Beyond geeks and governments: Expanding the civic marketplace

Beyond geeks and governments: Expanding the civic marketplace

Editor's note: To learn more about civic marketplaces and innovation, be sure to check out VERGE@Greenbuild, coming this fall to San Francisco, November 12-13, 2012.

Shannon Spanhake is looking for a few good geeks -- and the companies that love them.

The deputy innovation officer for the City of San Francisco says that companies can play a role in shepherding the widespread application of citizen-led tech solutions in an era of shrinking public resources.

An inventor and entrepreneur herself, Spanhake is working to stimulate innovative solutions from an increasingly engaged tech community and civic hackers interested in coding for the common good.

“There’s a natural relationship in strengthening this market possibility,” she said during the “Optimizing City Services with Data and IT,” the third segment of the Cities 2.0 three-part webcast sponsored by GreenBiz Group on Wednesday. 

Since passing the first open data law in the U.S. in 2010 -- which asked all city agencies to make reasonable efforts to publish their data sets ranging from crime to street inspection results to reports of graffiti -- San Francisco has encouraged its thriving community of hackers and entrepreneurs to use this data and develop apps or other products for civic good through regular hackathons. Today, there are 200 data sets to choose from.

Applying market mechanics

Ranging from apps that can locate elusive parking spots to ones that assess the amount of solar that can be generated at any location, these open source hacks have improved the quality of life for residents. Over 70 apps are available in the city’s catalog.

Still, Spanhake says gaps exist in this civic marketplace – and that companies are uniquely poised to fill them.

Jen Pahlka [the founder of Code for America] points out that cities have large IT budgets. If you add them all together they can compete with something like the gaming industry, so there is a market opportunity here,” she said.

“Hackathons have been traditionally considered part of this DIY or maker culture,” Spanhake added. “But interestingly, if you apply market mechanics to the hackathon, it reveals that there is a path to market.”

Photo of futuristic rendition with code provided by nmedia via Shutterstock

Configuring products for the city

“There’s an opportunity for product acquisitions,” Spanhake said. “When we procure services, they have to be from large companies, and often times those solutions were made for the private sector and have to be configured for the public sector,” she said.

Civic apps -- solutions tailor made for cities -- won’t have that problem.

But with today’s crunched municipal budgets, Spanhake says, it would be cost prohibitive for a city to acquire these solution-based services for its use alone.

Enter the company, then. “It’s hard for a city to take a risk on a startup, but large companies aggregate risk differently,” she said. “They can see that as an investment in a way that a city can’t.”

Spanhake’s office is exploring how to address the problem from its end through reforming San Francisco’s procurement policy.

Companies already have vendor relationships to cities across the world already, she added, as well as sales pipelines and project infrastructure.

Towards a future of citizen producers

Learning how entrepreneurs can shepherd a concept emerging from a hackathon idea to prototype is San Francisco’s next challenge, Spanhake said.

“How do we pull together the right partners?” Spanhake asked. “What does the ecosystem look like to really start to transform those concepts to prototypes that can be pitched to venture capitalists -- or [brought] to market for product acquisition?”

In order to optimize city services in a time with extreme fiscal constraints, Spanhake said, the traditional notion of partnerships must be expanded to “public private people” partnerships. As urban populations increase, cities can tap those added residents to help them solve civic problems.

What’s key, Spanhake concluded, is that citizens need to be transformed from consumers into producers.