Government as a Catalyst: Prizes for Tech Innovation

At this year’s South by South West Interactive (SXSWi) conference, I’m pleased to be moderating a panel on the role of government and prizes in stimulating technology innovation and providing public services. Federal agencies have recently been given the authority by Congress to sponsor competitions for individuals, groups, and companies to develop new ideas and technology innovations for a chance to win potentially lucrative prizes. These competitions can range from new mobile outreach technologies to web-based data analytics tools to even vehicle-to-vehicle communications; the government is looking for breakthrough technologies from the minds of the most creative and forward thinking Americans.

The panel will highlight some of the coolest prizes for technology development that the government has been involved in to date, including the DOT’s Connected Vehicle Challenge, the VA’s industry competition and blue button projects, and NASA’s centennial challenges. Additionally we will explore what role the government should be playing in these activities moving forward by looking at some prizes where the government did not have a role.

Here’s a sneak preview about what you’ll hear if you come spend an hour with us. We believe prizes matter for many reasons, but we’ll focus on four during the session:

1. They work. How can we be so sure? You’ll hear about a series of prizes from NASA, VA, and DOT that demonstrate the value of government sponsored prizes.
2. They complement other innovation methods. There are many ways to stimulate technology development and many actors are involved in doing so. It doesn’t happen very often however that government gets a BRAND NEW way to stimulate innovation—and prizes are just that. Prizes are a new way for government to stimulate technology development that compliments other, traditional methods for innovation. We’ll give some interesting examples of where prizes work with other innovation methods in government to create some really cool results.
3. They're becoming a way of doing business. If government is spending money and doing business this way, entrepreneurs and industry alike should be paying attention. Imagine a world where as much money flows through an organization through prizes as it does through contracts. Now that’s big business.
4. They're exposing different roles for Government. Government does not always need to have a role for prizes to work however. The question no longer is CAN government have a role, but SHOULD they. The private sector is increasingly involved in activities that affect the public good and people WANT to get engaged in the public good. We believe this may create room for the public sector to disengage or interesting public-private partnerships to form. We’ll talk about some instances where this is happening.

Our impressive lineup of panelists includes Chris Gerty from NASA (@gerty), Mari Kuraishi from Global Giving (@mashenka), Michael O'Neill from the U.S. Veteran's Administration (@mdoneill), James Pol from the US Department of Transportation (@polgmu), and me as your humble moderator (@jenngustetic). The panel is on Tuesday March 13 at 11AM at the AT&T Conference Hotel—if you can join us, let us know through Plancast. Alternatively, we’ll also be tweeting and you can follow our session at #SXTechPrize live during the session.

Have questions for the panelists? Let me know and I’ll make sure to ask them for you if you send in advance.

Hope to see you there!

Jenn

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Why Innovators Should be Paying Attention to Prizes

Innovators—including government innovators—should be paying attention to prizes because they work, because they add another tool to their innovation tool belt, and because they are already being used by a typical late adopter—the government. I’ve been a student of prizes and competitions in government for several years now—there is always something to learn: a new success story, an understanding of new enabling legislation, a new prize structure you’ve never seen before, etc. It’s a fascinating field because every prize is different: if you’ve seen one prize… you’ve only seen one prize.

So why do prizes, in fact, matter? Why should the next generation of leaders be thinking about them? Bottom line: they work. (Check out the Prezi I created for a recent lecture I gave at MIT on this topic for more details on the assertions and examples below)

Before I dive into some examples of how they’ve been proven to work though, it’s important to set context: I’m not only referring to app contests and video competitions, which can be great introductions to Agencies about the process for conducting a prize, but more importantly prizes that are specifically designed to solve root cause issues that have been pervasive in their sector for some time.

Often government is a very late adopter of new tools, technologies or approaches, but that’s not the case when it comes to prizes. Prizes are resulting in real value and tangible technology innovations. And there’s not just one example—the list of success stories is growing every day. For example, prizes have brought real solutions to bear for many sticky problems, including:

Transportation Energy Efficiency: This October, NASA awarded the first place prize of $1,350,000 in the Green Flight Challenge sponsored by Google to Pipistrel-USA.com of State College, PA, and second place prize of $120,000 to eGenius of Ramona, CA. The winning teams, which were both electric powered, shattered the fuel efficiency requirement by achieving about twice the required 200 passenger miles per gallon.

Energy Efficiency: The first L Prize (a prize sponsored by the Department of Energy) category targets the 60-watt bulb because it is one of the most widely used types of light bulbs by consumers, representing roughly half of the domestic incandescent light bulb market. As the first entrant in the 60-watt category to successfully meet the full competition requirements in Fall 2011, Philips Lighting will receive a $10 million cash prize as well as L Prize partner promotions and incentives.

International Development: The Gates Foundation and USAID have partnered for the Haiti Mobile Money Initiative (HMMI), a $10 million incentive fund to jumpstart financial services by mobile phone in Haiti and expedite the delivery of cash assistance to victims of the country’s devastating earthquake by humanitarian agencies. This initiative lays the foundation for advanced banking services that could help millions of Haitians lift themselves out of extreme poverty. In January of this year, Haitian mobile operator Digicel won a $2.5 million award for being the first to launch a mobile money service in Haiti, Tcho Tcho Mobile, that meets the competition’s stringent criteria. The second operator to launch a mobile money service within 12 months will receive $1.5 million. Another $6 million will be awarded as the first 5 million transactions take place, divided accordingly among those that contributed to the total number of transactions.

The fact that prizes have been shown to incentivize the creation of new and innovative solutions, when designed and executed properly, means that innovators should be paying attention to them.

We have to keep in mind that each prize is unique because of incentives, solvers, structural designs, and sequencing required to solve the problem at hand are each unique. And because there’s no formula to do them correctly they are very hard to teach (though folks like McKinsey, Jaison Morgan, the General Services Administration, Tom Kalil, Peter Diamandis, Karim Lakhaniand others have published great information about what makes them tick). The truth is, there are many flavors of prizes that each have their own unique benefits and drawbacks. An understanding of different prize types is a huge resource to add to your innovation tool belt. Actually, I think it’s an innovator’s responsibility to understand them.

A large case for the value of prizes can be made but I can’t neglect to mention that there are also naysayers. Prizes are one tool in a rather large tool belt to stimulate innovation. Grants, contracts, loans, concessions, public private partnerships, and a host of other tactics can also be applied as appropriate. Given this context, questions about prizes as a legitimate government procurement mechanism have been raised and others feel like prizes can be seen as a “waste of taxpayer dollars” when the government is footing the bill. Personally, I think a debate on this issue is very healthy.

So what do you think? Has enough of a business case been made to get more innovators thinking about using prizes? Or are there areas of study and concrete examples that still need to be explored? What would help you make the best case for adding prizes to your “innovator toolkit”?

As always, if you have any questions feel free to reach out to me at @jenngustetic.

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Can the US Government Use Open Innovation to Save $1 Billion?

“Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.” President Obama, January 26, 2011

The budget crunch is currently consuming all parts of government. CFOs and other executives are searching for ways to deliver their mission at reduced budgets—to do “more with less”. Many programs and services are required by law to exist, so budget cuts aren’t as easy as they may seem; the government will still need to provide a level of service and degree of public value to meet their statutory responsibilities despite less money to do so. Thus the need for innovation—both static (doing what we do today better) and dynamic (doing completely new things that didn’t exist before)—is of paramount importance. This post will explore how the forthcoming Open Innovation Strategy from the White House may (or may not) help focus the power of innovation on the budget woes of the United States to realize enormous budget savings and increase public value.

From Open Government to Open Innovation…

As I wrote last year, “Open Government is not dead (sorry Vivek). Open Government initiatives are only part of what is required to cultivate an innovative agency culture. They are an important part of a much larger innovation ecosystem, but only one part nonetheless. To cultivate a culture of innovation, the broader picture of what “innovation” means to the Federal Government is critical to understand.” Thus, especially in this budget environment, it’s refreshing to see the conversation about open government being reframed to “open innovation” at the White House.

On Friday, June 10th, CTO Aneesh Chopra and CIO Vivek Kundra as well as other Administration officials, hosted an Open Innovation / Champions of Change event at the White House where, among other things, they previewed the President’s forthcoming Open Innovation Strategy. There were many interesting takeaways from the event but this post will focus on “previewing” Open Innovation and what this new strategy might mean in this era of reduced budgets. (For additional press coverage see White House Honors Unsung Open Data App Developers from Government Technology).

In his opening remarks, Aneesh described the White House’s soon to be released Open Innovation Strategy as integrating the principles of open government and innovation work previously done by the administration. In short,

Strategy for American Innovation + The Open Government Directive = Open Innovation

He outlined the following principles of Open Innovation:

• “Innovation should help the government spend money smarter
• Innovation should improve customer service and get the government to where the people are
• Innovation should be integrated in delivering new and old products and services
• Innovation isn’t just about the outcomes, it’s about the process”

Furthermore, he identified four key policy levers for open innovation and some examples where they are already working in government:

• Democratize government data: For example, the USPTO has partnered with Google at no-cost to provide access to a 3+ terabyte patent database, encouraging reuse of data. This database is indexed on a clean tech marketplace to a taxonomy of 246 clean tech categories, facilitating capital investment. This green technology initiative, based on government data, connects investors to relevant IP.
• Encourage market transparency: For example, HHS has created a catalogue of public and private insurance plans that includes denial and pricing information to help people make better choices about their insurance (http://www.healthcare.gov/). This site provides transparency on price, measures on denials, and “surcharges” to ensure robust competition.
• Cultivate innovation ecosystem: One example is the DARPA “crowd designed” combat support vehicle. The winner was awarded a contract and the first was slated to be produced in June. Another interesting example occurred last year when a White House rep attended a “gaming” conference and brought a gaming company’s attention to some of the government’s open data. As a result, a new version of an EA snowboarding game will include mountains that are built from NASA’s mountain topography dataset. (Cool!)
• Create capacity for innovation: For example, VA’s “blue button” is now being replicated by Aetna and Walgreens. The government set an example/best practice that the private sector is adopting. What’s neat about blue button is that it’s spurred an autonomous co-creation environment – one that unlocks new kinds of public value for NOT ONLY veterans, but now for society as a whole.

These experiments demonstrate the open innovation has REAL potential to create public value. Thus, I’m excited for the open innovation strategy to be released in the coming months—it is a necessary next step in the evolution of open government. However, what’s NOT been articulated as clearly as it needs to be is HOW open innovation will help government spend money smarter and better partner to deliver services during a time of reduced budgets. That’s where some of the other discussion at the event comes in…

Saving money through innovation…

To me, the potential for this new strategy was articulated best by Bruce Brown, Chief Technology Officer, Proctor and Gamble (P&G), a panel member later in the event. Bruce told a concrete story about how P&G’s investment in innovation has saved P&G billions, increased shareholder value, and increased revenues. Bruce spoke about how the culture of P&G had always developed everything “inside” but there was recognition at the top that an insular approach would not maintain an innovative edge in an increasingly competitive market. So in 2003 they created the “connect and develop” open innovation program with a goal of 50% of ALL innovations having an external consultation component. This was a radical shift for their culture.

However, the shift towards looking outside seriously impacted their bottom line. For projects with an external component, shareholder value has generally doubled to tripled as compared to projects that don’t have an external component. But this new commitment did cost them some upfront investment. The shift required fundamental changes to the way the company operates, including IT systems, incentive schemes, etc. Additionally, they created an $85M corporate innovation fund to invest in new innovations. However, P&G has realized some concrete savings through these investments in innovation; through looking outside their walls for new ideas (in licensing) P&G partnered with Los Alamos labs to license reliability engineering technology,which has saved them $1B over the last few years. That’s not pocket change. This example demonstrates that open innovation can save real money.

Achieving public value through innovation…

So how can government learn from P&G’s approach to innovation and address its immediate (and long term) need to “do more with less”? If P&G’s ultimate metric is shareholder value to determine the benefit of their innovation program, how should government work to tie innovation programs to public value, the ultimate metric for government? The Center for Technology in Government at the University of Albany has been thinking through how to tie public value to open government programs. Do you think their logic could also apply to open innovation programs?

As most of us would agree, innovation isn’t only about releasing data—it’s about doing existing things better, inventing completely new high value services that make others obsolete and fundamentally rethinking how the government works with partners to provide public value. Thus, this event also got me and some colleagues (including the always brilliant Dan Morgan @dsmorgan77) thinking about how different open innovation really is from other public value optimization frameworks. Because, at the end of the day, open innovation is about producing more public value at lower cost to the government, right?

For example, take Bill Eggers and Steven Goldsmith’s book Governing by Network and Deloitte’s recent report on Creating Public Value by Releasing the Power of Cross Boundary Collaboration.Co-creation, collaboration, and leveraging networks are not new concepts—they’ve been studied extensively for years. Thus when reflecting on the forthcoming open innovation strategy, a few fundamental questions occur to me:

• Could open innovation just be as a new buzz word for more effective co-delivery and co-creation?
• Or is open innovation itself in fact a new way to co-create and collaborate to create public value?
• What makes open innovation different from the co-creation, if at all?

I hope to do a much more in-depth analysis of these differences once the strategy is released in full, soon.

Some new trends are likely coming…

What open innovation will force us all to think about is new ways for government to do business. Combined with reduced budgets that won’t support large pilot projects, the tactics we see the government using to provide services and value might shift significantly. For example, we could see several structural changes to the way the government partners:

• We could see a rise in Public Private Partnerships (PPPs) for service provision. These could both be no-cost partnerships (like the USPTO partnership highlighted above) or 30-year concession contracts for infrastructure construction (see this former posting of mine on infrastructure development PPPs)
• We could see a rise in the use of loans and leveraging instead of or in addition to grants. This may change delivery structures. A guaranteed loan isn’t the same as a grant. Loans are largely re-paid; grants aren’t.

Regardless of the structural changes, we will be forced to do more with less. Several agencies have already shown that public value can be achieved through open innovation and P&G has shown that it’s also an effective tool for budget savings. The basic question whose answer remains to be seen is: how will government leverage open innovation as part of its toolbox to create public value?

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Observations from a Judge: Three Takeaways for Federal Prizes from MIT’s Global Challenge

Over the past few weeks I had the pleasure of serving as a global judge for the MIT Global Challenge which ended in an exciting awards ceremony Monday in Cambridge, Mass. The Challenge is designed to connect students” with the passion and talent to improve the world with the experience and resources of the MIT community worldwide.” MIT views innovation and entrepreneurship as public service through this annual competition that awards up to $25,000 per team for the best ideas to tackle barriers to well being. A snapshot, borrowed from the challenge website, illustrates the structure of the challenge:

Framework for MIT Global Challenge

Through the course of judging this challenge three invaluable ideas stuck out that I think can help all of us  as we continue to explore the use of prizes in the federal government:

(1)    Team judging is a great option for the participating teams: The global challenge set up the judging process so all judges were assigned to judging teams (I was in team “Thundercats”).  Teams consist of 4-6 judges who all independently review 5 submissions and then work together to schedule interviews with the teams to clarify any outstanding questions. Furthermore, the interaction with the teams doesn’t end with those interview calls. I found that many judges wanted to stay in touch with the teams after the challenge was over and continue to mentor them to help contribute to the success of their ideas. Also, the teams I spoke with at the awards ceremony are genuinely excited to continue a relationship with their judges to help make their idea a reality—even if they weren’t a winner. My major lesson here was that in as much as prize competitions can help develop relationships between the participating teams and judges, an ongoing mentoring network can be set up organically.

(2)    Team judging is also great for the judges themselves: Working together to interview the teams was by far the most valuable part of the experience for me. Through the planning, interviewing and follow-up conversations we had, I got to know a truly phenomenal group of MIT alum that are passionate about development. Membership on my group was diverse including a doctor, a USAID innovation leader, a 3M senior engineer, and a DC-based strategy consultant. I’m excited about continuing my relationship with those folks in years to come. I learned a lot about where the cutting edge, innovative concepts at the university level for development currently are, was able to give back to my alma mater, but also developed relationships that are incredibly valuable to me as well. All the right incentives were in place for judges in my mind.

(3)    Leveraging a strong, existing network drove high participation: The MIT IDEAS Challenge relies on one major network—the MIT student and alumni network. Eligible participants are within that network, judges are within that network, and many sponsors come from that network. By focusing on a community that was vested in continuing the growth, development and health of that community, an existing incentive structure was already baked in. The result? In 20 days, 117 countries and 14,000 voters participated in the public judging process for the awards. Also, over 50 judges from across the world participated in the juried awards. A community didn’t need to be DEVELOPED for this challenge—they leveraged one that already existed. This community was primed for challenges and has responded accordingly.

Overall, I had a wonderful experience participating in the judging process. I would do it again in a heartbeat and look forward to the impact the winning teams will make in the developing world in the next year.

In addition to liveblogging the awards ceremony (see the coverage on the live site here), a couple of the teams I evaluated ended up winning several prizes; congrats to Innobox and AQUA for their great ideas!

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Happy One Year Anniversary! A Year of Progress in Open Government

Though it’s being overshadowed by the budget discussions this week, it’s important to note (and celebrate!) that today (April 7th) is the one year anniversary of Agency Open Government Plans. Just one year ago, almost 30 plans were released from cabinet-level and independent Agencies that detailed how they would become more:

• Transparent in their work;
• Participatory in seeking the ideas and expertise of citizens; and
• Collaborative in how they use new technology and processes for developing government policies.

The traditional gift for a one year marriage anniversary is paper. Ironically, that pretty well captures a lot of the effort that has happened behind the scenes at agencies for the last year. Countless hours have been spent developing government-wide and Agency-specific policies, guidance and plans—critical foundational documents to support Open Government goals. This is the work that is not as often celebrated in the press or on blogs, but its importance cannot be overstated. This work is setting the stage for an even more exciting year two.

But significant progress has been made in one year and there’s a lot to celebrate. So to honor the one year anniversary of Open Gov, I’ve listed a few examples of what the Federal Open Government community has accomplished to date in a remarkably short period of time.

There are likely many more worthy examples so please add your comments to this posting to build to the body of examples. As always, feel free to reach out to me at @jenngustetic to extend the conversation.

Transparency

In the last year we launched programs that reach citizens where they are to make government data more accessible…

Blue Button: According to the White House Innovation’s Gallery, previously “veterans could not download their personal information and share it with others – even doctors. VA has developed and installed a new feature – the Blue Button – on its online personal health portal, My HeatheVet. Veterans who have identity verified access to My HeatheVet can click a “Blue Button” on the website to download their health information to their own home computer or portable memory device. They can share that information with other providers, caregivers, or family members safely, securely, and privately. Of the 1.1 million users of My HealtheVet, more than 233,000 Veterans have upgraded (identity-verified) access to data from their VA medical record via Blue Button. During the first two months following Blue Button’s launch on August 28, 2010 about 100,000 Veterans asked to view their personal health data using the Blue Button and more than 150,000 PHRs were downloaded.” This is a great example of how a big part of transparency is making government data accessible and usable for the general public.

Community Health Data Initiative:“The Department of Health and Human Services (HHS) holds vast amounts of data that could help improve health including but not limited tosmoking rates, obesity rates, rates of potentially avoidable hospitalizations, determinants of health such aslocal access to healthy food), hospital quality, nursing home quality, and much more. The question faced by HHS: how best to unleash the power of this data to help improve health? HHS is supplying to the public – free of charge and without intellectual property constraint — a growing array of online, easily accessible, downloadable health data. Simultaneously and very importantly, HHS is also proactively marketing the availability of this data to innovators from the worlds of technology, business, media, academia, public health, and health care. These groups are using the data to power a growing array of applications that benefit the public.” (via theWhite House Innovations Gallery) The result? New community health maps and dashboards, health data integrated with web search — like hospital satisfaction scores on Bing, health care provider finders, educational games, and powerful new analytical tools for clinical providers, journalists, and community leaders, and much more. Government data is directly reaching citizens like never before.

In the last year we brought people together to build the body of knowledge around transparency issues at the….

Data.gov International Open Government Data Conference: The Data.gov Program Managment Office put together the first ever International Open Government Data Conference from November 15-17, 2010. The event brought together representatives from many Federal agencies and leaders from the United Kingdom, New Zealand, Brazil, and Australia, focusing on the real, practical issues governments are facing while highlighting the innovations surrounding open data. Attendees were exposed to a wide array of perspectives, Dan Morgan noted that the conference represented a bit of a shift in the conversation: concentrating less on the act of opening data and narrowing in on why opening data is important.

NASA Open Source Summit: On March 29 & 30, NASA hosted its first Open Source Summit at Ames Research Center in Mountain View California where engineers and policy makers across NASA and respected members of the open source community came together to discuss the challenges with the existing open source policy framework, and propose modifications that would make it easier for NASA to develop, release, and use open source software. But why is this conference a big deal? As eloquently stated to me by one of my colleagues, Dan Morgan, “it’s the law. Open Source Software is a required alternative that should be considered, but government is taking a different view about why these days. Counting on the Open Source Software community for patches and updates at speed keeps government naturally updated and keeps the procurement cycle out of the way. Plus, government’s giving back – the White House is contributing to the Drupal code base.” This summit brought together some important minds to think about how to do this more effectively in Government.

In the last year we pushed the limits of our own comfort zones to be more transparent and availble to the public….

The HUDdle Blog: To quote HUD, “To better learn from you and share the thoughts and ideas that shape our mission, we’ve launched our new official blog, The HUDdle. Not only can you use it to find out the latest news, but you can contribute and register your own opinions in our comment section. Most recently we’ve launched a Spanish language translation of the blog to provide even more accessibility for the Hispanic community.” This two way blog is a pretty big deal for HUD—they haven’t often been thought of as the more open and innovative agency, but this new way of engaging with the public and stakeholders demonstrates their commitment to integrate these principles into the way they do business. (Disclaimer: the HUD Open Gov Initiative a Phase One Consulting Group client) Participation In the last year we created platforms that make public participation in policy making, planning, and rulemaking more feasible and effective….

Federal Register 2.0: This is a big step towards helping the government and citizens work together better on policy making. “The new Federal Register website has a clear layout and Web 2.0 tools to help users find what they need. Users can check timelines for the entire history of rulemaking actions and set up RSS feeds on any topic or search term. Readers can easily connect with Regulations.gov to submit their comments on regulatory actions and read other public comments and supporting material. The site was built at minimal cost in just three months by using open source software and through collaboration with non-profit organizations, universities, and the open government community. The open source programming code is available for reuse by all.” (White House Innovations Gallery)

DOT’s Regulation Room: Regulation Room is a groundbreaking effort to bring the public into the rulemaking process in a more effective and useful way. It is an innovative pilot program between the Department of Transportation and researchers from Cornell University’s Cornell e-Rulemaking Initiative (CeRI) that allows the general public to comment on and discuss federal proposed rules through a transparent and intuitive online social platform. (Disclaimer: the DOT Open Gov Initiative a Phase One Consulting Group client) A great paper was recently published by Cornell that describes in more detail the impact of this type of collaboration on rulemaking.

Consumer Financial Protection Bureau Open for Suggestions: As a new Agency, CFPB has been open from the start. One the day they launched their new website they engaged in an “open for suggestions” campaign that received citizen feedback through tweets, online forms, and other mechanisms, and they committed to responding within hours. What’s more, they take transparency seriously and have posted Elizabeth Warren’s calendar since day one, posted all their letters to and from Congress, and consistently deliver messages that articulate their commitment to transparency (example, example, example). I’m excited to see what the coming years will have in store for them. In the last year we reached nontraditional groups through new means…

Social Security 101: On Thursday, March 10, 2011, SSA hosted an interactive broadcast for young adults titled “Social Security 101: What’s in it for me?” The webinar targeted college students and young workers around the country and focused on Social Security issues of special importance to them – disability and survivors insurance, financial principles of the program, how workers and their families qualify for coverage, and steps to plan and save for their financial future. The webinar also included a live Q&A session. Over 60 colleges/universities participated. Viewers even tuned in from foreign countries! Promotion of the webinar occurred largely through viral social media, generating more than 500,000 impressions through Twitter alone.

Collaboration

In the last year we laid we the groundwork for the Federal Government’s use of prizes and competitions to stimulate innovation and solve tough problems….

America COMPETES Act: Passage of the America COMPETES Act: Why is the passage of a law important? It’s definitely not as “cool” as a flashy new technology solution or high-gloss event, but this event will be a major enabler for Open Gov moving forward. First of all it will enable more agencies to have a strong argument for conducting prizes than ever before and furthermore it demonstrates that Congress is not a staunch opponent of prizes, but instead will permit them. There has been growing support from the executive branch towards prizes, but this demonstration of support from the legislative branch is huge and will result in many more prizes in the years to come.

Challenge.gov: By my count, as of today, there are nearly 100 challenges listed on challenge.gov. This is a huge surge from the launch date for challenge.gov on September 7, 2010. Challenge.gov is a storefront for all government challenges and has two primary benefits: (1) makes it easy for federal agencies to launch challenges and (2) makes it easier for the public to find challenges that interest them; support, share and discuss those that are important to them with friends; and solve them. Like contractors benefit from listing services like FedBizOps to identify opportunities, innovators around the world will benefit from the storefront aspects of challenge.gov.

NASA Tournament Lab (NTL) Initiative: According to the NASA website, “NASA and Harvard University have established the NASA Tournament Lab (NTL), which will enable software developers to compete with each other to create the best computer code for NASA systems. The NTL provides an online virtual facility for NASA researchers with a computational or complex data processing challenge to “order” a solution, just like they would order laboratory tests or supplies.” This initiative builds upon the successes of the NASA topcoder challenges that were kicked off in 2009. The success story here is that the success of a pilot project in 2009 has opened the door to make this type of democratized procurement a part of the way NASA does business.

In the last year we experimented with opening up the grantmaking process to stimulate and leverage private investment and innovation….

Department of Education’s Open Grantmaking Approach: This is truly a one-of-a kind groundbreaking effort in grantmaking. It attempted to create an ecosystem around education grant applications to compliment the limited amount of funding the Department of Education could provide. By creating a space for philanthropists to find unfunded applications they might want to fund or provide the matching funds to, visualizing the data about where grant applications were coming from, and providing a forum for challenges to identify new ideas that could have merit for funding, Ed truly opened our eyes to a new way of doing something the Federal Government has been doing for years. (for more details on this, see a previous jennovation blog posting)

In the last year we shifted a paradigm in how we react and partner in emergencies….

Social Crisis Response: This year we saw the convergence of social media and crisis response and leaders at the highest levels of our government embracing this trend – with people like @CraigAtFEMA leading the way. Just today, the Department of Home Security announced they would be sending terror and alerts via Facebook and Twitter. Why? Because we’re looking seriously at the application of these tools to enable our government to be effective in resource allocation – a conversation that is frequently missed. We’re also seeing amazing new apps like firedepartment.mobi that move beyond visualization and 311-type interfaces and has created a new group of citizen first-responders that could saves lives. It perfectly blends social and tech and has real life or death consequences.

I think this tells a pretty great story for Open Gov for the last year—and I continue to be very excited for what the future holds for this initiative. In closing, I want to thank Mike Rupert (@rupertmike), Dan Morgan (@dsmorgan77), and Jerad Speigel (@jspeigel1) for all collaborating on this posting in celebration of the one year anniversary of Agency Open Gov Plans.

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Happy Holidays Open Gov: Making Prizes More Attractive to and Possible for the Federal Government

Prizes and competitions provide one way to stimulate innovation and tap “solver communities” that may not have been leveraged previously when considering some of our nation’s grand challenges. As I wrote this past summer, there have historically been several hurdles to Federal agencies conducting prizes and competitions, including explicit authorization by Congress to do so. It’s hard enough for agencies to design and operate an effective prize and competition, but without a universal, permitting legal framework the upfront procedural work can be so burdensome that they are often never even explored as possible options. This upfront procedural burden has been one of the largest roadblocks for prizes and competitions up until this point. On December 21, 2010 Congress moved forward with a crucial piece of the puzzle to drive forward the President’s Innovation Agenda and the principles of Open Government. On this day, they passed the America COMPETES Reauthorization Act of 2010 with a series of provisions that will empower public sector use of prizes and challenges to spur innovation. The Prize Competitions section of the Act, which starts on page 17, provides Federal agencies across the Executive Branch with explicit authority to conduct prize competitions. The prize authority provision draws heavily from S. 3530, the Reward Innovation in America Act of 2010, introduced by Senators Pryor and Warner in June 2010 and it builds upon the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3701 et seq).

The impact of this legislation cannot be overstated; this is a HUGE win for Open Government and Government-supported innovation in the United States. Whereas recently prizes and competitions were largely ignored in common government vernacular, now not only has the White House supported their use through guidance issued this summer but also the legislative branch has demonstrated their support by passing the America COMPETES Act. Arguments against the viability and legality of these tactics to enhance problem solving and collaboration are now much more difficult. Happy holidays to Open Government practitioners throughout the US!

This Act significantly advances agencies’ abilities to use prizes and competitions by granting and/or expanding several key exemptions, provisions, and authorities. I’ve summarized some of the provisions below, in relative order of importance (in my opinion). At a glance, this Act:

1. Grants several authorities:

• Expands general prize authority to EACH agency head
• Expands gift authority for prizes and competitions

2. Institutionalizes various incentives and disincentives for participation:

• Prohibits the US Government from acquiring intellectual property rights (incentive)
• Limits eligibility for prize winners to US incorporated entities or US citizens/permanent residents (disincentive to some)
• Transfers risk of participation to participants (disincentive to some)

3. Eases the procedural burden of conducting prizes:

• Exempts Judging Panels from the Federal Advisory Committee Act

4. Specifies several procedural requirements for leveraging prizes:

• Specifies prize publication requirements:
• Clarifies limitations on the availability and amount of funding for prizes

It’s important to note that this Law does not prevent agencies from seeking broader prize authorities through the normal legislative process. So if any of the terms outlined above are severely restricting for agencies, they can lobby their committees to get more appropriate authorities expanded. This broad prize authority isn’t the same as all-encompassing prize authority. It can only go further in the future, and it does not limit the existing authorities that are already out there.

I believe in the coming years we will see the need emerge for a senior prize executive within agencies similar to the senior procurement executive and grants management office roles. Procurement and grant making are subject to management controls to ensure competition is fair and laws are followed. As prizes are another tool to leverage non-governmental expertise for service provision and problem solving, I expect to see conversations about centralizing prize management discipline within agencies to surface in the near future.

The rest of this blog posting describes in detail the key features of the America COMPETES Reauthorization Act of 2010 outlined above and my thoughts on the possible impact of those provisions. As always, please feel free to reach out to me at @jenngustetic at any time during this series to continue to conversation. Happy reading and happy holidays to all!

Jenn

Granting Several Authorities

Expands general prize authority to EACH agency head: Sec 24(b) states that “Each head of an agency, or the heads of multiple agencies in cooperation, may carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the respective agency.” Before this, some agencies had the authority to conduct prizes and competitions. However many others did not. Having the explicit authority to award prizes is a crucial first step in paving the way for agencies to consider these methods as viable options for problem solving and stimulating innovation.

This is an enhancement from the Senate version of this bill that was passed this summer. That version stated: “each head of an agency may carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the respective agency.” The final version of the Act allows agencies to cooperate in carrying out prizes together, increasing the opportunities for interagency collaboration in problem solving: a huge improvement.

As Vivek Kundra, the Federal CIO earlier stated “the real value lies at the intersection of multiple data sets.” Likewise, many of our Nation’s grand challenges lie at the intersection of multiple agency missions. Many partnerships benefit from such coordinated efforts, such as the Sustainable Communities Partnership among HUD-DOT-EPA. But even with coordinated grant awards, our ability to stimulate innovation in this sector is limited by the statutory authorities that each Agency has. This new kind of authority has potential to further break down those barriers to interagency collaboration in problem solving.

Expands gift authority for prizes and competitions: Sec 24(m)(1) states that “support for a prize competition under this section, including financial support for the design and administration of a prize or funds for a monetary prize purse, may consist of Federal appropriated funds and funds provided by the private sector for such cash prizes. The head of an agency may accept funds from other Federal agencies to support such competitions.” Up until this point, if a non-governmental organization was paying for anything at all (financial or in-kind) agencies would have to pay close attention to their gift authority. In most cases, a legal consultation and partnership agreements are required that detail the agency’s authorities for accepting gifts. In other cases, the Federal government is prohibited from receiving gifts. This “expanded gift authority”, for the use of prizes and competitions, will significantly assist agencies in identifying the funds to support the prize “purse” and well as operational expenses, making prizes a more viable option still.

Institutionalizing Various Incentives and Disincentives for Participation

Prohibits the US Government from acquiring intellectual property rights: Sec 24 (k) states that “the Federal Government may not gain an interest in intellectual property developed by a participant in a competition without the written consent of the participant. [However], the Federal Government may negotiate a license for the use of intellectual property developed by a participant for a competition.” To many, protection of intellectual property (IP) is a fundamental principle for encouraging entrepreneurship and innovation. It’s important that an inventor can retain “ownership” over their submission for many reasons; without the ability to retain ownership over an idea, individuals may have less incentive to create new ideas. Thus to IP protection advocates, without this provision prize participants might not invest as heavily in the competitions because there would be no guarantee that they could recoup their investment in the end. Thus, to IP protection advocates this is a very important incentive that was included in the legislation.

What would have been to consequence of allowing the government to acquire IP rights, you might ask? With the IP rights (which may be acquired through written consent according to this Act) the government could leverage new discoveries to further the entire national interest, rather than the segment that they can afford to buy as a product or license. This is the policy stance that China as a nation has taken. This has impacted Chinese companies significantly. They are experts at reengineering existing processes and product development lifecycles to create more efficient and low cost versions of a product. But they are not nearly as good at inventing new products because of their lack of IP protection. There is little incentive for companies and individuals to invest in new products if they are unable to recoup that investment when new innovations become available for all companies to produce in the national interest.

Limits eligibility for prize winners to US incorporated entities or US citizens/permanent residents: Sec 24 (g) (3) requires that to be eligible to win a prize under this section, “in the case of a private entity, [an entity] shall be incorporated in and maintain a primary place of business in the United States, and in the case of an individual, whether participating singly or in a group, [an individual] shall be a citizen or permanent resident of the United States”. This provision may have a cooling effect on the total innovation possible as a result of this Act. By limiting the solver community to only US incorporated entities or US citizens/permanent residents, agencies may not be able to select, in all cases, the best solution for a particular problem. This provision arguably limits competition. Some might say that with Buy America provisions gaining ever-increasing attention, this small bit of protectionism doesn’t hurt us. And even though the intent of this provision seems to be to reward Americans for their creativity, others might say that it may also result in less optimal solutions than if more competition had been allowed. This is a politically divisive issue.

Also, by limiting eligibility to win a prize, this Act raises questions about whether or not non-US citizens will legally be able to participate in commenting and discussion functions for idea focused challenges even if they don’t win the final prize. The Act lists several explicit prize types that are allowable including point solution, exposition, and participation (see this McKinsey report for more types). Exposition prizes in particular could be very difficult to manage in practice given the eligibility limitation in the Act. Exposition prizes are typically focused on identifying and highlighting good ideas—which is also commonly known as “ideation”. Ideation often involves on-line voting and commenting (see these examples: HUD’s Ideas In Action,Department of Education’s Open Innovation Portal, and the EPA’s Open Government Ideascale page, for example). If non-US citizens cannot win a prize, then they may have less incentive to comment on and enrich ideas. Furthermore, agency legal shops may interpret this Act to mean that non-US citizens should not even be permitted to vote and comment to draw a bright line around participation and award eligibility. However, this policy position presents a complicated technical issue as agencies will need to control and authenticate users who are participating on-line. That’s no small feat.

Transfers risk of participation to participants: Sec 24 (i)(1)(b) states that “registered participants shall be required to agree to assume any and all risks and waive claims against the Federal Government and its related entities, except in the case of willful misconduct [and for misuse of intellectual property, trade secrets or confidential information], for any injury, death, damage, or loss of property, revenue, or profits, whether direct, indirect, or consequential, arising from their participation in a competition, whether the injury, death, damage, or loss arises through negligence or otherwise.” (emphasis added) The effect of this is rather large. As stated in one of my previous blog posts, one of the key structural issues to consider when setting up a partnership between the public and private sectors is the degree of risk shared by each partner. Usually, in PPPs, risk sharing can be negotiated based on which party is more able to bear various risk types (financial, legal, political, safety, etc…) and there is often a price associated with those risks for the private partner in the form of insurance. If risks are unevenly allocated the private partner may not be able to bear the cost of all those risks and thus chose to not participate.

This Act pre-determines, to a certain extent, the risk sharing profile for prizes; most of the risk will be borne by participants—not the government. There are pros and cons to having participants bear the majority of risk, especially for technical experiments (like for the NASA centennial prizes) where (1) there is a vast degree of uncertainty in the safety of new technologies and (2) the cost to bear the risk could be prohibitive for participants. The one exception to this risk allocation however serves to protect participants from misuse of their IP during the course of the competition (in addition to protection from willful misconduct). The risk for mishandling IP, trade secrets and confidential information is borne by the Government according to the Act. The bottom line is that with no flexibility in how to allocate risk sharing, this provision may deter a lot of possible solvers from participating in prizes and competitions. However, the ability to retain all IP rights offset some of the potential chilling effects of having participants assume all risk

Eases the Procedural Burden of Conducting Prizes

Exempts Judging Panels from the Federal Advisory Committee Act: Sec 24(k)(4) states that “the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to any committee, board, commission, panel, task force, or similar entity, created solely for the purpose of judging prize competitions under this section”. FACA applies when an advisory committee is established or utilized by one or more agencies, in the interest of obtaining advice or recommendations for the President or one or more agencies or officers of the Federal Government. This law requires advisory committees to follow a rigorous process for selection and meetings. Exempting judging panels could significantly relieve many of the procedural burdens currently associated with selecting prize winners through panels of expert judges.

Specifies Several Procedural Requirements for Leveraging Prizes

Specifies prize publication requirements: Sec 24 (f) requires that for each prize competition, the head of an agency shall publish a notice in the Federal Register announcing the prize subject, rules, process, amount, and evaluation criteria. Posting on challenge.gov alone DOES NOT meet this requirement. The law now requires that prizes be posted alongside other notifications to the public in the Federal Register.

Clarifies limitations on the availability and amount of funding for prizes: Sec 24(m)(2) states that “notwithstanding any other provision of law, funds appropriated for prize awards under this section shall remain available until expended.” This is what is known in the Federal government as “no-year money”. This is important because expiration of funds will not influence the deadlines for prizes and competitions. Some, like the centennial prizes may need to be active for years in order to find a winner, and “1 year or 2 year” funds that have been appropriated with an “expiration date” can make those open ended deadlines impossible. This provision adds flexibility to prize deadlines based on the nature of the problem the prize is attempting to address.

Sec 24(m)(4) states that “no prize competition under this section may offer a prize in an amount greater than $50,000,000 unless 30 days have elapsed after written notice has been transmitted to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Science and Technology of the House of Representatives. [Furthermore], no prize competition under this section may result in the award of more than $1,000,000 in cash prizes without the approval of the head of an agency.” Agency heads must approve all prizes in excess of $1M and Congress must approve all prizes in excess of $50M. To me, this indicates Congress’ recognition that large prizes to address grand challenges are encouraged and supported. Recent trends towards “small money” apps and video contests are of course permitted as a result of the legislation, but the Act opens the door for much more strategic investments in large scale prizes.

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Focusing on WHY to Drive Adoption: iPad is Current, Learning and Productive. What is Government?

These past two weeks have been a whirlwind of travel and conferences. I’ve enjoyed several typical byproducts of those types of events (networking, learning, etc…) but also a few things that are much rarer: inspiration and re-energized passion. This is largely thanks to my most recent stop: NASA’s Education Innovation Summit, held in Orlando, FL from October 30-November 1. This event focused on how partnerships and student inspiration can act as catalysts for change, specifically: (1) discussing strategies to inspire students who are capable of academic success in science, technology, engineering, and mathematics (STEM) but lacking in motivation, and (2) contributing to ideas to help strengthen collaboration among industry, non-profit organizations, academia, and government agencies. [1] Steve Ressler from Govloop and Alex Howard from O’Reilly Media attended a different event surrounding the STS-133 shuttle launch held at the same time, the #NASATweetup, but I think I can easily say we all walked about having a paradigm shifting experience. This posting focuses on my major take-aways from this immersive experience at NASA. In Washington, many recent conversations on blogs and in the halls of the federal government have revolved around about how to further open government/ gov 2.0 and whether or not it’s “dead”, how to drive IT innovation, how to improve performance and mission delivery through technology, and how to best leverage partnerships and innovative financing to maximize public value. These are all important questions with complicated answers, but as I sat with educators, NASA scientists and private sector executives in Orlando this week, it hit me that we are largely focusing on the wrong questions. We are focused on WHAT we’re doing as a government and HOW we deliver those services and not WHY we’re doing it. I attribute this synapse fire to the keynote speaker, Simon Sinek, the creator of “the golden circle”.

Simon highlighted Apple as an example of how to properly use the golden circle (“why” first, “how” second and “what” third) to drive adoption. Why is Apple successful as a company and why do they have such phenomenal brand loyalty? According to Simon it’s simple: Apple sells a value system (the WHY) not a product (the WHAT). If you like Apple, you believe in challenging the status quo. You’re hip, different, and innovative. You’re current, educated and playful. You are an early adopter. You’ve got an appetite for risk and like people to know that. They base their whole sales pitch on the notion that there are enough people who share that value system that they’ll be profitable. When you buy an Apple product you’re buying a value system, not necessarily the best product for that purpose. Furthermore, Apple can charge a premium to those folks that have unbalanced loyalty to them as a company because of this value proposition.

But how does this apply to the Open Gov/Gov 2.0 community? Our WHY is NOT transparency, participation and collaboration. If we strive to be open for openness sake alone we’re not driving anything that matters. Open Gov supports the mission. But WHY is the mission important and WHY is open government essential to further it? We’ve been largely focusing on the HOW without a clear WHY. Even Jeffrey Levy’s spot-on “Mission, Tools, Metrics, Teach” approachmisses step one based on this logic. It assumes that the mission is clear and that it will resonate with our customers and the general public. But that’s not always the case. How many of us in government have a hard time communicating to the general public WHY they should care about what we do for them? If we can’t do that, then all the HOWs and WHATs in the world will have a fraction of the impact we desire.

Enter NASA. Here’s a government agency that has no problem being perceived as one of the coolest places in government. They do cool stuff. But it’s not about WHAT they do (shuttle launches, etc..) it’s about WHY they do it that captivates our minds. After this week in Florida, I am more convinced than ever that one of NASA’s greatest roles is to inspire. NASA is about exploration, about pushing the boundaries of the human mind, about driving towards breakthrough discoveries, about looking into the great unknown and humbling us all. NASA scientists and engineers have been instrumental to the communications revolution that we in the gov 2.0 and open gov community have to thank for the tools we now have to drive innovation. In fact, NASA research has lead to thousands of spinoff technologies that drive entire industries unrelated to space. Some of the more interesting and surprising ones include:

• Communications satellites
• CAT scans and MRIs
• Portable x-ray technology for neonatal offices and 3rd world countries
• ATM technology
• Pay at the Pump satellite technology
• Cordless tools
• Aerial reconnaissance and Earth resources mapping
• Hazardous gas sensors
• Precision navigation
• Secure communications
• Lightweight breathing system used by firefighters
• FDA-adopted food safety program that has reduced salmonella cases by a factor of 2
• Multispectral imaging methods used to read ancient Roman manuscripts buried by Mt. Vesuvius [2]

Lane Wallace describes how NASA consistently stretches the boundaries of technology to drive scientific exploration and inspire breakthroughs. If this following quote from her blog doesn’t inspire us all to go and do some pretty amazing things with the state of technology today, I don’t know what will….

“In the early days, communication systems were also limited and unreliable, requiring cumbersome back-up strategies and an extraordinary level of innovative thinking. On a test flight of the Saturn V vehicle that would launch the Apollo spacecraft, for example, the phone lines to the remote western Australia tracking station of Carnarvon went down. (NASA set up a worldwide network to keep track of the launches and keep in touch with the astronauts at all times.) Undeterred, the Australians sent launch times and data back and forth to the station over more than 1,000 miles of the Outback–using the top wire of cattle ranchers’ fences as a makeshift telegraph wire. As for the high-tech systems that allowed the Apollo astronauts to operate their spacecraft and navigate to the moon and back … the Apollo computer was digital, but it had a whopping 36KB of memory. Think about that. We went to the moon on 36K…Consider the obstacles. Consider the lack of knowledge and technology. Consider all that went wrong along the way. And then listen to the recording, in light of those reference points. And perhaps, if the stars line up just right, you might find yourself feeling the true wonder of it all—either for the first time, or all over again.” [3]

But despite all of these incredible reasons WHY NASA is important, its future is threatened. It’s not a secret that the government is facing significant budget cuts and space launches seem to be, in the scheme of things, one of the programs that could be cut. But NASA is not just about space launches—the WHAT. They are uniquely positioned in government to inspire a whole new generation a STEM leaders that are not only required for scientific advancement in general but to keep the US internationally competitive. They are one of the few government agencies whose basic research has spawned countless industries and jobs in the private sector over the years. They are the American spirit. They keep us dreaming and striving to challenge ourselves. I am convinced that the future of our country will be significantly hindered if we don’t continue to prioritize the work NASA does in annual budgets and presidential priorities.

Thus I ask the open gov/gov 2.0 community, do you think that one role of government at the federal, state and local levels in partnership with the private and non-profit sectors is not only to engage, but also to inspire and to make the mission real for the general public? Who’s responsibility is this important piece? Inspiration does not need to be expensive; it’s largely messaging.

Even Apple calls space “magical” through their “iPad is…” commercials. So where are the “NASA is…” messages? Where are the “Government is…” messages? How do we communicate WHY we do what we do in a way that is meaningful to the public and our congressional appropriators? Who’s responsibility it this in your opinion? I strongly believe that only when the WHY resonates with the public at large will we realize the open gov and gov 2.0 adoption we are all working towards so diligently. I encourage us all to focus much more on a WHY that resonates with a larger audience than the tech community alone in our conversations and less on the WHAT and HOW.

As always, please feel free to reach out to me on twitter at @jenngustetic at any time during this series to continue to conversation.

Jenn

Originally posted on the Govloop’s Featured Jennovation Blog Series.

[1] https://www.regonline.com/builder/site/Default.aspx?EventID=894298

[2] Read more at Suite101: Practical Applications of Space Technology: Discoveries and Developments by NASA and Their Benefit to Societyhttp://www.suite101.com/content/practical-applications-of-space-technology-a98927#ixzz14ETWrVrW

[3] http://www.nomapnoguidenolimits.com/2009/07/19/what-got-us-to-the-moon/

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Open Government is Not Dead: The Conversation is Just Maturing…

This installment was inspired by the recent Open Government Community Summit held at NASA on October 13, 2010 and many recent blog postings discussing variations on the death, sophomore slump and/or decline of Gov 2.0 and Open Gov (including “Sophomore slump for Open Government?”, comment thread of “What Gov 2.0 Needs Now”, “Will Gov 2.0 and Open Gov Die?”). Over the last year my colleagues and I at POCG have been striving to contextualize the Open Government Initiative within a broader innovation vision. This presentation from the Summit introduced some of our thinking to the attendees. This blog posting shares the same thinking. Bottom line: Open Government is not dead. However, Open Government initiatives are only part of what is required to cultivate an innovative agency culture. They are an important part of a much larger innovation ecosystem, but only one part nonetheless. To cultivate a culture of innovation, the broader picture of what “innovation” means to the Federal Government is critical to understand.

True innovation powered by good ideas is a tricky thing. Before you continue reading, I highly recommend you take five minutes to watch this great video “Where good ideas come from” for a walk through one depiction of the evolution of great ideas over history. What Gov 2.0 champions, Open Government Senior Accountable Officials, and the feds and consultants that support them have been trying to do over the last year, under the direction of the Open Government Directive, is complicated and incredibly difficult. Over the last couple years agencies have been experimenting with apps contests, data release and visualization, social media, and other Open Gov related efforts. These are huge efforts within themselves given the technology, policy and cultural barriers to implementation that exist. But to create the lasting change that will truly revolutionize government performance, many of those individuals have realized that establishing a culture of innovation that has permanence, is institutionalized, and directly improves mission delivery is paramount. It’s creating that culture of innovation that seems impossible but is one of the most important outcomes of all this recent Open Gov and Gov 2.0 activity. The jury remains out on how the variety of initiatives we’ve already undertaken will support a culture of innovation.

As Dan Morgan (@dsmorgan77), an Open Gov Associate at POCG, would say “Government can create new spaces where ideas can collide, ecosystems can form, and innovation can be nurtured. It can do this in benevolent fashion, such as with prizes and competitions. It can do this with open data either actively (Community Health Data Initiative) or passively (simply releasing data on data.gov). It can use these tools internally (DOT’s IdeaHub, etc.) as well as externally (Unemployment Insurance reforms) to improve data quality, drive better data-driven decision making in formulating policy, achieve program performance targets, and ultimately deliver improved outcomes.” But this requires a fundamentally new way of thinking about how the government does business, across the board. It requires a culture of innovation throughout the business—not just in Open Government offices.

Does this vision seem a bit broader than the mandates in the Open Government Directive? It is. This vision is discussed in the President’s Strategy for American Innovation. If you haven’t read that document in full yet, I highly recommend you do. Figure 1 below displays some of the tactics that are mentioned in this Strategy to drive innovation. Within the context of the Strategy, Open Government is a critical enabler in accomplishing all of the key outcomes. Within this context, an Open Government can transform, accelerate, and increase the value of the outcomes of innovations. Open Government is only one enabler for innovation.

Figure 1: Sample Tactics for Promoting American Innovation

So what does this mean to the heroes out there that are struggling to advance the principles of Open Government every day? It means they are not alone. It means there are other tactics that are likely being employed at their agencies that share a common vision for innovation. It means that there is a larger context within which Open Government principles lie. Obviously, some of the puzzle pieces shown in Figure 1 overlap in theory and in practice. Table 1 below highlights some examples where Agencies are taking significant steps towards creating an innovative culture leveraging some of these tactics. Many of these efforts might be unknown in the current Open Gov context because of how we’ve framed the discussion around Open Government and Innovation.

 

Table 1: Examples of Agency Innovation Efforts (full disclosure: DOT is a client)

So for all you Open Gov practitioners, advocates, and heroes out there, what does this re-framing mean to you? It should help you further your objectives with new tools in your tool belt.

• Identify other innovation leaders in you agency. Bring those innovation leaders to cross-agency events and get them familiar with the Open Government Initiative. Become familiar with their programs and goals. You can be each other’s greatest allies.
• If your managers are resistant to Open Gov, try broadening the conversation to one of Innovation. It’s hard to argue with pursuing innovation to improve mission performance.
• Leverage Open Gov initiatives and pilots as success stories for innovation.

I’ve blogged before on many of the other puzzle pieces (including prizes and competitons,partnerships for sustainability, partnerships to create secondary markets to fill funding gaps, andpartnerships to develop infrastructure) and will make an effort to focus on some of the others in future blog postings. What are some other great examples of Agency innovation that are benefiting from the principles of transparency, participation and collaboration that you know of? What do you think about elevating the conversation from one of furthering “open government” to furthering “innovation”? What are the unintended consequences of such a scoping?

As always, please feel free to reach out to me on twitter at @jenngustetic at any time during this series to continue to conversation.

Jenn

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

When NOT to Take the Lead: Partnering with Academia to Solve Our Nation’s Problems

This past week, I was up in Boston recruiting at MIT and Harvard and meeting with some of the Cambridge brain trust that are thinking about how to leverage technology, policy, and new incentive schemes to spur entrepreneurial markets and transform the government. During one of these fascinating coffee sessions with Georgina Campbell, a current student in my former graduate program (the Technology Policy Program at MIT), I learned about a phenomenal example of partnerships furthering innovation and entrepreneurship—the MIT clean energy prize. Georgina is one of this year’s managing directors. The MIT Clean Energy Prize (CEP) is a venture creation and innovation competition that was established in 2008 to encourage innovation in the energy space, specifically with regard to clean energy (see this executive summary for more detail on the prize). Since 2008, over 200 student teams from more than 60 U.S. universities have entered the competition. By the end of the 2010 competition, more than $800,000 in cash prizes will have been awarded. Furthermore, the CEP has only been around for 3 years yet the past teams have managed to raise over $65 million to support their clean energy technologies, including $13 million from the government-sponsored Advanced Research Project Funding for Energy (ARPA-E) program. The Department of Energy (DoE) is a key partner in this competition, providing much of the cash prize the last three years. There are several interesting things about this prize in particular:

• The DoE is a crucial partner, but not the lead on furthering this problem solving effort. As I’ve outlined before, prizes and competitions provide one way to stimulate innovation and tap “solver communities” that may not have been leveraged previously when considering some of our nation’s grand challenges (see my blog posting from the White House/ Case Foundation event on prizes and competitions in April where I discuss this assertion in more detail). Much of the recent discussion on prizes and competitions, even at the Gov 2.0 summit, has focused on prizes that are spearheaded by the Federal government. What the clean energy prize demonstrates is that the government is in many cases an essential partner in tapping solver communities, but that driving prizes and competitions does not need to always be the government’s primary responsibility. In this case, MIT is taking the lead, partnering with the government, giving graduate students an opportunity to learn the skills required to support this type of innovation, and producing technology innovations that are market-ready. The government does not always need to take the lead for prizes and competitions to be highly effective—as most commonly recognized through the X Prize Foundation’s work.
• Teams must be at least 50% made up of students and thus the “solver” base is motivated to participate by a variety of different things. Many mechanisms motivate teams to participate, including: the prize purse; superlative feedback on their entries from world class judging panels; a team-specific mentoring experience from dedicated and experienced industry, business and legal experts (in the semi-final rounds); feedback on business cases and entrepreneurial approaches to commercializing new technologies; and the opportunity to become part of a network of clean energy professionals and connect with potential clients and partners. Just by participating, students are engaged outside the classroom setting, given an opportunity to extend classroom theory to practice, and directly involved in strengthening Academic-Federal-Private relationships. This reinforces the importance of identifying solver communities in the initial prize design and determining incentives schemes based largely on the targeted solvers. Prizes are not simply “if you build it they will come”; they must be tailored individually to maximize impact.
• The clean energy mission of this prize furthers one of the highest priorities of the administration, but is likely to not be as well known throughout Washington DC as many of the apps contests and video challenges. To me, this is where the power of challenge.gov as a marketing platform becomes incredibly important to publicize prizes that target solver communities to engage in some of the grand challenges of our time—regardless of whether or not they are led by the federal government. However, this is only one communication channel and many will need to be leveraged to reach the full scope of solvers, influencers, mentors and partners in this issue area. Much more than a storefront will be needed to fully leverage the potential of prizes and competitions.

These interesting tidbits point to the notion that government agencies may need to consider a more organized way to receive competition/challenge participation requests from the public, industry and academia. The number of challenges most Agencies can support is limited, in some part due to internal inertia and support for prizes as a viable model for problem solving. Should the White House and OMB consider a simple policy or memorandum that clarifies how agencies can participate in external challenges much like the MIT challenge mentioned above? That way if an Agency can’t figure out how to support challenges where it takes the leading role, then at least it can judge or somehow participate in some external challenge of some sort. The point is that there are many possible structures and models for meaningful prizes and competitions—which is why intelligent prize design up front is so important.

Any other unique things you notice about this prize? What about other notable prizes that you don’t think are getting enough publicity in DC? Expect future jennovation postings that will be co-authored by Georgina as I monitor and share the MIT team’s progress on this year’s clean energy prize. As always, please feel free to reach out to me on twitter at @jenngustetic at any time during this series to continue to conversation.

Jenn

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Suburban Sprawl and Sustainable Communities: Enhancing Mission and Public Value through Open Government and Partnerships

For the last year, I’ve been blogging about the three pillars of the Open Government Initiative—transparency, participation and collaboration. Each pillar points at the same theme: the Government cannot provide the best value with taxpayer dollars on its own. External partners are crucial to ensure value is maximized. Furthermore, Open Government in itself is not the mission of any Federal, state or local government; however its principles do help agencies achieve their particular missions more effectively. In practice, aligning these principles with existing programs and practices can be incredibly complex. In this week’s blog posting, I will describe one complex mission area and how Open Government principles may advance its provision. Complex Mission Provision: Encouraging Livable and Sustainable Communities  This year, leveraging Open Government principles, the Department of Housing and Urban Development (HUD) and the Department of Transportation (DOT) openly collected public feedback on their draft strategic plans (HUD used uservoice whereas DOT used ideascale). The Environmental Protection Agency (EPA) also collected public feedback on their draft strategic plan during June and July of this year. HUD, DOT and EPA share one common strategic goal: to encourage livable and sustainable communities.

Duany, Plater-Zyberk, and Speck distill the issues surrounding sustainable communities phenomenally in their book “Suburban Sprawl: The Rise of Sprawl and the Decline of the American Dream”. In this book they describe how throughout the last century many government policies and professional standards have contributed to sprawling communities in America with underperforming schools, pollution, traffic and congestion, crime and unaffordable housing. But what defines “suburban sprawl” and how does this urban development model create communities that differ from traditional communities?Table 1, below, describes the differences between traditional communities and those developed as a result of suburban sprawl.

Table 1: Dominant Characteristics of the Two Models of Urban Growth

The clumping of land-use types in sprawling communities is partially a result of Federal policies after the Second World War, including the terms of FHA and VA loans that encouraged the construction of new homes and not the renovation of existing homes, the interstate highway program, and the neglect of mass transit [1]. On top of these Federal programs and policies, the planning profession worsened the physical separation of the aspects of daily life through zoning laws which require housing types, commercial and civic buildings to be separated.

But why should these differences matter to each of us and why is “livability” an important strategic goal for HUD, EPA and DOT?

• Our streets are less safe both for pedestrians and drivers, and we spend way more time commuting, extending our work-day [2]
• Homes are less affordable, and cars take away resources for buying a home for many people [3]
• Federal, state and municipal funds can’t keep pace with new growth at acceptable levels of taxation [4]
• If you’re one of the 80 Million Americans unable to drive, you have serious accessibility issues [5]

How to Improve through Openness and Partnerships

Given the coordination challenges across the Federal, state and municipal governments regarding livability issues, the need to engage experts in problem solving, and the responsibility of each citizen to advocate for their community, the livability mission area is ripe for more effective use of Open Government principles. In particular there are several ways that each level of government could “open up” and better coordinate community planning.

Municipal level: Local planning should be done with public participation [6]. This can include developing community master plans, monitoring compliance with guidelines, advisory committees and ongoing feedback and ideation.

Regional level: The US largely lacks regional government. Coordination between municipalities for regional planning is largely based on loose partnerships. This is not necessarily a problem if effective public-private partnerships amongst municipal and state governments and appropriate private partners can be formed and sustained to address regional issues. Regional planning and partnerships should be incentivized.

State level: At this level, interrelated issues begin to become siloed. In the words of Duany, Plater-Zyberk, and Speck , “[if state DOT’s] wish to play a role in the creation of healthy communities, [they] must come to view transportation policy as an integral component of a regional land use plan, not just as an autonomous problem with a financial solution”. [7] Transparency with spending data, participation in the planning process, and collaboration between state agencies with different missions are crucial to expose areas for improvement.

Federal level: There are many complex issues at this level, including:

• Determining how Federal funds trickle down through grant programs to fund state and municipal government’s development funds. Without coordination and engagement with other Agencies, the public, and experts on policy choices about what to do with Federal funds, these grant programs can work against each other rather than complimenting one other.
• Determining how to address the decline of the Highway Trust Fund and the lack of money to adequately fund sustainable transportation. The Federal government should be prioritizing developing innovative approaches to transportation financing (in addition to FHWA and FTA’s efforts), including how to best leverage private capital and expertise through non-traditional means. This could be an area ripe for prizes and competitions.
• Leveraging household, workforce, transportation, and labor data to inform decisions about place-based policy making (CTPP has a lot of great information here).

In general, government policies often exist to correct some sort of perceived market failure or need. Open Government can help by providing the government with more complete information on what market failures exist and what needs the proposed policies may fill (or hinder). Livability is an example where embracing Open Government principles at ALL levels of Government could help improve policy choices and each American citizen’s quality of life.

Are you aware of any examples of where transparency, participation and collaboration at the municipal, regional, state or Federal level is happening currently to address livability? What’s working? What’s not working?

I look forward to hearing your thoughts and as always, please feel free to reach out to me  at any time during this series to continue to conversation. Also, if you’re interested in more discussion about this subject, I encourage you to register for the GOVgreen Conference & Expo (http://www.govgreen.org/ ), Nov. 9-10 at the Washington, DC Convention Center.

Jenn

[1] Duany, Plater-Zyberk and Speck. Suburban Sprawl: The Rise of Sprawl and the Decline of the American Dream. North Point Press. New York, NY. © 2000. P 7-8. [2] Duany. P 119-125. [3] Duany, P 56. [4] Duany, P 7, 127-29. [5] Duany, P 115. [6] Duany, P 226. [7] Duany. P 231.

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Congress Simplifying a Process? Making Prizes more attractive to the Federal Government…

Prizes and competitions provide one way to stimulate innovation and tap “solver communities” that may not have been leveraged previously when considering some of our nation’s grand challenges (see my blog posting from the White House/ Case Foundation event on prizes and competitions in April where I discuss this assertion in more detail). Building on their work to drive the use of prizes and competitions in government, the White House Office and Science Technology Policy’s (OSTP) Tom Kalil and Robynn Sturm recently described a significant step towards enabling innovation through these methods on the OSTP blog. In this posting, they describe how during the week of July 19, “the Senate Commerce Committee approved the America COMPETES Reauthorization Act of 2010 with a provision that could further empower public sector use of prizes and challenges to spur innovation. The Prize Competitions section of the Committee bill would provide Federal Agencies across the Executive Branch with explicit authority to conduct prize competitions. The prize authority provision draws heavily from S. 3530, the Reward Innovation in America Act of 2010, introduced by Senators Pryor and Warner in June.” The impact of this legislation would be huge for conducting prizes and competitions government-wide. As I blogged last month, both on my featured jennovation series on Govloop and the Phase One Consulting Group Transformation in the Federal Sector Blog, there are several hurdles to federal Agencies conducting prizes and competitions, including explicit authorization by Congress to do so. The Pryor/Warner language would advance Agencies’ ability to use these innovative problem solving methods by granting and/or expanding several key exemptions and authorities, including:

• General prize authority to EACH Agency head: Sec 24(b) states that “each head of an agency may carry out a program to award prizes competitively to stimulate innovation that has the potential to advance the mission of the respective agency.” Right now, some Agencies have the authority to conduct prizes and competitions. However many others do not. Having the explicit authority to award prizes is a crucial first step in paving the way for Agencies to consider these methods as viable options for problem solving and stimulating innovation.
• Exemption from the Federal Advisory Committee Act for Judging: Sec 24(k)(4) states that “the Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to any committee, board, commission, panel, task force, or similar entity, created solely for the purpose of judging prize competitions under this section.” FACA applies when an advisory committee is established or utilized by one or more Agencies, in the interest of obtaining advice or recommendations for the President or one or more Agencies or officers of the Federal government. This law requires advisory committees to follow a rigorous process for selection and meetings. Exempting judging panels will significantly relieve many of the procedural burdens currently associated with selecting prize winners through panels of expert judges.
• Gift authority for prizes and competitions: Sec 24(m)(1) states that “support for a prize competition under this section, including financial support for the design and administration of a prize or funds for a monetary prize purse, may consist of Federal appropriated funds and funds provided by the private sector for such cash prizes. The head of an agency may accept funds from other Federal agencies to support such competitions.” Currently, if a non-governmental organization is paying for anything at all (financial or in-kind) agencies have to pay close attention to their gift authority. In most cases, a legal consultation and partnership agreement is required that details the Agency’s authorities for accepting gifts. In other cases, the federal government is prohibited from receiving gifts. This expanded gift authority, for the use of prizes and competitions, will significantly assist agencies in identifying the funds to support the prize “purse” and well as operational expenses, making prizes a more viable option still.

In the coming months I’ll be keeping a close eye on the progress of this legislation through the Senate. It’s hard enough to design and operate an effective prize and competition, but without a permitting legal framework the upfront procedural work can be so burdensome that they are never explored as viable options. This upfront procedural burden is one of the largest roadblocks for prizes and competitions. Thus, this legislation is a crucial piece of the puzzle to drive forward the President’s Innovation Agenda and the principles of Open Government.

Are there any other barriers to the use of prizes and competitions that you’ve seen torn down recently? Perhaps the promise of the www.challenge.gov portal to market and support the operation of prizes once they are identified?

As always, please feel free to reach out to me at any time during this series to continue to conversation.

Jenn

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Mind the Gap: How Innovative Partnerships Can Help Fill the Funding Gap

In my introductory posting in the “jennovation” series for Govloop and Phase One Consulting Group’s Transformation in the Federal Sector Blog, I introduced you to an innovative platform known as the Department of Education’s Innovation Portal. This week I want to describe a little more about how that portal, in combination withdata.ed.gov and the i3 Foundation Registry, demonstrates how government 2.0 technologies can help to create secondary markets to fill funding gaps. This is making a bit of a jump from my last posting, where I focused on Public Private Partnerships (PPPs) in infrastructure development. However, both examples, whether it be building a road through a PPP or funding innovative education solutions, demonstrate how in many instances private capital must supplement federal funding to solve the grand challenges of our time.

The Department of Education was appropriated $650M through the American Recovery and Reinvestment Act (ARRA) for the Investing in Innovation (i3) grant program to “provide competitive grants that expand the implementation of, and investment in, innovative and evidence-based practices, programs and strategies that significantly:

• improve K-12 achievement and close achievement gaps;
• decrease dropout rates;
• increase high school graduation rates; and
• improve teacher and school leader effectiveness.

[The funds are intended] to accelerate the creation of an education sector that supports the rapid development and adoption of effective solutions.” [1]

Instead of disbursing the funds through an entirely traditional grant program, the Department of Education has leveraged the principles of Open Government in several innovative ways to pilot “open grant making”. Their approach has opened up the entire process of grant making to make federal funding demand more visible, to encourage a more transparent award process, and to create a secondary market for unfunded applications. They are piloting how to do this through several innovative websites that provide different functions:

• Data Visualization: The data.ed.gov portal visualizes important information about the grant applications (no awards have been made yet): location of applications, amount requested, summaries of the projects, and the ability to filter by priority area and project type (development, validation and scale-up). This is a relatively novel way of displaying pre-award grant information. Currently USASpending and theFederal Assistance Award Data System display award information but not pre-award information. Why is this important? It’s hard for us to do the research to know who applied for funds but didn’t receive them in a systemic way. Data.ed.gov allows the public to understand trends in applications for federal funds, not just the awards,and thus get a better view at the demand for federal funds in this issue area.
• Ideation and Challenges: The open innovation portal provides a second crucial functionality to education’s innovation agenda. This portal allows anyone to post challenges on education issues (once they are moderated). In addition, this portal acts as a gathering place for the education community to submit ideas about how to improve our nation’s education system. This platform will plug intowww.challenges.gov once that new government-wide challenges portal is launched in August. This portal allows new issue areas to be identified and collaborated on in a transparent fashion.
• Secondary Market for Education Solutions: The i3 Foundation Registry, in my mind, is the REALLY cool part of this innovation triad. Typically grant programs receive applications, review and score those applications, and then award funds based on the scoring of the applications and the total amount of funding available. There are usually quite a few applications that score relatively well but can’t be funded due to insufficient funds. It’s not a revolutionary concept that federal funds are often not able to meet the demand for funding in many fields. What makes the foundation registry so cool is that it allows foundations that would be likely to fund innovative solutions in this issue area to find grant applications that weren’t successful in receiving federal funds. This site creates a secondary market for innovative education solutions.

You may have heard of kiva.org, a non-profit that connects people, through lending, for the sake of alleviating poverty (see how kiva works). “Kiva empowers individuals to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending.” [2] On this site, anyone can donate to an entrepreneur a world away that might just need $200 to start their business. Lenders are paid back in full 98.78% of the time [2]. Often time, the entrepreneur just needs some start-up capital that doesn’t have prohibitive interest rates. Kiva allows multiple lenders to combine their resources to fund one entrepreneur. Some quick stats:

• Total value of all loans made through Kiva: $150,250,250
• Number of Kiva Users who have funded a loan: 468,971 [2]

Kiva created a way for lenders to find projects they’d be likely to fund through the power of the internet. The i3 foundation registry has done something very similar, albeit for projects that require much more funding. By displaying the grant applications that could not be funded, foundations that would be likely to fund these types of projects are able to find possible investment opportunities.Partnerships will be possible that would likely never have been possible before. Foundations are able to identify projects that might not have been on their radar before.

The i3 grant program is a pilot in innovative and open grant making—sharing more information throughout the grant process to leverage secondary markets to fill the funding gap between the federal supply of funds and the demand for funding.

This concept has recently had me thinking a lot about other critical issue areas where this model might work:

• Health research
• Transportation solutions
• Sustainable community development
• Energy research

The challenge in many of these problem areas however is who would constitute to secondary market. At least in transportation, many of the interested parties would largely be for-profit entities, not non-profit foundations like in education. So I turn the question around on you: In what other major issue areas for the U.S. government could open grant making principles be leveraged? What would the challenges be? Where could possible funders be better connected with those innovative solution providers out there?

As always, please feel free to reach out at any time during this series to continue to conversation.

Jenn

[1] http://www2.ed.gov/programs/innovation/factsheet.html

[2] http://www.kiva.org/about/facts

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Innovative Partnerships: There’s More than One Way to Build a Road

In the last posting for my featured Govloop series and Phase One Consulting Group’s “Transformation in the Federal Sector” blog, otherwise known as “jennovation”, I highlighted the major motivations for public-private partnerships. In the discussion resulting from that posting, it was clear that there was some confusion about what forms public-private partnerships can take. Are contracts and partnerships one in the same? Are grants a form of partnership? Furthermore, and more importantly, are all forms of partnership equally supported and scrutinized by the Government? There are many different forms that public-private partnerships can take. Figure 1 displays some of the partnership structures that are common depending on the degree of private and public sector involvement they require.

Figure 1: Types of Partnerships based on the Degree of Public and Private Involvement [1]

However, there isn’t a “one size fits all” partnership structure for similar service provisions. To illustrate that point, let’s look at two similar road construction projects that used very different partnership structures to provide a new transportation option for the public: The Dulles Toll Road Extension in Virginia and the I-595 Express in Florida.

Dulles Toll Road Extension (Virginia)

Now known as the “Dulles Greenway”, this road construction project kicked off in the late 1980’s, when a group of private developers proposed that a 14-mile road extension be built starting at the airport and ending in Leesburg, VA. When first proposed, the Commonwealth of Virginia did not authorize private roads to be built. So the coalition’s first stop was Richmond, where they worked with lawmakers to pass the Virginia Highway Corporation Act of 1988 that authorized private roads in Virginia.

In 1990, the $200 million project became the first private, for-profit toll road authorized in Virginia since 1816. But this was only after the Virginia Department of Transportation (VDOT) submitted a competing proposal for what a VDOT built, owned, and operated road would cost. One of the largest arguments for the public road was the projected toll costs over the 30 year life of the project. However after independent financial analysis scrutinized both proposals, it was found that the toll required to maintain the road would exceed $3.50 per car for BOTH options. However, the private option could be built much quicker. [2]

Readers from the DC area, ever wonder why the toll on that road is so “high”? Well folks, it’s largely because that road never would have been built without those tolls paying back the upfront construction costs and ongoing maintenance expenses. In this partnership, the tolls you pay, go back into the pockets of the private developers that paid to build the road.

In the end a road was built that required significant public oversight, but that was largely privately developed. The road opened for traffic in 1984 and is currently owned and operated by a private group known as the Toll Road Investors Partnership II. This example of road construction and maintenance was much more towards that bottom end of the spectrum—private involvement—in Figure 1.

I-595 Express (Central/South Florida)

Let’s fast forward nearly two decades. This roadway improvement project, including the construction of several express toll lanes, began in 2009 and is expected to be completed in the spring of 2014. The road construction project is being implemented as a public-private partnership between the Florida Department of Transportation (FDOT) and a private concessionaire—the I-595 Express, LLC (ACS Infrastructure Development)—to design, build, finance, operate, and maintain the roadway for a 35-year agreement term. This is particular type of concession contract, one of the partnership types listed in Figure 1. With this concession contract, the FDOT has more control over the roadway than VDOT does with the Dulles Greenway. Among its partnership responsibilities FDOT will: provide management oversight of the contract; install, test, operate and maintain all tolling equipment for the express lanes; set the toll rates; and retain the toll revenue.

But if the private company is not retaining the toll revenue, how are they profiting from this partnership? What’s particularly interesting about this road construction project is that it is the first U.S. application of availability payments to a transportation project. Meaning…

• “I-595 Express, LLC will receive no compensation from FDOT until the facility is fully operational. Upon FDOT’s final acceptance of the project construction, I-595 Express, LLC will be eligible to receive a series of annual lump sum final acceptance payments, including potential incentive bonuses for completing a series of interim milestones (related to major construction activities) within established contractual deadlines.”
• “Performance-based availability payments will be made monthly during the operating period of the project. A maximum availability payment of $65.9 million (in 2009 dollars) begins in 2014 and escalates annually. If quality and performance requirements stipulated in the contract as well as availability of the roadways to traffic are not met, then the availability payments will be subject to downward adjustment in accordance with the contract.” [3]

In this case, oversight of construction and operations are much stricter—as would be expected with a partnership that has MORE public involvement on the partnership spectrum. However, in both cases:

• road improvement projects are completed;
• private partners are crucial for financing the construction and operation; and
• private companies profit off of publicly used infrastructure.

Ultimately the end result would not have been possible without public and private sector involvement. Neither could have done it completely alone—though there were many options for HOW they could partner.

Hopefully these examples show that although the most common partnership arrangement are contracts and grants, that there are several other partnership “vehicles” that government’s have to produce public value. These options might just not be on their radar. As always, please feel free to reach out to me at any time during this series to continue to conversation.

Jenn

[1] Gustetic, Jennifer. A Framework for Understanding and Designing Partnerships in Emergency Preparedness and Response. Cambridge, MA: MIT Libraries, 2007. [2] Gomez-Ibanez, Jose A; Meyer, John R. The Dulles Toll Road Extension. Kennedy School of Government Case Program. 1995. [3] AASHTO Center for Excellence in Project Finance. I-595 Corridor Roadway Improvements. http://transportation-finance.org/projects/i_595_corridor_improv.aspx

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Don’t Go it Alone: Why Public-Private Partnerships Make Sense

Welcome to the second posting of my featured Govloop blog series—Jennovation—coming to you every other Monday. This series contains my musings on innovation, Open Government (Open Gov) and Public-Private Partnerships (PPPs). Let me start by saying, I was rather surprised by the comments on my first posting. While Gov 2.0, Open Gov and innovation have been hot topics recently, the majority of the comments on my first posting (both on Govloopand Phase One Consulting Group’s blog) focused on PPPs and the potential for partnerships. I am a HUGE PPP nerd/fanatic, so the fact the readers latched onto that topic and are asking for more information on that subject made me very, very excited. So, for the next few postings I’ll focus on PPPs with a pinch of Open Gov and innovation thrown in. Several comments from the community inspired this posting in particular, including the following one made by the International Consortium on Governmental Financial Management (ICGFM):

“There is a lot of concern about the impact of PPPs on government risk. (Notion that the government is on the hook for PPPs should there be failures.) It also tends to move expenditures off the balance sheet to give the illusion of fiscal discipline. And, there is the opportunity for PPPs to be used for short term budget balancing at the expense of future commitments. There have been some disappointing results in the UK. There is no question that the private sector has demonstrated certain efficiencies. These potential advantages must be weighed against risks.”

I couldn’t agree more that no partnership should be entered into without first weighing the benefits, costs, and risks. In my research [1], there are typically eight factors that drive the desire to partner or privatize:

1. Resources
2. Information
3. Productivity
4. Legitimacy
5. Cost-reduction
6. Risk-sharing
7. Introduction of competition
8. Accountability

Thus in theory, sharing of risk is one of the reasons partnerships emerge in the first place. Many services may not ever be provided if it weren’t for partnerships—since the risks would be too large for any one party to bear by themselves. In fact, one expertise of the private sector is to calculate how much risk should cost. Risks in large project or service partnerships can include completion risk, performance risk, market risk, economic risk, political risk, equity risks, and force majeure. “By partnering with the private sector, the Government is able to relieve the burden of carrying all those risks and shed some to the private sector who may be able to bear them more effectively. For example, the private sector is often more apt at bearing some forms of performance risk since their profit is directly tied to performance metrics.” [1]

The public sector and the private sector are driven by very different things. A partnership should leverage existing incentive structures to ensure that goals are uniformly pursued by all parties and that conflicting incentives don’t jeopardize results, as pointed out by the ICGFM. Fiscal discipline is often MORE of a motivator for the private sector than the government. “Whereas a private firm generally prospers by satisfying paying customers, a monopolistic public agency can prosper even if the customer remains unsatisfied. When a private company performs poorly, it tends to go out of business; when a public agency performs poorly, it often gets a bigger budget. Paradoxically, the budget can grow even as customer dissatisfaction grows; in this respect a rising crime rate is good for a police department, a housing shortage is good for a housing agency, and an epidemic is good for a health department.” [2]

Bottom line: Partnerships are complex and should not be entered into lightly. This goes for large-scale infrastructure development projects, event focused partnerships, and partnerships that focus on providing a specific service for periods of time.

Open Government and innovation focused partnerships are no different. Apps contests? Prizes to address our grand challenges? Enhanced collaboration to achieve Open Gov objectives? ANY partnership that is entered into by the federal government should be carefully considered. In addition to figuring out the motivators of each partner so the right risk sharing structure can be set up, the following questions are also crucially important for any Government agency to consider. (Beware: if you don’t have a best friend in your legal shop and you’re interested in setting up some partnerships, now’s the time to bake cookies for the 9th floor…)

1. Will the partnership require any resources (financial or human capital) to operate? If so, who’s contributing the resources? If a non-governmental organization is paying for anything at all (financial or in-kind) agencies will have to pay close attention to their gift authority. Can the agency accept gifts? Under what terms? Consult your legal counsel…
2. How does the partnership further the agencies mission? Appropriated resources (property, staff, and dollars) must further the mission of the agency.
3. How will the Government support to partnership from an advertising standpoint? There are VERY strict laws on what agencies and government employees can do with regards to endorsements and advertising. Consult your legal counsel…
4. What will be produced through the partnership? Who owns it when the partnership is completed? Negotiating intellectual property splits up front is critical to ensure each partner is getting what they expect out of the partnership. Consult your legal counsel…
5. What is the background of the potential partners? Are there any potential ethical, lobbying, or perception issues with particular partners? Consult your legal counsel…
6. Did you give other potential partners a chance to join the partnership? “Sole-sourcing” a partnership is often possible, but can jeopardize the legitimacy of the partnership, so allowing the breadth of possible partners to compete for the chance to participate is optimal. This area, in particular, is a space where new Gov 2.0 technologies have allowed partnership opportunities to become more open and have allowed more potential partners to step forward.

Partnerships have the potential to add a TON of value, but they require a decent amount of homework to do right.

Though this posting was a bit more research and background info oriented, in future postings I will highlight some of the really cool PPPs from yesterday and today (per Andrew Krzmarzick’s suggestion). As always, please feel free to reach out to me at any time during this series to continue to conversation.

Happy almost 4th of July!

Jenn

[1] Gustetic, Jennifer. A Framework for Understanding and Designing Partnerships in Emergency Preparedness and Response. Cambridge, MA: MIT Libraries, 2007.

[2] Savas, E.S. Privatization and Public Private Partnerships. New York, NY: Chatham House Publishers, 2000.

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Leveraging Innovation, Open Government, and Public-Private Partnerships to Create Public Value

Welcome to the first posting of the Jennovation blog series! As a featured blogger on Govloop, I will be posting every other Monday, beginning June 14, 2010, about my musings on innovation, Open Government (Open Gov) and Public-Private Partnerships (PPPs). But how to these three—seemingly loosely connected subject areas—relate enough to justify being lumped together? In my opinion, innovation, Open Gov and PPPs are some of the most effective means for the Government to maximize the public value it provides.

A great example of a government program that demonstrates embraces all three strategies is the Department of Education’s Open Innovation Portal. The Open Innovation Portal is self-described as “a collaborative community designed to identify, improve, and implement innovative solutions to educational challenges.”

How does it further Open Gov principles? This web-based portal embodies the principles of participation and collaboration by providing a gathering place for education stakeholders to participate in the problem solving process and identify opportunities to partner to create public value. The portal uses many web 2.0 functions, including allowing users to:

• Rate solutions and fellow members (think Amazon or eBay).
• Connect with other members (think Facebook or LinkedIn).
• Post classifieds to seek or offer services (think Craigslist).
• Earn points for participating (think loyalty programs).

How does it encourage and leverage PPPs? The Open Innovation Portal allows PPPs to assemble based on common ideas and needs to provide value to the education community. Through the ideation functionality, the best ideas float to the top, where they attract the attention of other innovators, potential funders, or contributors of in-kind resources.

How does it encourage innovation? The Portal allows members to post challenges relating to education, ask questions relating to challenges, contribute helpful comments on challenges, and rate other user’s ideas. The discussion helps innovators improve the quality of their ideas, for submission to other Portal challenges or external grant programs. “The Portal is itself an innovation in education.”

However, all government programs need not utilize components of all three strategies to create value—it’s just extremely cool and forward thinking when they do. Throughout this series I will strive to create a variety of postings that:

• Inform readers of academic and practitioner research in innovation, Open Gov and PPPs;
• Share my opinion on to how to most effectively drive these practices in the Federal Sector and overcome obstacles to their acceptance; and
• Stimulate conversation by identifying hard situations/questions and providing an opportunity for crowd sourced solutions.

Also, as an innovation and Open Gov advocate, I believe in the value of ideation for identifying problems, issue areas and topics that might not be on my radar—but are on yours! In the spirit of acknowledging what I don’t know, I’d also like to ask you, the reader, to feel free to reach out to me, at any time during this series, and request a blog posting on a specific topic in these subject areas. I’ll do my best to work with you to identify interesting spins on the topic, research the topic fully, and share our collective thoughts in this series—even co-author if you’d like. To make this series as rich as possible, I’m committed to adhering to the principles of transparency, participation and collaboration in its creation.

To kick-off the series, I’ll ask a simple question: How do YOU define Innovation, Open Government and Public Private Partnerships? For this series, I am starting with the following definitions/scope. What do you think?

• Innovation: “Fundamentally, innovation is the development of new products, services, and processes.” [1] Following Schumpeter, contributors to the scholarly literature on innovation typically distinguish between invention, an idea made manifest, and innovation, ideas applied successfully in practice. [2]
• Open Government: “The three principles of transparency, participation, and collaboration form the cornerstone of an open government. Transparency promotes accountability by providing the public with information about what the Government is doing. Participation allows members of the public to contribute ideas and expertise so that their government can make policies with the benefit of information that is widely dispersed in society. Collaboration improves the effectiveness of Government by encouraging partnerships and cooperation within the Federal Government, across levels of government, and between the Government and private institutions.” [3]
• Public-Private Partnership: “A partnership is a collaboration among business, non-profit organizations and Government in which risks, resources and skills are shared in projects that benefit each partner as well as the community”. [4] Furthermore, Donahue and Zechauser define PPPs/Collaborative Governance as the “pursuit of authoritatively chosen public goals by means that include engaging the effort of, and sharing discretion with, producers outside the Government.” [5]

The goal of this blog series is to demonstrate how these methods can be used in combination to maximize the value that the Government provides to the citizen. Looking forward to discussing these exciting subjects with you!

[1] The White House’s “A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs”, page 4. [2] Schumpeter, Joseph (1934). The Theory of Economic Development. Cambridge, MA: Harvard University Press. [3] The Open Government Directive [4] Osbourne, Stephen P., ed Public Private Partnership: Theory and Practice in International Perspective. London, UK: Routledge Advances in Management and Business Studies, 2000. P 11 [5] Donahue, John and Richard Zechauser, “Public Private collaboration” “Oxford Handbook of Public Policy. Ed. Robert Goodin, Michael Moran, and Martin Rein. UK: Oxford University Press, 2006. P 430

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog for a special featured Govloop series when I was an employee there. www.phaseonecg.com/blog)

Lessons for Driving the President’s Innovation Agenda through Prizes and Competitions

On April 30, 2010, over 200 public and private sector participants convened at the Department of Housing and Urban Development to think big about how the Government can learn from the emerging trend to use prizes and competitions to solve some of the grand challenges of our time. This event, led by Robynn Sturm from the White House’s Office of Science and Technology Policy, built on the President’s Innovation Agenda and the Open Government Initiative by stressing some key concepts:

• We have an opportunity to identify and scope problems and national challenges like never before;
• There are many ways – some traditional and some relatively new – to identify a variety of possible solutions to those challenges;
• The process employed to develop those solutions could lead to innovations that have never before been possible; and
• The government has an opportunity to strategically leverage the principles of Open Government (transparency, participation and collaboration) to drive and support these innovation efforts.

Throughout the day, an impressive lineup of thought leaders and practitioners shared their expertise and knowledge about these core concepts—some far-reaching and some refreshingly practical—with the Government-focused audience. With a waitlist as long as the attendance list, the event was structured to capture knowledge for the folks that couldn’t attend through liveblogging, tweeting, webcasting, and content repositories. Beth Noveck and Aman Bhandari liveblogged on the keynote speakers’ presentations and the lunchtime interview with Vivek Kundra, the US Chief Information Officer. Several attendees tweeted throughout the day under the hashtag #opengov. The Case Foundation, co-sponsors of the event, provided live webcasting on their Promoting Innovation webpage, from which they will generously provide all the materials and video from the event.

Already, attendees are beginning to share their impressions of the event. Micah Sifry, the co-founder of the Personal Democracy Forum, captured his thoughts in a blog post on prizes, challenges and government innovation. In that spirit, this post summarizes some of my key take-aways from attending the event. In addition, I would highly recommend that you take the time to read through the resources listed at the end of this posting—they are invaluable to understanding the President’s vision for innovation, the potential for prizes to drive innovation in government, and the linkages between innovation and Open Government.

I took several important lessons from Jonathan Bays, a Consultant in McKinsey & Company’s Social Sector Office and one of the keynote speakers, including:

• Prizes don’t need to be monetary or recognition-based. McKinsey’s report on prizes describes six different types of prizes that create value and change.
• There are many reasons why prizes work; it’s not just the money. Goal, Glory, Guts, and Gold all motivate participants.
• A surge in capital has become available for prizes over the last decade— at an 18% growth rate per year. With more funding comes an increasing opportunity to leverage these methods to solve more problems.
• Prizes can and should be combined with other traditional funding mechanisms (like grants and contracts) if the problem solvers can’t accept all the risk associated with pursuing a solution. For example, the targeted use of grants can push possible solvers through the proof of concept phase.
• Prizes are only part of the “portfolio of actions” directed at the overall aspiration. After the challenge/competition is conducted it is critical to continue to build the legacy and reinforce the impact.

The first keynote speaker, Peter H. Diamandis, the Chairman and CEO of the X Prize Foundation, also shared some important observations about the value and operation of successful prizes:

• Prizes have the potential to apply a significant multiplier to the initial investment. Peter has observed that prizes incentivize the investment of resources at a rate of 10-40x the prize amount. For example, the teams that competed for the $10M Ansari X prize collectively invested over $100M in their efforts.
• Prizes reinvent philanthropy and procurement by changing the paradigm about how much value can be created for each dollar invested. Many non-profits are accustomed to a 30-cent return on the dollar, whereas prizes have a multiplier effect.
• Great prizes that aim to expose solutions to grand challenges require a long term commitment. Some of the most revolutionary prizes have taken 3 to 8 years to demonstrate progress.
• Visionary prizes grow industries by mobilizing capital, encouraging the definition of multiple viable solutions to problems, encouraging those solutions to be brought to market and compete for business, and creating profit and jobs.

The great challenge for the audience that attended the event on Friday is to translate those lessons into a viable approach for the government to strategically leverage the potential of prizes. The federal government faces many unique challenges in this space:

• The vast majority of agencies’ authorized funds focus on contracts and grants as the primary means for partnering with non-governmental entities. Over $1 Trillion is authorized for grants and contracts in the President’s budget, with only a small fraction of those funds able to be used for innovative means, such as prizes and competitions.
• Many agencies lack the partnership authority to create the optimal arrangement of public and private partners to tackle their most pressing problems.
• The default problem solving mentality of the government focuses on leveraging internal expertise and resources, grants, contracts and/or other formal arrangements. Prizes are not typically considered as a viable option.
• Federal employees are neither empowered to nor tasked with identifying and managing innovative ways to partner and solve problems.

Despite these challenges, this is an extremely exiting time for the federal government. This is a time where innovation, public-private partnerships, and technology solutions are creating a perfect storm for generating huge leaps in solving the grand challenges of our time, including: energy and the environment, development and human rights, transportation, health, education, exploration, and life sciences. We have the opportunity to inject disruptive thinking into the way the government organizes to deliver results. The White House is committed to helping the federal government overcome its challenges, leverage lessons learned and best practices from the private sector, and identify new opportunities for innovation. In fact, Beth Noveck closed the event by announcing that a new community of practice, led by the White House, will be formed around this topic to keep the conversation/inter-agency collaboration going.

We look forward to joining that dialogue and helping to move the Innovation Agenda forward.

Key Resources:

• The White House’s “A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs”
• OMB’s “Open Government Directive”
• McKinsey’s “And the winner is…: Capturing the Promise of Philanthropic Prizes”
• Knight Foundation’s “Information and Communication Contests: An Analysis”
• OMB’s “Guidance on the Use of Challenges and Prizes to Promote Open Government”

Examples of Innovation and Prizes in Action:

• Department of Education Innovation Portal
• Ashoka’s Changemakers
• XPrize Foundation
• Apps for Democracy

(Note: Originally posted on the Phase One Consulting Group, Government Transformation Blog when I was an employee there. www.phaseonecg.com/blog)