The role of local government in entrepreneur and innovation support, as seen through COVID-19 impacts

The situation presents a unique opportunity to support those at the intersection between traditional economic development and innovation.

The sentiment above was shared by panelists in a recent Australian Innovation Leaders panel session that focused on local government support, response & opportunity. What does it look like for local governments to respond to COVID-19 while supporting innovation and entrepreneurship in their regions?

We recently held a webinar examining the role of local government in responding to COVID-19 specific to the innovation and entrepreneur community. The webinar is part of a weekly series for innovation leaders in Australia where we are look at different aspects of the innovation community in response to COVID-19 impacts. As part of the session, we asked the 145 webinar registrants through the application process as well as the general public in an open survey their views on how local government can respond to support innovation, entrepreneurs, and startups in their communities.

As we often say in group facilitation, the wisdom is in the room. Respondents provided feedback that resulted in 27 categories of successful initiatives and 22 strategies to consider for immediate action.

The results and raw data is shared below to raise awareness and continue the conversation. As always, feedback is welcome as we work together through the current impacts and beyond.

Consideration, respondents, and approach

The responses are from webinar participants and general public interested in topics of local government and innovation ecosystems. It is not presented as representative of a given population apart from the views of those interested in the webinar topic at the time.

Respondents were from a mix of roles, including:

• Local government (19%)
• Service providers (16%)
• Entrepreneurs (12%)
• Established businesses (12%)
• Innovation hubs (12%)
• State government (7%)
• Entrepreneur support organisations (6%)
• University (5%)
• Accelerators (3%)
• Economic development organisations (3%)
• Industry association / peak body (2%); and
• Bank, Chamber of Commerce, and Media (1% each)

Participants also came from across Australia:

• Queensland (49%)
• New South Wales (26%)
• Victoria (8%)
• Western Australia (7%)
• South Australia (5%)
• ACT (3%)
• Northern Territory (1%)

The analysis below is based on coding responses into groups. The questions were open, and a single response could be coded into multiple groups. The grouping is not meant to be inclusive, but representative of what participants were thinking at the time.

The raw data is provided for others to gain from the wisdom of those who provided feedback. Data has been edited only where names and references might provide an indication of the identity of the person responding.

Q1. What has worked well over the past six months?

The first question asked was:

When you think about development of innovation and entrepreneurs in your region over the past six months, what would be an example of something that has worked well where the local council has been involved?

Events

The dominant response was people sharing about how local government supported or delivered events in their region:

• A first-ever Business Support Expo and presentations involving all 3 levels of government explaining the range of services available and how to access them. Not only an information event for current and aspiring business-owners but a networking and education opportunity for all the providers
• Business Connect events
• City of Newcastle Council has quarterly events focused on aspects of innovation and entrepreneurship that draw an large and diverse crowd. They also sponsor the annual Hunter Innovation Festival and have been involved in community enterprise skill development with maker spaces in libraries and hackathon.
• The business team organise a Small Business Over Coffee event at a different place each month
• Providing a physical meeting space as well as education events.
• Pitch Nights to give local entrepreneurs a forum to not only present their ideas but refine their business plans and gain expert feedback.
• seminars
• Social events for connection
• Spirit of Hinkler event
• Still small – but holding events to connect local innovators/entrepreneurs so they don’t have to go into Sydney CBD.
• Events that harness visiting VIPs, such as NSW Governor and Ambassador to Italy.
• World Entrepreneurs Day event – bringing in inspirational guest speakers & providing networking opportunities for support groups.

Nothing or unknown

The next highest response was that people did not know about local government’s involvement or that there was no involvement with innovation and entrepreneurship.

Support for accelerators, hackathons, or programs

Another dominant feedback area was in government support for more structured programs including accelerators and hackathons.

• Hackathons to give local innovators a forum to meet like-minded people and test/refine their skills
• AgFrontier – one of Australia’s only Regional AgTech Incubators.
• Funding programs
• Loved seeing the work done at the Refinery and contemplated applying for round two this year.
• In Brisbane, BCC has funded the Elevate + accelerators
• local hackathons to support community
• ON Business Partner Program
• ON Business Partner Program tailored support for all small business (new and existing)
• Turbo-Traction Lab Program – hands on help provided by expert mentors to help build modern, global businesses.
• The Refinery

Connection and networks

Another key area is in providing access to connections and networks that often only local government can provide.

• In a Western Australian last year I was heartened that a rural council took on the role of ‘enabler’ and gate opener’. They supported entrepreneurs and civic leaders explore the ideas and went out of their way to reduce the barriers so they could experience success.
• Providing entrepreneurs support, connections and reducing red tape.
• Providing linkages/networks/pathways
• Providing opportunities for start ups and scale ups through connections and forums e.g. Brisbane Innovate.
• Start-ups working together.
• They put me in touch with a program – to progress a new product.

Support for spaces

Support for physical spaces was also mentioned a relatively high number of times as a positive over the past six months:

• In Rockhampton the council is funding the smart hub
• Peregian Digital Hub
• Lake Macquarie City Council’s economic development entity, Dantia, has established two coworking spaces, Dash Workspace is focused on digital entrepreneurs, and Dash Makespace for those involved in advanced manufacturing which hosts Slingshot’s Melt Accelerator.
• Providing a physical meeting space as well as education events.
• Peregian Digital Hub is a Noosa Council owned and run facility.
• Providing facilities/a hub

Support for entrepreneur support organisations

There are an emerging number of entrepreneur support organisations that provide specialist collaboration and support for innovation and entrepreneur-related strategies and activities. These are becoming more legitimised as local governments leverage these organisations for delivering specialist capabilities for economic diversification.

• CBRIN is one of the best innovation hubs in the country.
• SCRIPT sponsorship for QODE.
• Startup Shakeup did a great job in North West Vic bringing the different players together, including having someone from Benalla Council on their board.

Government-led challenge

Another area where local government plays a role is in clearly articulating challenges that entrepreneurs and innovators can address:

• Open Innovation Challenge: https://participate.melbourne.vic.gov.au/open-innovation/community-ideas
• Safety After Dark Innovation Challenge

Connection between innovation leaders within councils and between regions

Local governments can also facilitate connection between leaders and between central hubs in hub-and-spoke models.

• I believe staff in local government in regional areas are becoming more connected and innovative.
• Connectivity amongst the Innovation Community in Canberra and the broader region.

Digital capacity building

Government has also played a role in facilitating the development of digital capability in their region:

• Digital transformation
• Virtual skills development

Establish advisory or collaborative group

Developing innovation ecosystems is complex and can be a challenge when falling on the role of a single organisation. The establishment of a collaborative body brings key stakeholders around the table:

• Regional Innovation Committee to get community leaders together and talking about the local challenges
• Putting together a broad community advisory and working group to deliver an innovation hub that is relevant to the local needs.

Communication and support – infrastructure

Infrastructure plays a key role in integrating innovation ecosystems. Internet-of-things and droned producing large data files can be worthless without high-speed internet connectivity. Local manufacturing and production will suffer without adequate transportation and distribution. Automation will not help a production line without basic inputs of water and energy. Local government plays a role in facilitating outcomes and advocating for improvements.

• Communication and support for encouraging landholders to connect to water pipeline

Engagement in sustainability

Entrepreneurs are often passionate about making a difference in where they live, resulting in social enterprises and community impact. Governments who engage in this process can facilitate better outcomes and develop new industries through local leaders.

• Sustainability engagement

Online support programs

Some local governments get actively involved in providing digital capability building programs by providing training themselves or through a third-party provider.

• Digital coaching program

Business grants

Some local governments provide grants to build capability in areas such as digital skilling which can then help local businesses employ local resources.

• Providing digital marketing or other grants which enable startups to employ people locally to provide the services

Mentors

Local government are often large employers particularly in regional areas, attracting leaders that can provide additional mentoring support to emerging businesses.

• Mentoring at the innovation hub.

Procurement – first buyer

Often the thing an emerging business needs most is the validation and testing of a first customer. Local government can play a role in helping to trial new product and provide valuable feedback while funding early local development of new ideas.

• Being first buyer

Strategy

Local governments can provide a broad view of a region’s profile. A well-developed strategy document provides a good playbook for entrepreneurs to know how best to pitch their product or service as well as good data on potential local customers and supply chains.

• In developing a pitch to Council, I find the Community Dev Strategy to be a valuable document.

Data access and platforms

Local government can support innovation through providing access to data for new ideas and using services that leverage the data for local outcomes.

• Using AI to process LEO images for illegal structures

Infrastructure – smart city

Local government can provide the technical and social infrastructure on which entrepreneurs and businesses can develop new technologies.

• Brisbane smart poles, they’re installing ports for data collection on how the city functions

Infrastructure – amenities

Innovation does not happen based on technology alone. Lifestyle and amenities play a key role in attracting and retaining people who work together to develop new ideas. New ideas are just as much if not more so likely to happen at the cafe, gym, beach, or football field as they are in a dedicated innovation hub or corporate research lab.

• So many particular things like accessible beaches and playgrounds

Recovery response – rent relief

Many local governments are offering rent relief for tenants in council properties to help with the COVID-19 impacts.

• Recently, Noosa Council gave Hub members rent relief (March-June) to support members through COVID-19 (the Hub is currently closed for coworking).

Recovery response (bushfires)

When considering success factors for entrepreneurs, many regions will be focused on recovery from the recent fires. Support needs to acknolwedge each region for where they are at given recent circumstances.

• Bushfire recovery

Negative – poor understanding of innovation, technology, entrepreneurs; Negative, bureaucracy and mediocrity; Negative – barriers to entry; Negative – lack of acknowledgement and response; Get out of the way

We need to acknowledge that this is a change process and there will be different experiences and lessons along the way. No one would propose that all local governments have figured out how to best support innovation and entrepreneurs in their region. As mentioned, it is a complex process and we are all learning.

There was a lot of positive feedback and good examples of success. While the question explicitly asked for a success factor, it is expected there will be some perceived negative experiences. The question leaves room for these to be shared.

We risk rapid learning if we do not share the criticism with the successes. Comments are shared to validate the perspectives as real experiences in the community and to help form a realistic picture to consider where change needs to happen.

• Actually our local council is very poor at understanding innovation, technology and entrepreneurs.
• Very busy space with the Federal Government and State Government rolling out big programs. Transitioning business models is not, I believe, a core competency of Councils.
• Local council have to get out of the way. Governments attract mediocracy and really are completely disconnected from reality, especially if they are career politicians.
• Our political environment is outdated, bureaucratic and authoritarian. No business in this day runs this way.
• The local council need improvement in collaborating with businesses and startups as you approach them and they say “Oh we can’t be seen to be collaborating or partnering with one commercial business.”
• My personal experience with one council is no acknowledgement of business, no response when suggestions have been made, and no sharing of information relating to initiatives occurring. NOT good enough!

Q2. What is the role of local government to support innovation and entrepreneurs over the next four weeks?

The second question asked what the local government’s role might be moving forward:

In the next month, what do you feel is the best role for local government in supporting innovation and entrepreneurs in your region?

A four-week window was provided to bring the focus as much as possible on practical outcomes rather than generalities. Moving from what has worked in the past to immediate action moving forward, we see a shift from general events to collaboration, information sharing, and immediate response to the COVID-19 impacts such as business transformation.

Create collaboration and communication channels, coordinate activities

In terms of moving forward, the dominant sentiment was that of local government as a facilitator of connection and collaboration.

• Ensuring open two-way conversations to build trust with a newly elected Council. Council’s goal is to strengthen the local economy and build prosperity through jobs, this needed to be done collaboratively with all stakeholders and businesses.
• Build the collaboration and community for local entrepreneurs and technologists
• A source of information, connectivity and support for local startups, entrepreneurs and innovators
• Coordination of activities, promotion of activities etc
• Connecting of the dots – where there are opportunities or education available, get the message put through networks, business groups, startup groups.
• Supporting online forums for businesses to come together no matter who has initiated them.
• The best thing they can do is provide the tools and platforms for local communities to collaborate and make their own decisions.
• Facilitating connections to industry, government, and education.
• Engaging with locals to find out what their needs are in relation to Co-Creating local community hubs
• Connecting entrepreneurs with timely advice, support and experts who can quickly understand their business situation and help navigate them through the current economic/business conditions.
• IME startups want one of three things: 1) They need a shoulder to cry on. 2) They need you to keep them on-track and accountable with their offering and sales 3) They want networks/contacts and introductions. So I would assume really you can provide an exchange for all three….using the local angle to bring them in. But with current meeting technologies how much does the local really matter now? More or less?
• Providing connections
• Establishing “places” and ensuring the enablers (technology, mentors, events) are available in our local government area.
• helping establish better connections between industry and innovators. Entrepreneurs tend to be solutions driven and are not necessarily great salespeople nor managers.
• Providing sales training and leveraging council contacts to connect entrepreneurs with clients locally, statewide, nationally and internationally would be of great value.
• Collaboration of recycling and 3D printing requirements
• Providing a platform for businesses to engage with each other to provide services.
• Provide infrastructure for engagement between organizations and to support local procurement better.
• Tell councils to be more collaborative
• Disseminating information from other levels of government, sharing ideas re emerging business opportunities
• Uniting the local business community with one message to those outside the local council region
• Local government should be the conduit for the support from the State and Federal government as the pandemic is an Australian-wide and global issue much greater than the issues specific to the region.

Recovery response (funding, testing, training, infrastructure)

Many of the responses focused on local government’s role as a direct response to the COVID-19 impacts.

• Helping community recovery, including small business and residents
• Rolling out testing infrastructure. test test test test and then test more rolling out, inc. training, a paid workforce to support those who test positive.
• Deliver plug-and-play technology solutions to those in isolation, so they can stay connected.
• Relief assistance
• Helping business with Covid19 response
• COVID-19 sustain (pivot), recovery, growth phases of small business support (new and existing)
• Pivot to COVID-19 local small business support to help sustain, recover and grow in 2020.
• Highlighting the key challenges around COVID19 including health and the economy and providing supporting data and information then assisting the best ideas to accelerate prototypes for testing, partnerships and resources under the principles of open innovation.
• Focus on the opportunities this problem has caused and provide them with the support and connections they need to execute the changes they need to make in their businesses to ensure they survive.
• How to adapt to COVID-19.

Procurement – ease of access for startups and entrepreneurs

Procurement and government as a customer was another dominant recommendation, increasing the efficiency and accessibility of the procurement process.

• Open lines of communication to make local governments more approachable for even the smallest start up to offer their advancements in goods and services already used by local governments. So where applicable, these local innovators can be utilised in place of what may be interstate or even international products, services, and solutions currently.
• Seriously looking at their ideas. There are so many out there that can help.
• Supporting bottom-up initiatives from industry.
• Providing seed funding for solutions that support local government needs ie initiatives related to increased liveability.
• Local government as customer.
• Massive community engagement in liveability initiatives.
• Reviewing procurement processes allowing more flexibility for short term purchasing experiments to test and learn. 
• Procure locally (bend the rules a little)
• Release of works and procurement opportunities

Support local supply chains

The impacts from COVID-19 are seeing both a global view with increased online engagement as well as localised focus of supply chains as borders are closed and people rally behind local known providers. Respondents identified local government’s role in supporting local businesses through direct procurement and advocacy.

• Profiling local innovative businesses in local/regional press, to community orgs and internet buying sites
• Procure locally (bend the rules a little)
• Encouraging socially beneficial businesses and projects, including ways for us all to support small business
• Provide infrastructure for engagement between organizations and to support local procurement better.
• I’d like to see the gaps in supply and how we can bring design, development and service delivery back to a localised closed loop chain.
• That there is ongoing awareness in the community to enhance local producers, and that we start retaining our brains trusts.
• Communication and connection with these local businesses.
• Sharing positive stories about businesses that have pivoted or have adapted to the current climate.
• Advocating for support for sole traders.

Support business transformation

Related to local business support is the need to support businesses that need to change their business model. This is a significant challenge as businesses struggle to develop new revenue streams and access different ways of engaging existing and new customers.

• Sharing positive stories about businesses that have pivoted or have adapted to the current climate.
• Funding and promoting re-invention programs for existing businesses.
• Supporting them to pivot their business wherever possible to deal with the current situation so they can continue to build their business into the future.
• Identifying opportunities for businesses to pivot and adapt their processes to embrace new outputs.
• Contracting for digitally transformed service delivery due to changed behaviour from Covid-19

Acknowledgement and advocacy

Every business group is looking for support. Entrepreneurs, startups, and the innovation community can feel overlooked as the focus is on other aspects of the economy. Acknowledging and profiling innovation and entrepreneurship can go a long way to encouraging entrepreneurial activity.

• Encouraging socially beneficial businesses and projects, including ways for us all to support small business
• Sharing positive stories about businesses that have pivoted or have adapted to the current climate. Advocating for support for sole traders.
• Profiling local innovative businesses in local/regional press, to community orgs and internet buying sites
• Host motivational webinars
• Acknowledging that small businesses and entrepreneurs ARE important!

Subsidies and grants

While resources will be stretched at all levels of government, grants direct to local business activity can help bridge the gap from COVID-19 impacts.

• Developed scope for an Innovation Hub ready for potential funding for 2021 implement.
• Subsidies and grants
• Grants for small businesses
• Funding
• Providing digital marketing or other grants which enable startups to employ people locally to provide the services
• Provide grants for rental support for the accelerator workspaces

Data and information, communication

Providing access to government data both related to COVID-19 as well as in general for innovation and entrepreneur activity.

• Opening up (anon)data to innovators.
• A source of information, connectivity and support for local startups, entrepreneurs and innovators
• Providing up to date, accurate information (finger on the pulse) and providing online platforms for people to connect, network and share information.

General

There are many who will look to local government for leadership without necessarily articulating specifics.

• Support
• Listening directly and responding appropriately.
• support, enabler
• Stay engaged at some level

Seed funding

Related to grants is a question of seed funding for projects that relate to local government outcomes. This is more problematic specific to equity in relation to public funds. A more viable option may be to adapt procurement processes and support new ideas through local government as a customer rather than an investor.

• Providing seed funding for solutions that support local government needs ie initiatives related to increased liveability.
• Grant funding – even for an equity position.
• Fund start up ideas

Local challenge-led engagement

The COVID-19 impacts provide a good opportunity for local governments to understand, curate, and present local challenges for entrepreneurs to address. The current situation is unprecedented and creating new challenges no one has experienced at such a large scale. It will require entrepreneurial and innovative thinking, practical ideas, and rapid implementation to both survive and recover.

• Focus on the opportunities this problem has caused and provide them with the support and connections they need to execute the changes they need to make in their businesses to ensure they survive.
• As enablers and funders of new responses, hosting online events, bringing people together with a solution focus to region specific issues.
• Engage startups to solve problems where government or traditional services have been disrupted.

Events

Local government supported events were a significant reflection by respondents on what has worked over the past six months. This would indicate that there would be value in supporting events in some form over the immediate future would be a good thing.

• Host motivational webinars
• As enablers and funders of new responses, hosting online events, bringing people together with a solution focus to region specific issues.

Dedicated internal resource

There can be value in having a local government role that has knowledge of entrepreneur and innovation activity.

• Introduce Innovation Champions within the organisation to drive initiatives and connect community/industry.
• Getting a grip on innovation, having the right internal personal to work in this space (v’s someone who knows nothing).

Increase internal understanding

Related to having a dedicated internal resource is the potential to partner with one or more external partners that coordinate and engage with the innovation and entrepreneur communities. This ‘outsourcing’ of entrepreneur development capability is similar to other unique functions such as tourism or peak bodies in specific industry sectors.

• Actively partner with local spaces and champions to direct funding into the small business / startup community to provide support alongside already funded “traditional” support services.

Online service delivery

Government needs to transition their business model along with local business. This includes a continued shift towards online services.

• Providing up to date, accurate information (finger on the pulse) and providing online platforms for people to connect, network and share information.
• Moving to more online service delivery.

Nothing or unknown

A few respondents did not know what they expected from local government or what options might be available. We need to acknowledge that many people will not be able to articulate what they need from local government and will be focused on keeping their own business afloat.

Support for spaces

There will naturally be less emphasis on physical spaces as space becomes virtual. There remains opportunity for local government support, however. If a local government was supporting a physical coworking space, that business may still have similar overhead costs from managing the physical space and maintaining connection with community. Added now will be virtual tools such as a Zoom subscription and additional third-party entrepreneur programs.

• Establishing “places” and ensuring the enablers (technology, mentors, events) are available in our local government area.

Support for vulnerable communities

Social innovation and social enterprise can play a significant role in addressing aspects of the community often overlooked in traditional economic development approaches. Local government can play a key role in focusing attention across all communities beyond those with ready access to opportunities.

• Looking at vulnerable communities and ways to increase connection and support. Esp with homelessness, DV, and elder isolation. Also PwD.

Support for accelerators, hackathons, or programs

Continued support for programs such as accelerators and hackathons will be important to retain local capability and deliver support to local entrepreneur outcomes.

• Fund grass roots programs

Rent relief

While some local governments may continue to explore strategies for engaging entrepreneurs, at a minimum leveraging traditional policy measures such as rate reduction and rent relief can help businesses through the transition.

• Transitioning business models is not, I believe, a core competency of Councils, rate relief, rent relief could be some things.

Next steps

This post and the data outlines a series of strategies that can be utilised by local government to support local entrepreneurs and innovation activity in established businesses. The raw feedback is provided in its original form so as to not be the opinion of one, but the collective voice of many.

There can often be a sense of an ‘us’ and ‘them’ perspective when considering local government traditional economic development and emerging innovation and entrepreneur ecosystem. The current COVID-19 impacts raise a potential to integrate these two areas into a common economic diversification perspective for shared outcomes.

It is difficult to argue that any of the recommendations presented by respondents above are not needed and valuable. The challenge is complex and can seem overwhelming. While local government plays a role in supporting the outcomes, no single organisation can address all the points raised alone.

By breaking down the feedback into categories, it is a hope that we can make sense of the challenge and work together to achieve more rapid impact over the weeks and months ahead. Feedback, ideas, and further insights are welcome in the comments below.