When it comes to technology and strategy, government is often behind the times, and far behind the most innovative businesses. It's slow-moving, risk-averse, and subject to many electoral and legal constraints.

Cities, on the other hand, move much faster. That was the subject of a recent panel hosted by SAP and the Brookings Institute, what Sean O'Brien, the Global Vice President Of Urban Matters and Public Security at SAP called the "secret sauce" of the best-run cities.

Part of cities' success in innovation is building partnerships with large businesses. For example, SAP Urban Matters just announced a partnership with Boston to bring advanced enterprise software and analytics into the government.

The fact that two of the panelists, Bill Oates of Boston and Chris Moore of Edmonton, serve as the Chief Information Officers of their cities shows how far we've come.

The massive trends that define business right now — mobility, engagement, big data, and innovation — in the face of economic hardship are defining our most innovative cities, and it's going to change the way we live.

Engaging people through their smartphones

For corporations, the challenge is engaging employees and customers; for cities, it's engaging everyone who lives there. Services don't work when people don't or can't request them, and giving them easier avenues to do so can be a game changer.

Just like businesses, cities are using mobile applications to do this. Boston takes it one step further, publishing requests to get the community involved and to make the government accountable.

"We rolled out our first mobile application, Citizens Connect, back in 2009. It's not revolutionary now to find mobile apps that help you report a pothole or a streetlight, but back then we did it with a little twist," Oates said. "We didn't create that application purely to connect the citizen to city government; we also made sure that that individual was publishing their request ... to the community."

Oates told a story about a citizen who reported an animal at the bottom of a trashcan using the mobile app. Another citizen saw the request, released what turned out to be a possum, and tweeted the results back to the city.

The investment in the app has paid dividends. "We now take 20 percent of the service requests through that mobile channel," Oates revealed.

And just like a corporation, cities are using those apps to get data and improve services. "This data of who's reporting and where they are and how quickly we respond and all of those things are important data elements for us managing the city more effectively," Oates said.

Facebook games and interactive community meetings

One of the hottest new trends in business is gamification. It's only in its early stages even among cutting-edge companies, but cities are already starting to adopt it very rapidly, as Edmonton CIO Chris Moore explained.

"In the new year, we're launching a Facebook game around traffic and safety," Moore said. "Our Office of Traffic and Safety has been working with a local company that does games."

Though Moore claimed Edmonton's drivers are quite courteous, they can always do better, and games are effective because they have an element of competition that makes them compelling, and rules that make them easy to engage in.

Moore thinks that the possibilities extend far beyond the one Facebook game. "If we can think about how to think of our cities as games — not making light of them or making them juvenile, but approaching them like a game — we would bring a whole new level of conversation," Moore argued.

Another part of gamification is providing incentives and rewards for desired behavior. According to CIO Bill Oates, Boston has tested a very innovative approach to the sometimes ineffective community meeting.

We've played with a pilot of a project called Community PlanIT, which actually comes out of the work of a professor at Emerson college," Oates said.

"The issue here was how community meetings can run well. Very often the end result is not where you'd like it to be," Oates said. "What Community PlanIT does is use some level of gaming to educate people on what the issues really are. Sometimes at those community meetings you have some people who understand the issue and a whole bunch who really don't, and they're just listening to banter back and forth. It rewards people who are learning things and contributing. It gives them an ability to use what they've learned to now vote on some of the alternative solutions that may come up."

The program is already in use in Philadelphia and other cities.

Saving taxpayer money by consulting for other cities

Cities are notorious for being money sinks, running deficits, and raising property taxes, more than for finding new and innovative ways to make money. Innovative cities are finding ways not only to develop expertise for their citizens' benefit, but to use it to help other cities and ease the tax burden on citizens.

"One of the things we're doing, in January, we're actually opening an office in Beijing to provide consulting services on waste management," Edmonton CIO Chris Moore said. "When was the last time you heard of a city setting up a separate corporation in another country?"

"We're doing it because we want to be helpful," Moore said, "But there are alternate sources of revenue and we can't keep running the whole organization just on the property tax."

Edmonton's power and water corporation EPCOR owns and operates systems in the U.S., and brings its profits back to the city.

"The best run cities are cities that want to innovate and share their expertise and turn that into new opportunities," Moore argued.

Getting the best out of city employees

Taking big bets on innovation is risky. It's something even businesses find difficult, and it's not generally a hallmark of cities. "You see lots of incremental change but you don't see a lot of real game-changing things happening," Boston CIO Bill Oates said.

But if organizations want to make big changes, they have to have a place to do it and absorb that risk, which is exactly what Boston's doing.

"We created the Office Of New Urban Mechanics," Oates said. "It's a place for us to experiment. We source ideas. We take some of those ideas and we pilot them, we create products and services — new ways to approach old problems — and the ones that work, we find ways to scale. And we've been able to successfully make those things scale across the city of Boston."

"Finding the innovators in large organizations is a big management challenge, and Boston's tackling it within a city," Oates said. "There were great innovators in lots of different departments around the city not knowing where they could go with an innovative idea. That's not a challenge anymore. They know where to go now. So our pipeline of innovation gets stronger."

Less bureaucracy and more leadership

Businesses spend a lot of time developing their culture, ensuring that it fits a certain set of values, and promotes productivity and innovation. Edmonton's actively trying to form a culture that's less like traditional government, and more like flatter companies such as Google.

"One of the things we're focused on right now is transforming our culture," Moore said. "And that's happening from the administration and leadership saying that we need to move away from being a hierarchical command-and-control, mission-based organization to an organization where the smart, mature professionals just do things based on leadership principles."

Changing culture in IT is particularly important as new technology emerges. "I felt IT in local government was not sustainable and had to change," Moore said. "Some of the most challenging people to make that shift are the IT people because we've been doing IT for 60 years and had it all figured out."

Crowdsourcing ideas and apps from citizens

One of the great advantages of Facebook's business model is that nearly a billion people provide its most valuable asset — their personal data — for free. Cities are doing something similar by putting data out there, and letting their citizens produce apps and do research for them.

Boston CIO Bill Oates says that making data available to professors who want to do research, or entrepreneurs who want to create apps is a big part of how the city tries to engage with its citizens.

Edmonton CIO Chris Moore has seen some real return on the strategy. "We did an apps competition in 2010," Moore said. "We had 34 apps made for $50,000 dollars. Don't ask me what the ROI was on that because I never calculated it, but what I do know is that I probably would not have spent $50,000, it would have cost me that much just to create a business case to do it ourselves, when there are people out there who can do it."

Using a city's unique attributes to compete globally

According to panelist Bruce Katz, who runs the Metropolitan Policy Program at the Brookings Institution, trade is the most important thing for cities. As he put it, "What matters, particularly in this country post-recession, is to what extent is your city making things or providing services that are being sold within the United States and being sold abroad."

To grow that, cities have to focus on what makes them unique. Some cities, by virtue of where they are, who lives there, and what resources they have, are going to be better at certain things. Just like corporations, they can drive the most value by focusing on them, on their sources of competitive advantage, and using technology to leverage that.

"You can go to Phoenix, you can go to Pittsburgh, and a Walmart is a Walmart is a Walmart, and a housing subdivision is a housing subdivision," Katz said. "But when it comes to what makes Pittsburgh special and what makes Phoenix special in the global economy they're highly different."

By way of example, Katz described how Michigan is bringing student engineers to its manufacturers. "The most interesting thing I've seen recently is a matchmaking platform out of Detroit, where they basically have engineering students in the Michigan Universities write on the web, 'Here's the kind of internship I'm looking for in the state of Michigan or the Detroit metropolis,'" Katz said. "Then they have companies basically, separately, decide what kind of intern they're looking for. It's like eHarmony for engineers."

Another key is realizing that cities are networks, as Katz said, they're "co-produced and co-governed" by a combination of state and federal government, and the many private businesses and institutions that surround them.

According to Katz, the smartest cities are those where the several governments, Universities, institutions, and businesses are acting together with some "clarity of purpose."

"It's really trying to build on their distinctive special assets, not trying to be the next Silicon Valley but to be the best 21st century versions of themselves," Katz argued.

They're driven to innovate by the debt crisis

Many businesses came under significant pressure during the financial crisis. That's been even more pronounced in government, after years of overspending, which has pressured cities that are trying to innovate; you can't do much when you don't have the basics.

But according to Center For Technology In Government Director Theresa Pardo, it's also brought out the best in some places. One of the governments she worked with faced a particularly bad budget crisis. The budget crisis that they're facing incentivized them to bring 20 people into a room together to say, "we need a plan," Pardo said. "We need to think differently about how to operate because of the budget crisis. And they're incentivized to do that because they see what's happening around the world. They see cities doing things right in the heat of one of the worst economic situations that they've faced."

Becoming more transparent

For cities, citizens are investors. They've made the choice to live somewhere, and invest their tax and consumption dollars in that city. So just like corporations are transparent for their shareholders, cities are making themselves open to citizens.

"For us, open is a strategy — it's not open data, it's being open," Boston CIO Bill Oates said. "And we believe that government isn't about providing data, government's about providing results and so that's how we think about this."

"Maybe you're a watchdog and you want to check the performance side," Oates said "So come to our Boston.Results site and you'll be able to drill in very transparently on how our departments are meeting their metrics and their key performance indicators over a period of time, and this is what we power with SAP's Strategy Management Tool."

Moving away from paper and towards big data

Anyone who's spent too long on line at a DMV or filled out an endless paper form knows that city governments have a long way to go. But they're making a real effort to catch up.

"I think organizations like ours are just scratching the surface of the big data issue. Boston CIO Bill Oates said. "Part of it is some of that data is still challenging to get to because as folks who run IT organizations that work with our different agencies, still find paper-based processes and antiquated systems, and we continue to create a maturity there."

"We're still kind of small-data in my mind in terms of the city," Oates said. "But being able to now connect that data with some of the real big data out there in the world — maybe it's coming from the academic institutions or private sector companies — I think the opportunity for us in city government is to be much more proactive about how we deliver our services, I think there's just a huge opportunity, making sure that we have the technology that can take big data and do the processing and have mature software around it that can do those things effectively."

Cities have a unique opportunity to innovate, and they're incredibly important to the U.S. and global economy. These are trends that are still in their infancy, and as they grow, they're going to change the way we live in, and interact with, the places that an increasing share of the world's population are moving to.

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