More on Gov't Innovation: The Elizabeth Warren Paradox

A source with extremely relevant in-government experience writes in with great points of context for this post of mine Challenge.gov from earlier today, on why innovation and government might not go hand in hand. Here's a taste of his/her points, with the full thing after the jump:

Government has very few incentives for innovation.  Those guys who invented Twitter, they had some pretty good monetary incentives to innovate.  Now take Elizabeth Warren, she came up with the idea for a new consumer finance protection bureau -- arguably on par with an idea for a new company -- and her reward is...what exactly?  Even if she gets to head up the new bureau, the incentives are no where near what they are for innovation in the private sector. 

Keep going...

1. Government can't fail as easily as the private sector.  If Netflix does a challenge and it doesn't work, no biggie.  They're out $10 million and they move on.  Sure it sucks, but no one gets dragged before a congressional committee to testify about why they lost $10 million on an idea that in retrospect was *obviously* not going to work.  There's no GAO or inspector general asking you to produce documents proving it wouldn't have been better to do it another way.  And institutions are hard to get rid of -- even in the face of an economic crisis it was brutally hard to, say, eliminate certain regulatory agencies that didn't quite do the best job.  Once you start something in government it's hard to stop it.

2. Government has a lot of laws and rules.  Government agencies don't all even have the statutory authority to give out prizes or hold contests.  In a lot of ways, if Congress hasn't specifically given an agency the power to do something, it's really hard to do it.  Congress doesn't really give money to the agencies and say, go, do your mission.  They give money for specific things and there are thousands of pages governing how they can spend it.  A company can find a vendor and hire them for any reason they want -- because they like their website, because they have a good feeling about the contractor, because it's their brother's company.  The process of giving money to a vendor in government is way, way more complicated.  Government has to be fair and their are laws and rules to ensure that it is.

3. Government has very few incentives for innovation.  Those guys who invented Twitter, they had some pretty good monetary incentives to innovate.  Now take Elizabeth Warren, she came up with the idea for a new consumer finance protection bureau -- arguably on par with an idea for a new company -- and her reward is...what exactly?  Even if she gets to head up the new bureau, the incentives are no where near what they are for innovation in the private sector. 

A bigger issue here though that kind of touches on the root of all three of these -- people don't really want their government to be innovative, it's just not a priority.  You do a poll asking what one thing you'd prefer the government do -- be more innovative, waste less money, be more fair, or pay employees less -- I'm guessing innovation doesn't come in first.

One comment on that final point, about incentivizing the innovation that could happen from inside government. It brings to mind the Bayh-Dole Act that passed in the 1980s to encourage universities and businesses to file patents on products that sprung federally-funded research.

You can imagine the host of problems that would come along with offering financial incentives like that to government employees, but there are other ways. The Obama White House has tried something along those lines with their SAVE Award, which shines a bit of glory on federal employees up and down the ranks who have good cost-savings ideas. There could be something in focusing a similar program on innovators. Maybe they could author a GPO-printed book on their project as an award or something.

Here was another response, from a government contractor, highlighting point #2 above. Keep 'em coming.