This entry is an excerpt from the Nesta's "Digital Entrepreneurship: An ‘Idea Bank’ for Local Policymakers" (2016), with updates to the original information since the publication of the report. Along other types of policy instruments, Nesta explored city-level pre-procurement programs (i.e. city programs aimed at startups which are not yet ready for market, but which show potential).
The City of San Francisco in particular created the Startup in Residence (STIR) to bridge the address the gap where local governments are tasked with tackling challenges from public health and safety to urban planning, but far too often, their technology and processes lag behind the private sector.
Over 16 weeks, City agencies and startups work together to co-develop custom solutions that address real civic challenges. With direct and ongoing access to government needs, opportunities, staff, expertise and pain points, startup entrepreneurs are able to develop solutions and share innovative processes with the City's various Departments, while having the chance to develop products and services which cater to the $140 plus billion public sector market.
The program concludes with a Demo Day and Roadshow at hich findings and developments are shared with the public. Thereafter, STIR’s expedited procurement process allows interested cities to contract startups after the 16 week residency
STIR was founded in the San Francisco Mayor’s Office of Civic Innovation and is now administered by City Innovate, a public-benefit corporation located in San Francisco.
2014: The program began as a pilot initiative, Entrepreneurship in Residence.
2015: The U.S. Department of Commerce awarded a three-year grant to scale Startup in Residence in four Bay Area cities: Oakland, San Francisco, San Leandro, and West Sacramento.
2018: The San Francisco program partnered with the City Innovate Foundation to expand to 11 cities across the United States.
2019: Beyond cities, STIR includes counties, regional governments and states, such as the Miami-Dade County in Florida, the State of Arizona, and State of Vermont.
As of January 2020, City Innovate shared the following cumulative results from STIR participating governments participating (i.e. not just San Francisco):
86 innovative technology companies have participated in STIR
More than 1000 innovative technology companies have applied to government challenges
38 governments have used STIR to facilitate a procurement
80 percent of government/vendor partnerships initiated through the STIR program result in a contract
- Economic Development: STIR vendors have raised more than $250M in investments, created thousands of jobs and have had three acquisitions.
Inclusiveness: More than 50% of STIR vendors receiving contracts are from under-represented communities.
For city departments, this approach brings the potential for new products and services which lower costs, increase revenue, and/or enhance productivity.
The program is structured as a replicable and scalable model to build networks of City Governments that accelerate the commercialization of cutting-edge innovations in technology services to the public sector and expand entrepreneurial and investment opportunities.