Are Cities Walking the Startup Walk? Part 1: The Global Innovation Scan

Cities look to innovative solutions to face urgent issues like social cohesion, economic development, transportation and climate change. Mayors and city leaders have pledged to both innovate and buy more from small business, but are they walking the walk?

To answer this, Citymart has tracked procurements in 281 cities in the US, Canada, UK and Ireland to provide a comparative view on how accessible and open cities are to small business and their ideas. Our data cover procurements run by 510 government agencies.

In the US, we have gone one step further. We apply our “SBAS — Small Business Accessibility Score” to the 93 procurement portals used by 56 major US cities to establish how easy it is for small businesses to discover opportunities, highlight best practices and areas for improvement.

City Procurement: The Global Innovation Scan

We measure innovation in procurement because it speaks to both how governments are modernizing as well as the opportunities they create for more diverse vendors. We know that start-ups and small business prefer procurements that offer flexibility on how to deliver a service or encourage new ideas. So we looked at every procurement published by cities and counties in 2019 to count procurement opportunities that matched our “innovative” criteria.

Our data allows us, for the first time, to compare innovation activity across countries. In absolute terms the US is leading with 470 innovative procurements making it by far the biggest market. Yet, adjusted to population size, the UK and Canada are twice as active, indicating a significantly more robust adoption of innovation in government.

These differences are even starker when we looked at the percentage of procurement transactions we deemed innovative in these countries — the UK is nearing 1% followed by Ireland at nearly 0.5%, Canada at 0.3% and the US at 0.2%.

Procurement innovation is a complex web of behaviors, policies and structures but a few differences strike us as possible causes for these differences:

• The Canada, Ireland and the UK each have a single, national portal listing all public procurements. By contrast, in the US you need to enter 93 procurement portals to keep track of opportunities in just 56 cities. A single public portal makes it not just easier for vendors, but also for public servants to learn from peers, find state of the art examples and have their opportunities discovered by innovators to advance their game.
• The UK appears to be reaping the dividends of its concerted national procurement reform effort around a shared vision and best practice. Today, every local government has a multi-year procurement strategy, and valuable new skills like “strategic commissioning” have become pervasive across the country.

Key Take Aways — Global Innovation Scan

• New York City is the leading city in absolute terms, with 14 innovative procurements published in 2019, followed by Austin and Boston each with 12.
• Innovation hotspots: South Lakeland District Council, Boston and Vancouver are the leading innovators adjusted to their population size.
• UK first to reach 1% of public procurements that can now be categorized as innovative — compared to 0.5% in Ireland, 0.3% in Canada and 0.2% in the US.
• US is the leading market with 470 innovative procurements in absolute terms, followed by the UK (127) and Canada (63).
• Transportation drives the innovation game with 20% of innovative procurements, followed by energy, infrastructure and government operations at around 8% each.
• Consolidation of innovation activities is much higher in the US where just 127 cities published innovative procurements. Adjusted to population size, we have found about three times as many local governments publish innovative procurements in the UK, Canada and Ireland.

For updated reporting, visit the original report posted on Citymart.