Engaging Entrepreneurs to Solve Urban Problems
by Steven Goldsmith, Professor of Practice at the Harvard Kennedy School and Director of the Innovations in American Government Program. This article originally appeared on Governing.com on April 7, 2016.
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Too often, innovative ideas in the public sector never see the light of day due to regulations and oversight designed for a different era. While procurement regulations are intended to ensure accountability and minimize risk, the process leaves little room for experimentation or creative engagement with entrepreneurs. Philadelphia's FastFWD initiative tackled these challenges directly by opening up new mechanisms for entrepreneurs to co-create solutions with the city.
FastFWD, an initiative of former mayor Michael Nutter's administration, was a winner of the 2012-2013 Bloomberg Philanthropies Mayors Challenge, a competition that encourages cities to generate innovative ideas that solve major problems and improve city life -- and have the potential to spread to other cities. FastFWD used a business accelerator to connect interested entrepreneurs with staff from eight city departments for collaborative thinking and development. The initiative resulted in nine pilot projects, and two full contracts, with positive public-safety impact.
With FastFWD's problem-based procurement model, the city chose public safety and community stability as focus areas and invited open solutions to those problems. The accelerator graduates took a wide variety of approaches, ranging from Textizen's text-messaging-based outreach tools to Edovo's work to provide tablet-based education opportunities to jail inmates. Textizen's pilot work with the Mayor's Office of Reintegration Services has improved re-entry meeting attendance by 40 percent. The Edovo pilot enabled more than 500 inmates to complete 2,100 online educational courses in the first year of its work with Philadelphia's Department of Corrections. Brian Hill, the CEO of Edovo, credits FastFWD with his company's success: "There is absolutely no question that our ability to pilot in Philadelphia allowed us to exist and succeed today."
As part of its overall procurement-reform effort, the city streamlined and codified its procurement process for pilot projects, shortening the amount of paperwork required for a typical RFP from 47 pages to 18. The city also plans to pilot an open online registry with which innovators and entrepreneurs can share both pilot ideas and successes from pilot projects. A partnership with CityMart, a Barcelona-based procurement company, will enable Philadelphia to continue its problem-based procurements, with five more planned in the coming year to address a range of important urban problems. The FastFWD procurement effort also inspired open-source improvements to Big Ideas, the website through which the city procures innovative IT projects.
Based on my observation of the project's development over the past two years, key themes for success emerge with broader applicability to other cities:
• Use risk-ready funding to lower barriers to entry for city experimentation. Because grant funding supported the pilots, the city was able to accept a much greater level of risk than it could have with budgeted department funds. The pilot funding allowed the FastFWD companies to demonstrate proof of concept; as a result, several of the pilots are going to full contract at department cost.
• Organize supportive local partnerships. The city was able to leverage the areas of expertise of local partners throughout the FastFWD project, with a substantial investment of many local discounted, low-cost and pro-bono resources. A local business accelerator ran a modified version of its curriculum for FastFWD participants. The Wharton School of the University of Pennsylvania conducted market research to identify city priority areas that also had a large market opportunity for entrepreneurs.
• Start procurement innovation with a change of mindset. The city conducted much broader outreach for FastFWD than for a typical procurement project and attracted a very competitive pool of applications from 137 companies around the world. "The team framed the RFP process as a robust campaign to seek out new types of partners and to attract more than just frequent-flyer vendors," said Todd Baylson, Philadelphia's technology procurement advocate. "Rather than just post in the usual places, they posted in the forums where startup companies look for opportunities, and held outreach events at coworking spaces and untraditional venues."
• Work across agency boundaries to help focus procurements on solutions. As part of FastFWD, the city established a cross-agency procurement working group. Andrew Buss, the city's director of innovation management, said the group "really raised the issue of procurement and the need for procurement reform to more stakeholders within the city. It is at a level of conversation within city government that it wasn't before." The project also paired entrepreneurs with agencies across the city to work on areas of common concern.
Although Mayor Nutter has since left office and the FastFWD pilot is complete, the new administration is continuing to address procurement reform. Earlier this month, Nutter's mayoral successor, Jim Kenney, issued a request for proposals for a "reverse auction" bidding system, which enables bidding to continue until vendors reach the lowest price. He also appointed a new chief administrative officer to oversee administrative functions, including procurement.
Procurement-reform projects in government are seldom without challenges, but with persistence success is possible. As Story Bellows, former director of FastFWD and the Mayor's Office of New Urban Mechanics, reflected, "We proved that there are a lot of great ideas out there that are not coming from traditional problem-solvers. Opening up our problem sets to a wider variety of actors resulted in innovative solutions for the city."
Read more from Stephen Goldsmith on Governing.com.