To Create A Strong Government Technology Ecosystem, Increase Inclusivity

State and local governments should become a critical force in requiring that the ecosystem of innovators, investors and others working in government technologies grows more inclusive.

It’s obvious that this pressure is needed. Just 2.7% of all U.S. companies receiving venture capital had a woman CEO and only 0.2% of venture capital goes to African American women.

Whether it’s addressing the concerns of protests against inequity and police violence, increasing resilience and recovery in the face of extreme weather events or meeting the increased demands on government services even as budgets plummet during this global pandemic, state and local governments are being forced to make some dramatic changes. Technology solutions are increasingly helping government leaders address these challenges and those involved in the government technology sector need to reflect the inclusive future local governments are striving for. 

The government technology ecosystem includes governments and startup companies themselves, as well as accelerators, investors, nonprofits, foundations, research institutions and established companies who support and sometimes acquire startups. In Portland, Oregon, for example, the Smart Cities PDX program is bringing government, private sector partners and community organizations together to use data and technology to improve people’s lives, primarily in underserved communities. They do this by collectively identifying priority challenges and piloting technology solutions for projects like air quality, open data, and traffic sensors—all within a governance structure with an explicit mandate to live up to values of inclusion.

Leaders in state and local governments are starting in a strong position to lead a more inclusive government technology sector. For one, local governments are already some of the most inclusive organizations in any community. Further, they are tasked with serving all communities that they represent. Compared with many private-sector organizations that serve target markets based on profit-driven strategies, local governments are mandated to ensure all are reached with their services. In this sense, government technology startups are often working toward greater equity by default of aligning with the goals of serving local governments’ diverse residents. Finally, many state and local governments have internal directives and mandates to preferentially consider minority-owned, women-owned and veteran-owned businesses through procurement strategies, which can give key early onramps for young companies led by underrepresented entrepreneurs.

In all areas, governments can serve as an important first mover and hub to get the initial players together to start forming a strong government technology ecosystem, either through its convening power, directly providing important resources to entrepreneurs or creating incentives for participation through the procurement reforms mentioned below. Ultimately, this all helps local governments improve the ways they are serving their residents through technology. But too often, we spend our time telling governments how to change, without looking at the wider ecosystem. 

In this moment of crisis, when local governments are expected to do more with less, the wider government technology ecosystem reflects the same overwhelmingly white and male culture of startup and technology worlds and can learn a lot from government inclusivity.

CivStart’s first Frameworks report identified five initial areas where change is needed, from actors across the ecosystem. Changes that can immediately begin to be implemented across the entire ecosystem by partners dedicated to inclusivity:

1. Government can be a better customer. Government is clearly a key player and has its part to play. This can mean adopting challenge-based procurement models, offering paid pilot programs as an onramp for startups, relaxing or removing restrictive procurement rules for formerly-incarcerated people, facilitating and supporting networking opportunities and a wider entrepreneurial ecosystem, as well as partnering with govtech accelerators. Governments should also build a front door for businesses they work with, improve cross-department coordination on purchasing and enhance internal technology education.

2. We need to provide support and resources to diversify our entrepreneurs. Underrepresented entrepreneurs often lack the same access to family and friend networks who can provide in-kind services and support, let alone capital investments. All ecosystem partners need to prioritize these wraparound services, targeted to underrepresented entrepreneurs, to make entrepreneurship an option for a wider range of people.

3. Governments are low-risk purchasers. We need ways to de-risk govtech innovations. Smaller-scale proofs-of-concept, partnerships between accelerators and governments, and foundation and investor support for pilot programs can all help address the legitimate concerns governments have about potentially risky new technologies.

4. People invest in their networks. We need more diverse investors and more diverse networks. Investors are even more overwhelmingly white and male than startup founders and their investments reflect this. Investors can diversify their own staff and partners, conduct their startup search and recruitment practices with an inclusivity lens, and support the existing investor institutions that already specialize in supporting underrepresented entrepreneurs.

5. Innovation can be supported from within state and local government. As mentioned above, governments are already leaders in diversity and inclusion. They can leverage this asset by creating and promoting internal innovation teams, creating processes for internal innovations to spin out into businesses that can benefit local governments across the country, or even consider providing low-interest loans or other investments in the underrepresented entrepreneurs in their own diverse communities.

With concerted effort and smart, coordinated actions across the govtech ecosystem, we can ensure that we are putting technologies to use toward addressing the needs of local governments and the communities they serve in a more inclusive way. This, hopefully, will also create better, more inclusive, local governments on the other side of this crisis.