Detroit in Early Stages of Building a Civic Innovation Economy, Says New Innovation That Matters Report

Friday, May 15, 2015 - 10:00am

In a Turning Point for Detroit, Growing Emphasis on Civic Entrepreneurship as Engine to New Local Industry

DETROIT, MI— According to the new Innovation That Matters report, Detroit is in the early stages of building a civic innovation economy and is demonstrating a new focus on civic entrepreneurship as the engine to new local industry. The city’s strong talent pool is also seen as an important asset to leverage for future progress. The report, released today by 1776 and the U.S. Chamber of Commerce and its Foundation, is a first-of-its-kind study on the state of civic innovation in eight leading American cities.

Detroit is a “nascent” market for civic innovation, indicating that it is in the early stages of developing a strong environment for growing and scaling civic innovation, propelled by a new focus on civic entrepreneurship, according to the new findings. The report also identifies the city’s talent base as its strongest asset, and a key foundation from which to drive future growth, while highlighting several areas of progress that are necessary to making Detroit a base for civic entrepreneurship.

Over the last six months, 1776 and the U.S. Chamber traveled the country to hear firsthand what is working and what is not as cities build healthy and vibrant startup communities in key civic sectors, such as education, energy & sustainability, health and cities. The report also evaluates how cities can empower startups to work with established corporations and government agencies to foster growth.

“Building and sustaining a vibrant civic entrepreneurial culture is key to empowering cities to tackle civic challenges and drive new economic growth,” said 1776 co-founder Donna Harris. “In collaboration with our partners at the U.S. Chamber of Commerce, we visited Detroit along with seven other leading cities to assess how well cities are empowering local civic entrepreneurs. The report indicates that Detroit, while still in the early stages, shows promise, and it provides the city with a roadmap for future success.”

In addition to Detroit, the report examined how Austin, Boston, Chicago, New Orleans, New York, San Francisco, and Washington, D.C. have fared in spurring civic sector innovation and creating strong innovation economies. To come to these findings, 1776 and the Chamber surveyed local civic entrepreneurs to get their take on the development of Detroit’s innovation economy, and conducted a series of eight roundtables with investors, elected officials, corporate partners and business leaders from Detroit to gain a broader stakeholder perspective.

“Entrepreneurship is a path to addressing some of Detroit’s biggest civic needs and driving a new source of economic opportunity,” said Detroit Regional Chamber President and CEO Sandy Baruah. “This project provided a useful spark for groups learning to better communicate and collaborate.  Government, business and start-ups need to come together and catalog what we’ve done right and outline what new steps are needed to spur Detroit’s innovative economy.”

Click here to download and read the report in its entirety.

How Detroit Fares

Based on the feedback from local entrepreneurs and local stakeholders, the report classified each city in one of the following four categories: Nascent, Emerging, Established or Leading, based on the city’s progress in cultivating an environment that fosters civic entrepreneurship in education, energy & sustainability, health, transportation and cities.

Detroit was rated a “nascent” market, with the city’s talent pool—both its existing workforce of STEM professionals and a recent influx of tech entrepreneurs—seen as an important asset the city can leverage as it continues to build a civic innovation economy. But several key areas of improvement remain, including building and activating a network of support for civic entrepreneurs across the city’s civic, business and venture capital community.

Local stakeholders interviewed in the roundtable discussions identified a new focus among local leaders on civic entrepreneurship as a pathway to creating new local industry as the driving force behind Detroit’s growing civic entrepreneurship market. Leaders referred to this development as a potential turning point for the city.

“We’re at a tipping point,” said Paul Riser of TechTown Detroit. “We’ve seen a fair share of challenges and a lot of that is behind us. People are seeing unique things happening in Detroit and want to be on the cusp of the rise.”

National Insights

In its overall findings, the report identified the five keys to success for promoting a vibrant civic innovation economy:

  • Establish System Connectivity – Connect the dots between startups and city stakeholders to help create a collaborative community
  • Embrace the Friction – Allow conflict and competition to flourish as a necessary complement to collaboration, in order to create more effective and dynamic solutions
  • Build the Market – Open opportunities for startups to propose and create new solutions to the existing needs of civic institutions
  • Turn the Lights On – Partner with startups to create information that reveals what is already happening within civic institutions
  • Unlock Hidden Capital – Build avenues to better channel communities’ existing wealth toward startup activity

Among the additional key insights, the report found that cultivating diverse networks of entrepreneurial, civic, business, municipal, and community leaders who are interested and engaged in helping startups grow and scale is a critical component of promoting local civic entrepreneurship. The more robust a city’s network of support for startups and the more proactive city leaders are in bridging and activating stakeholder relationships, the further along a city will be in its development of a civic innovation economy.

The report also found, however, that none of the eight cities have fully leveraged local institutional and corporate networks on behalf of civic entrepreneurs, an important ingredient to entrepreneurial success. Entrepreneurs in each city revealed that local civic institutions—civic sector service providers ranging from schools and hospitals to utilities and local governments—and local corporations are the entities with which they have the least engagement.

Moreover, the report shows that each city starts with the most important commodity for growing a vibrant civic innovation economy: a strong talent base. From traditional tech talent and STEM workers to large teacher and healthcare workforces, each city has significant numbers of local residents who, if mobilized, can help drive innovation in their industries and promote new entrepreneurial initiatives.

In addition to the city insights, the “Innovation That Matters” report contains key industry insights cities should consider when trying to drive innovation in the four civic sectors the report covers. Among the critical takeaways in the four sectors:

  • Education: Schools can do a lot to cultivate more effective Edtech startups by proactively communicating to entrepreneurs what they actually need
  • Energy: Energy consumers benefit from competition in the energy market, so cities should embrace that friction, not fight it
  • Health: Health startups will sink or swim based on their ability to reach and empower consumers, so cities should support their outreach efforts and bridge connections to major health institutions in their market
  • Cities: To drive innovation in city government, local leaders must help mobilize the marketplace by issuing challenges and partnering with startups to create new products that improve city services. 

“We hope cities will take this report and use it to inform their policies and strategies for driving civic innovation,” said Evan Burfield, co-founder of 1776. “The promise here is clear: create a robust infrastructure of support for startups, and they will unleash the kind of innovation that will solve civic challenges, grow economies and improve lives.”

ABOUT 1776

1776 is a global incubator and seed fund that helps engineer the success of the world’s most promising startups tackling important challenges in areas like education, health, energy & sustainability, and transportation & smart cities. Just two years old, 1776 has helped more than 250 startups grow by vetting their viability and connecting them to a “swat team” of support, from investors to mentors, government officials, and institutional market partners that they need to succeed. By creating a global community of startups, mentors, partners, and investors, 1776 is proving that its unique approach to incubation can create a sustained cycle of innovation that connects existing enterprises, corporations, and government entities to the startups that are solving the world’s biggest problems. Visit http://www.1776.vc or @1776 on Twitter for more information.

ABOUT the US Chamber of Commerce

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

ABOUT the US Chamber of Commerce Foundation

The U.S. Chamber of Commerce Foundation is dedicated to strengthening America’s long-term competitiveness and educating the public on how our free enterprise system improves society and the economy. The Foundation conducts research on issues facing business now and in the future.