Gentz: Public sector accelerators – Why don’t we have them?

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“I love going to the DMV” and “Wow, my son’s school looks so different from when I went to school” are not phrases commonly heard around the country. As startup accelerators work to invest in companies that will disrupt their own industries, I can’t help but wonder — why don’t we have accelerators focused on improving one of the largest shares of our economy — the public sector.

My education background first brought me to this question. Many startup accelerators are focused on their own different industries. In Iowa alone, we have the Global Insurance Accelerator, Agritech Accelerator, and the Iowa Startup Accelerator (ISA). While the ISA does include education in the general description, it is not specifically designed for the public sector. If Iowa is serious about recruiting the right talent for jobs of the future, there must be an investment in those working to disrupt government entities.

Different Key Stakeholders

Last year, an event brought together higher education Chief Information Officers from colleges and universities, where they discussed a “Top 10 Issues” list from the Center for Digital Education’s 2018 Digital Districts survey. During the event, one CIO commented that the list read like one from the private sector — from 10 years ago.

The focus in education and in government sadly still lays in issues such as infrastructure, connectivity, and the purchase of necessary technology. (I can’t tell you how many times I’ve heard the word “Mainframe” from educators and government staff, in a more recent period of time than I care to admit.) The private sector moved past these issues years ago, and instead of still struggling with providing access, have moved on to actually transforming practices and policies from old ways.

So why is the public sector so far behind? If we think it’s scary to start a new business in the private sector, try doing it on the taxpayer’s dime. Superintendents that believe that technology can transform learning and fill jobs of the future start trying to implement changes toward that goal can end up losing their jobs if something doesn’t go exactly as planned. A startup in the private sector answers only to consumers — either the product/service gets purchased or it doesn’t. The stakes are higher when it comes to education and government.

If at any point in time the school board is uncomfortable with any ideas or changes a Superintendent places in the vision statement for a district, new leadership can be brought in to ensure nothing too drastic happens. Not only that but because school boards are elected, they have to be concerned about their own seats and constituents as they affirm or dismiss a Superintendent working to accelerate change within a district.

The same goes for public sector employees who try to change processes or bring in new technology to increase efficiency within the agencies– try anything too “crazy” and consequences could be dire. This goes for the employee trying new things or the agency as a whole. If a district or government entity advocates for and implements a strategy that has a few bumps in the road they become negative headlines in a newspaper, something that private sector entrepreneurs and innovators don’t usually have to worry about.

Different Markets

Another implication of being on the taxpayer’s dime is the fact that even though these markets are large (an estimated $3.25 trillion annual spend for state and local government), they simply don’t have the funds to truly try large-scale innovations.

This is why in both districts and agencies there are often many pilots. This is touted as the best way to innovate in both markets and is often a policy recommendation from advocacy groups; however, the problem lays with the ability to scale up. If successful pilots remain pilots, there becomes an issue of equity and access for all. Pockets of innovation exist in districts and agencies and have for some time, we’re just still stuck at scaling up and going statewide in many cases.

Most commonly, if a district or agency adopts a new program or tool, it is at the behest of another district or agency. Word of mouth is the most important marketing tool when it comes to the public sector. This is the most challenging part for a new startup to handle. Without one district to help pass your tool or service on to another, you are essentially at a standstill. Annual budgets and changing legislation can also be a hindrance when it comes to getting a product to the market in the public sector.

Recruiting

There are two major challenges facing the public sector when it comes to recruiting. The first is finding leadership, and the second is retaining talent for more than a few years when the private sector can offer much better salaries and benefits.

A search firm that places Superintendents and/or principals costs only a fraction of recruiting firms in the private sector. This is because often searches are based off the salary of the position they are recruiting. Superintendents are essentially the CEOs of school districts and the same for agency heads. It’s hard to recruit the top talent when they could make much more in the private sector.

This also goes for IT leaders already in districts and agencies. CIOs in the public sector are responsible for an incredible amount of personally identifiable information, decisions on the direction of technology, and taking responsibility when technology rollouts and implementation fail. That’s a ton of pressure for a person who isn’t making a lot and has the public watching their every move. In fact, according to NASCIO, 7 CIOs changed in 2018 by May, adding to the 15 changes in state CIOs in 2017.

Many talented IT leaders move on to the private sector within a few years of their public sector position- requiring a Superintendent to ask the board for a raise in salary or hire a new IT leader. This leaves the public sector without a talent pipeline, constantly changing leadership and potential hires that are new to handling an immense amount of responsibility and data. In smaller districts and agencies, IT leaders are often just the youngest employees who know how to use Google Docs. (Only a slight exaggeration.)

What Can We Do?

If we truly believe that technology can change the face of government and education, then we have to start investing in it.

Entrepreneurs have great ideas to help both agencies and districts but breaking into the market is the biggest challenge. I know of more than a handful of education companies looking to change certain aspects who have call after call with district leaders saying that it’s a great tool and needed, but they just don’t know where the funds would come from.

If we want our experience at the DMV to be better, and our students to be ready for the future workforce we need to consider accelerating the companies that are targeting these markets.

Susan Gentz is founder & owner of BSG Strategies and is a contributing writer for Clay & Milk.