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The purpose of the Innovation that Matters report, published by 1776 in partnership with the U.S. Chamber of Commerce, is to share best practices for developing civic startup ecosystems from local communities in order to provide a framework that city leaders can utilize to foster new innovations that improve the lives of local citizens.
The report studies the state of civic entrepreneurship in eight U.S. cities: Austin, Boston, Chicago, Detroit, New Orleans, New York, San Francisco, and Washington, D.C.
Donna Harris, co-founder of 1776, states that:
What we found was a strong confirmation of our original thesis. We confirmed that the “secret sauce’ of ecosystem development lies in the creation of effective networks that bring together broad arrays of stakeholders within an industry; facilitate open exchange of ideas; and bridge cultural gaps between different groups to promote effective collaboration. Furthermore, we found that despite the supposedly unique nature of each of the industries that we studied within the civic sector’”education, energy, health, and cities’”all four share a common set of opportunities, challenges, and solutions for growing their startup ecosystems in ways that separate these industries from the traditional tech sector.
The Civic Entrepreneurial Ecosystem
The Civic Entrepreneurial Ecosystem consists of five elements:
- The Network Effect: The underlying goal is to build an open, fluid, and dynamic network that helps startups make the connections they need to succeed and links different groups, both hyper-locally and hyper-globally.
- The Triangle of Civic Entrepreneurship: The main protagonists in this network are the Entrepreneurs, Civic Institutions, and Citizens, whose three-way interactions define the ecosystem and form what we term the Triangle of Civic Entrepreneurship.
- The Supporting Roles: There are several supporting actors who provide direct help to entrepreneurs: investors, advisers, established companies, universities, professional services (accounting, legal, real estate), and cheerleaders (associations and business groups, bloggers, event organizers). Building successful businesses requires help from all of these groups; startups cannot achieve their goals by going at it alone.
- The Platform: There is also a basic platform of broader environmental building blocks’”an accommodating regulatory environment, quality of life, creative thinking, and density’”that the network needs in order to flourish.
- From V1.0 to V2.0: Once these network conditions have been met, creating a robust ecosystem requires a second, more direct layer of intervention. Community members should actively identify company stages and determine the best ways to empower entrepreneurs to overcome the unique hurdles they face at each stage.
Civic Entrepreneurship Index
In order to have an objective look at how far each city has come in creating its ecosystem, 1776 create the “Civic Entrepreneurship Index’ by compiling 45 metrics from various databases and reports and combining them with a survey of 230 civic tech entrepreneurs. The index, which assesses the progress to date of the local community in a variety of areas, featured five categories:
- Leadership: Influence of Serial Entrepreneurs
- Institutional and Corporate Support: Influence of Civic Institutions (Schools, Hospitals, Utilities, Government Agencies) and ԬCorporations
- Capital: Influence of Angel and Venture Capital Investors
- Talent: Influence of Workforce
- Community Support Structures: Influence of Support Organizations and Startup Peers
Based on their stage of development, cities were classified as nascent, emerging, established, or leading.
Analyzing the overall results of the index led to the following key findings:
- Network Connectivity is the “Secret Sauce’ Driving Ecosystem Growth
- Each City is Making Progress Toward Establishing a Civic Entrepreneurship Ecosystem
- Institutional and Corporate Support is Still a Somewhat Untapped Resource
Opportunities, Challenge and Guiding Principles
The report identifies the key factors that are creating change in today’ s civic entrepreneurship landscape and barriers to promoting successful entrepreneurial innovation in the civic sector. It also presents five broad guiding principles that can help local community leaders’”serial entrepreneurs, government officials, foundations, business associations, and others’”to think about how to approach the task of fostering more innovation that matters:
- Establish System Connectivity: Connect the dots between ecosystem actors to address The Alignment Gap and create a collaborative community.
- Embrace the Friction: Allow conflict and competition to flourish in the ecosystem as a necessary complement to collaboration, in order to create more effective and dynamic solutions.
- Build the Market: Open opportunities for startups to propose and create new solutions to existing needs of civic institutions Ԭthrough problem-focused challenges and programs to promote prototyping.
- Turn the Lights On: Partner with startups to construct datasets and create information that reveals what already is happening within civic institutions.
- Unlock Hidden Capital: Build mechanisms to better channel communities’ existing wealth toward startup activity.