Many city governments in the US and elsewhere are torn when it comes to innovation. On the one hand, constituents live in a world that increasingly demands flexibility, interaction, and iteration, and governments want to be seen as responsive to new ideas and services. On the other, the “move fast and break things” ethos of many technology companies seems wildly inappropriate when public health and safety are at stake.
Cities are bound by regulatory processes developed decades ago and designed for predictability, stability, and protection — not for speed, ease, and invention. In addition, regulations have accumulated over time to respond to the urgent concerns of years or even decades ago, which might be irrelevant today.
The real work for city leaders today is to create, not just new rules, but new ways of writing and adjusting regulations that better fit the dynamism and pace of change of cities themselves. Regulations are a big part of the city’s operating system, and, like an operating system, they should be data-informed, continually tweaked, and regularly refreshed to respond to bugs and new use cases.
This site has recommendations and case studies in four areas where technology is both pushing up against the limits of the current regulatory system and offering new tools to make enforcing and following rules easier: food safety, permitting, procurement, and transportation.
But the principles apply to many more areas of local regulation, and point to a new approach for local governments trying to find the right balance between embracing the new and disruptive and protecting people, places and institutions. Here are five steps city governments should take to make better rules for living, working, and creating in cities, plus two bonus tips.
1. Focus on values, then rules
Every city leader should ask herself or himself: do the rules we have reflect the city we want? For example, many city leaders are making equity a priority. City leaders taking an equity-first approach to regulation should engage people who are poorly served by existing regulations or systems and often left out of decision-making processes. Human-centered research and design methods can be used to co-design rules and processes with residents and front-line providers. City leaders should turn to these groups at the beginning of the regulatory reform process, rather than seeking their approval at the very end. (A public hearing can’t be the only avenue of citizen engagement.)
Seattle’s new transportation plan is a good example of starting with values, and the city’s racial equity toolkit provides a useful template for equity-based policy review. With equity as a lodestar, city officials can evaluate which rules to adjust (in which direction, and by how much), which ones to jettison, and which ones to add to find the right balance point between safety and economic opportunity. A values-based approach can also help city leaders understand when to say no to companies that are out of alignment with a city government’s overriding principles.
2. Define big-picture success clearly
Regulations interact with other city policies and goals. To take the example of food safety, regulations can advance or hinder city aspirations around public health, food access, tourism, placemaking, and economic opportunity. City governments should define what a successful food system looks like and think broadly about how to achieve it. If existing regulations about food preparation and sales are a stumbling block, cities should think about whether different approaches can achieve the same level of safety while also advancing access to healthy foods or goals around employment. Regulation is about trade-offs. Are cities getting the tradeoffs right – in food or any other area of rulemaking? The City of Detroit suspected its zoning and permitting systems were blocking neighborhood revitalization. Through some clever prototyping, the city’s planning and development office discovered which regulations and processes got in the way of the bigger goal of helping neighborhoods thrive.
3. Make regulations about people
Policymakers must look outside their own immediate team to understand how new technologies or business models or rules could advance or hinder a city’s goals. Complex problems demand more, and more varied, minds working on the solution. Conveniently, cities are home to a wondrously diverse and informed range of people and institutions who can contribute to making new, better rules.
Collaborate with colleagues
Philadelphia’s procurement reform was supported by a cross-agency working group to leverage its institutional knowledge and draw on internal expertise from a variety of departments. Additionally, frontline regulators know what the pain points are for companies and customers, and those pain points might be a sign that the rules or processes are out of date.
Collaborate with residents and users
Policymakers should focus on service users – which is to say, the residents that they serve. To better understand what people need, city staff can use (and need training in) human-centered design approaches; they can then apply those approaches to rules and processes, such as permitting.
Collaborate with outside experts
Universities, research centers, and private companies can provide valuable help, especially when city officials need to make a decision fairly quickly or when there is a massive asymmetry of information and expertise between governments and companies. Particularly in the case of procurements, city governments can use RFIs to gather systematic and updated information on new technologies. When facing regulatory and procurement challenges, Austin turned to its tech companies, Toronto drew on a local innovation lab, and Philadelphia and Portland collaborated with universities.
Collaborate and share experiences with other cities
Cities need to learn from each other and share case studies, codes, negotiation strategies and roll-out plans. To help, we have created an indexed bibliography of materials related to innovation and regulation.
4. Prioritize problem-solving
Regulations exist to solve problems, but over time governments can lose sight of the problems and focus on compliance for its own sake. When a city is looking at a new kind of company – whether in a regulated area or for a procurement problem – leaders need to stay focused on the problems that regulations are trying to address. In transportation, for example, rules are designed to guard passenger safety and equal access, and manage traffic congestion. Can companies perform as well or better than existing providers, and hand over the data to prove it? This approach requires regulators to know how well existing regulations solve problems, how to evaluate the data the companies are handing over, and how to evaluate risk. That’s a big task. Collaboration will help.
5. Test, learn, repeat
Rhode Island has created “innovation lanes,” where regulators and new companies can work together on specific problems. The results will guide changes in state regulatory laws. Cities already experiment with pilots, pop ups, innovation zones, or tactical urbanism efforts when thinking about delivering new services. That same approach can apply to new regulations and procurements. New technologies, like sensors and monitors, and new data analysis tools can help regulators oversee the experiments and match the level of regulation a company bears to the level of risk it poses to residents.
Bonus tip #1: Mayors or managers and councils will almost certainly need a regulatory reform team that is empowered and ardently supported to implement these steps. Individual departments might make changes, but one person or team needs to connect the efforts, provide political cover, run trainings and listening sessions, and do the day to day work of culture change.
Bonus tip #2: If you’re a city official reading this and thinking, “But we already do that,” ask a random sample of permit applicants, especially people who were turned down; local start-ups in regulated industries; and new or small businesses who struggled with procurement rules whether they would agree.
Many of our current rules for city-making and city-sustaining (which is a more generative way of thinking of regulation) are not well-suited for the technological, economic, and social demands of the present or the emerging future. City governments can do better with and for companies and entrepreneurs and, more importantly, with and for their residents. These five steps plus the more detailed recommendations and case studies here will help cities fulfill their promise as places of innovation, opportunity, and delight.
The recommendations and case studies presented here developed out of research and working group convenings conducted by the Aspen Institute Center for Urban Innovation and sponsored by Bloomberg Philanthropies. Working groups included leaders from state and local government, venture capital, academia, non-profits, start-ups, and philanthropy. Jennifer Bradley wrote this essay, and designed and moderated the innovation and regulation convenings. Jessica Lee wrote the case studies and developed the details of the recommendations that emerged from the convenings. Elena Bell organized and managed the convenings and administered the website. Rebecca Aviva Hume designed the site, and Jesse Pugh built it.
- Geoff Mulgan, NESTA
Anticipatory Regulation: 10 ways governments can better keep up with fast-changing industries
- Stephen Goldsmith and Neil Kleiman, Brookings Institution
A New City O/S: The Power of Open, Collaborative, and Distributed Governance