Three ways governors are investing in innovation

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Editor's note:

Each year, governors outline their legislative and budget priorities in “State of the State” addresses. This is the first in a series of posts that explore what governors are saying in 2019 about issues related to innovation and inclusion.

Innovative new technologies are rapidly reshaping our country’s industries, workplaces, mobility patterns, and ways of communicating. Based on our readings of State of the State addresses in 2019, governors are responding to the challenge. Many speeches brim with optimism about the power of new technologies to spur productivity and growth; many also focus on managing the downsides of technological innovation, including privacy risks and a digital divide.

Governors are proposing three broad approaches to support digital innovation in their states. These are:

  1. Building stronger innovation ecosystems
  2. Using digital technologies to modernize government operations
  3. Expanding access to broadband

Here are some of the most interesting ideas that we found within each approach.

1. Building a stronger innovation ecosystem

Many governors spoke of the need to develop their states’ innovation economies to ensure economic prosperity in the years ahead.

Several governors focused on the specific drivers of the innovation economy in their states. Nevada Governor Steve Sisolak observed: “We have become ground zero for the Fourth Industrial Revolution that will come with blockchain technology,” noting the presence of Tesla, Blockchains LLC, and other tech firms in a new “Innovation Park” in northern Nevada. Meanwhile, South Dakota Governor Kristi Noem spoke of leveraging the state’s expertise in agriculture and human health research to design “new therapies for human diseases, new crop technologies, or other applied research,” and tasked her Office of Economic Development to identify the “next generation of targeted industries.”

Other governors focused on gathering key stakeholders to promote growth in their tech sectors. New York Governor Andrew Cuomo announced plans to re-establish a state “Innovation NY Network,” which will bring together “academics, venture capitalists, business leaders, patent lawyers and other professionals and entrepreneurs…to grow the fields of artificial intelligence and quantum computing in New York.” After threatening to disband the entity on the campaign trail, Wisconsin Governor Tony Evers instead directed the Wisconsin Economic Development Corporation to create an innovation and entrepreneurship committee that would focus on supporting “small businesses, seeding capital funds, and technology development” in the state. And Arkansas Governor Asa Hutchinson proposed creating “a private sector Technology and Innovation Council…to create new energy and support for tomorrow’s problem solvers and thought leaders in software design, cyber security, data analytics, and blockchain technology.”

Implementing a policy to compensate consumers for the use of their personal data would be a global first, and reflects new thinking on how the innovation economy can support broadly shared prosperity.

Interestingly, the state executive presiding over the country’s most active tech community, California Governor Gavin Newsom, focused on a different approach to leveraging the innovation economy to benefit state residents. In his State of the State address, Newsom announced that his team would be developing a proposal for a “Data Dividend” that would allow all Californians to “share in the wealth that is created from their data.” While Newsom did not share specifics, implementing a policy to compensate consumers for the use of their personal data would be a global first, and reflects new thinking on how the innovation economy can support broadly shared prosperity.

2. Using digital technologies to modernize government operations

Many governors also embraced the power of new technologies to improve the delivery of state services.

Several governors proposed plans for comprehensive reforms. North Dakota Governor Doug Burgum emphasized the importance of safeguarding personal information, improving accessibility, and lowering overall costs, declaring, “We’re creating a unified IT Shared Service organization. Already, we have aligned the backend systems of 31 state agencies, saving more than half a million dollars in hosting costs…We’re calling for incremental investment of $16.4 million to centralize cybersecurity…and for $174 million to fund 24 IT projects that will support 19 agencies.” Meanwhile, Connecticut Governor Ned Lamont announced plans to create “the first all-digital government,” stating that “the entry point to Connecticut will be through its digital front door, a one-stop-shop for everything current and prospective citizens need from their government.” And as he promised during his campaign, Ohio Governor Mike DeWine promoted InnovateOhio, led by Lieutenant Governor Jon Husted, in his State of the State speech. DeWine stated that InnovateOhio’s “mission is to look at every state service through the eyes of our customers” and noted that the initiative “is working to better collect and use data across agencies in important areas involving the opioid crisis, workforce development, and children’s initiatives.”

Other governors proposed narrower uses of new technologies to improve government operations. Oregon Governor Kate Brown announced plans for a centralized procurement system. Oklahoma Governor Kevin Stitt proposed a $20 million grant program to allow state agencies to modernize their services and create an online performance management dashboard. Delaware Governor John Carney proposed to offer monetary rewards to state employees “who come up with and implement innovative, cost-saving initiatives.” And to increase transparency and accountability, South Dakota Governor Kristi Noem promised to bring public meetings “from the boardroom to your living room” by utilizing technologies like YouTube, Facebook Live, and other apps and assembling meeting agendas and minutes in a centralized online location.

3. Expanding access to broadband

Our colleagues Adie Tomer, Elizabeth Kneebone, and Ranjitha Shivaram put it well when they wrote, “broadband…is the essential infrastructure for unlocking the internet’s economic benefits.” According to Burning Glass Technologies, approximately 85 percent of jobs are now posted online—meaning that job seekers without regular access to the internet are at a severe disadvantage. Governors are responding: By our count, at least 18 governors highlighted substantial new investments to help residents access broadband. This compares to just six governors who mentioned broadband in 2013.

By our count, at least 18 governors highlighted substantial new investments to help residents access broadband, compared to just six governors who mentioned broadband in 2013.

Several governors’ statements on broadband investments stood out. Missouri Governor Mike Parson touted an incoming $255 million federal investment from the FCC, supported by $5 million in state funds, to expand the state’s broadband networks. South Dakota Governor Kristi Noem outlined a detailed plan for closing broadband gaps in her state, including through the deployment of 5G technology. And Connecticut Governor Ned Lamont also signaled his embrace of 5G as part of a plan to “invest wisely in [Connecticut’s] urban centers” in order to “attract millennials, top talent, and leading companies.” Governors from both political parties and in every region of the country expressed support for broadband investment.

Taken collectively, governors’ State of the State speeches reflect efforts to both embrace the opportunities and manage the downsides of digital innovation. State executives are right to see great promise in our country’s fast-growing tech sector and the new ideas it generates. Yet their investments and proposals also signal real concerns that the communities—and states—that fail to embrace our ongoing digital revolution will be left behind.

The authors would like to thank Andrea Garcia for her contributions to this analysis.