government innovator will need to develop an ability to merge internal resources with external partners – locally as well as internationally.