INNOVATION IN QUÉBEC MUNICIPALITIES PERSPECTIVES AND CHALLENGES. Conseil de la science et de la technologie Advisory Report

Transcription

1 INNOVATION IN QUÉBEC MUNICIPALITIES PERSPECTIVES AND CHALLENGES Conseil de la science et de la technologie Advisory Report March 4, 2004

2 Chapter 6 Summary, Main Findings, and Recommendations Objectives Like all private and public bodies, Québec municipalities evolve in a constantly changing environment where the need to innovate in order to adapt to change and improve performance is beyond doubt. As a result, Conseil de la science et de la technologie (CST) has continued its work on the Québec innovation system by looking at municipalities as innovating organizations. CST has examined innovation in a very broad sense, including technological, social, and organizational innovation, and measured results on a local scale with two specific objectives: - Draw up a profile of innovation in Québec municipalities - Develop a better understanding of the innovation process in municipalities in order to make recommendations on how to provide appropriate support and thereby foster increased innovation Report overview A valuable contribution To achieve these objectives, this advisory report gives a brief profile of Québec municipalities (chapter 1), followed by the definitions and general characteristics of innovation in private service companies and public bodies, including municipalities (chapter 2). Chapter 3 describes and analyzes innovation in Québec municipalities, drawing on data from focus groups set up for the purpose and on surveys of innovation in Québec municipalities in four sectors of municipal governance: land use planning, public works, local democracy, and economic development. Chapter 4 gives examples of innovations by municipalities outside Québec, and chapter 5 lists the resources available to municipalities to support innovation. This advisory report has a double role. By drawing up a preliminary profile of innovation in Québec municipalities, we hope that the report will lead to future studies using different information-gathering tools, such as case studies, with a view to developing a better understanding of the innovation process and exploring additional themes. There was a valuable difference between the study conducted under the report and conventional studies on innovation. Most focus on the manufacturing sector, overlooking the rapidly growing service sector. A recent CST 1 report underscored the lack of data on innovation in the services. Since municipalities are public service organizations, the survey helps provide a better understanding of the sector. Characteristics common to political institutions Main challenges 6.1 The Municipality, a Public Service Organization As democratic public entities, municipalities have a number of characteristics in common with all political institutions: accountability to the people, a combined political and administrative structure, rules of operation defined by an ever-evolving legislative framework, jurisdiction and powers shared with other levels of government, and multiple interactions with various stakeholders in their milieu. The challenges facing Québec municipalities and the stakeholders in their orbit are major incentives for innovation. Based on an analysis of the literature and insight provided by focus groups, they can be identified as follows: - Balancing financial responsibilities and sources of revenue - Ensuring the competitiveness of local communities - Integrating new technologies - Adapting to new social realities - Decentralizing power and fostering public involvement - Respecting the imperatives of sustainable development - Accounting for urban/rural duality 1 Conseil de la science et la technologie (2003), op. cit. 2

3 - Building partnerships between government actors 6.2 Definitions and General Characteristics of Innovation Technological, Social, and Organizational Innovation A broad definition of innovation Types of innovation Innovation can be viewed as change that fulfills a need for improvement. It stems from a high level of knowledge and a perpetual push for improvement to boost competitiveness. The literature and documentation that we consulted on best practices show three types of innovation in public organizations: - Technological, because scientific and technological progress offer solutions to the problems these organizations face - Social, due to the need to improve the standard of living in the community - Organizational, because public bodies must strive to optimize operations and the use of resources General Characteristics of Innovation A new area of interest Differences with the private sector Studies on innovation in public organizations Two approaches to innovation Like the service industry as a whole, governments have only recently developed an interest in innovation. In general, studies on innovation view public organizations as partners to innovating enterprise. Yet public organizations can also innovate. The main studies conducted on the issue to date have largely centered on documentation of best practices. More recently, Statistics Canada conducted a study with a section on technological and organizational changes in government. However, local and regional governments were not examined in the study. Research has brought to light several differences between the public sector and the private sector in terms of innovation. First, the two sectors have different objectives. Private businesses innovate to boost their productivity and profits, whereas public organizations do so in order to provide a broader and more effective range of services to the community. The private sector also has recourse to innovation-stimulating measures, while the pubic sector rarely has access to the funding required for innovation projects, and even less to tangible incentives encouraging innovation. In addition, the risks associated with innovation are different for public organizations since government decision-makers have to be accountable to the public. Nevertheless, there remain a number of similarities between public and private service organizations, such as the tendency to put organizational innovation before technological, the absence of a dedicated R&D department and budget, 2 and an emphasis on innovations that are largely immaterial. The few existing studies on innovation in public organizations have focused on analyzing best practices. They bring to light the fact that in the majority of cases, innovation requires the cooperation of a number of organizations and that it takes the form of new services for the public. One third of all cases involved organizational innovation, and nearly a quarter involved initiatives to empower the organization s members and the public. To make their innovation a success, public organizations can adopt either of two approaches. The first, in-depth planning, encourages managers to emphasize the legislative framework and the development of policies to promote innovation, use rigorous planning, and ensure proper coordination of all players so that the final result reflects the initial idea. The second, a trial-and-error approach, holds that innovative government 2 Some large cities have science and technology budgets, but only a small minority. 3

4 officials improve their organizations by experimenting to achieve objectives that are defined vaguely at the beginning and honed as the process goes on. Lack of data on municipal innovation Municipal innovation has been widely documented. However, the nature and characteristics of municipal innovations are nearly always left in the shadows. The main data organizations, Statistics Canada and Québec s Institut de la statistique du Québec, keep no data on municipal government innovation and only limited data on municipal government in general. They view municipalities essentially data collection zones rather than public service organizations. The situation is the same at the international level, where large organizations do much work on municipalities and local governance, but very little on innovation in local governments Learning from International Organizations To better understand the dynamics behind municipal innovation and identify certain trends, CST looked at what major international organizations have to say on the issue. 3 Innovation, a fundamental strategy Creation, management, and diffusion of information The need for a long term vision Like the upper levels of government, municipalities in general are of real interest to international organizations, where innovation is considered an essential source of positive strategies. Still, they have conducted few studies to pursue the subject. In the eyes of international organizations, the process of innovation in municipalities depends on the creation and management of information and knowledge, as well as their dissemination among the various players concerned. This is why a number of organizations 4 have recently spearheaded projects to distribute information on best municipal practices. For innovation in local governments to be successful, major organizations stress that all players concerned must adopt a common long term vision and coordinate their actions Municipalities as Innovators? While there seems to be a consensus on the need to innovate, only two studies have concentrated on innovation in municipalities. Results of a U.S. study Results of a Québec study A group of American researchers studied innovation by means of a survey on financing tactics adopted by municipalities in a period of fiscal restraint. The last section of their study documented and analyzed innovations by U.S. municipal governments within the given context. The results showed no link between innovation and municipal budget limitations. In Québec, the minimal data available on the challenges of innovation has been gleaned from a similar study conducted in 1996 by Groupe de recherche sur l innovation municipale (GRIM). The questionnaire was adapted from that used in the U.S. survey and was given to elected representatives and municipal administrators. Respondents preferred internal innovation, particularly in the areas of municipal management and administration. 3 Notably OECD, the UN, and its many agencies 4 The IDeA Knowledge Web portal by the Local Government Association (LGA) in Great Britain at the UN Website Best Practices at and directories published by organizations that award innovative governments are good examples of ways to promote municipal best practices. 4

5 6.3 Innovation in Québec Municipalities Method used Themes addressed In order to collect the data needed to analyze innovation in Québec municipalities, CST surveyed a sample of 627 respondents made up of managers and secretary-treasurers in municipalities with populations under 50,000 and directors of municipal services in municipalities of 50,001 and over. CST consulted a variety of documentation and held focus groups beforehand to help prepare the survey and facilitate interpretation of the results. Data was collected on the following themes: land use planning, public works, local democracy, and economic development. The council limited its study to these four themes in order to keep it manageable. The themes were selected by consulting with stakeholders in the field. Municipalities may have also innovated in areas such as transport, public security, recreation, and culture, but these projects were excluded from this study General Observations Of the local municipalities surveyed, 36.4% had innovated over the last three years in at least one of the four themes covered. 69.3% of RCMs had innovated The larger the municipality (in population or operating budget), the greater the chance they had innovated. Among municipalities with populations of under 2,500, 28.3% report having carried out innovation projects. All those with populations of 50,001 and over reported having innovated in at least one of the four theme areas. The probability of innovation rises in tandem with a dedicated science and technology budget and the number of university or college graduates in the municipal government Non-innovating Municipalities Some municipalities reported an unsuccessful attempt to introduce an innovation over the last three years. The main reasons for failure 5 were the following: - Budget constraints - Legislative and regulatory constraints - Lack of interest among elected officials The municipalities that did not attempt to innovate in any of the four theme areas over the last three years gave the following reasons, in order of importance: 1. The risk of failure is too high. 2. Collective agreements stand in the way of innovation. 3. Municipal officials and the public do not see the importance of innovation, even if the funds are available The Importance of Various Factors All Québec municipalities and RCMs innovators and noninnovators alike used the same sources of information and reported the same obstacles and levers for innovation. 5 The most often cited category was other. When municipalities were asked to explain, they listed problems such as technical difficulties, a lack of vision among the people involved in the process, and insufficient public participation as reasons for failure. 5

6 Sources of Information on Innovation In general, municipalities drew on the following sources for information on innovation initiatives, in descending order: - Government departments and organizations and their publications - Economic development organizations and their publications - Symposiums, conferences, and trade shows - Associations and NPOs and their publications - Trade publications and the print media These sources of information appear to have little impact on innovation, since innovating and non-innovating municipalities all reported consulting them. The only exception was the Internet, which seems to have a positive impact on a municipality s ability to innovate. Obstacles to Innovation Whether they had innovated or not, municipalities generally cited the following obstacles, in descending order: 1. Budget constraints 2. Shortage of qualified personnel 3. Resistance to change 4. Provincial laws and regulations The first three obstacles are essentially linked to internal factors, but can also be attributed to external factors such as a reduction in transfers from the upper levels of government. Among the laws and regulations that could represent obstacles, those regarding the environment, land use and urban planning, and municipal finances were most often cited. Budget constraints, a shortage of qualified staff, and a lack of motivation among employees were shown to be particularly significant obstacles in municipalities with populations of under 10,000. Keys to Successful Innovation According to the survey, the following are the main levers for innovation, in descending order: 1. Active involvement of elected officials 2. Active involvement of municipal managers 3. Availability of financial resources 4. Active involvement of employees 5. Government programs 6. Intermunicipal agreements The importance placed on active involvement by elected officials and city managers illustrates the essential role of leadership in innovation. As found above, the availability of financing was shown to be a determining factor for innovation. Small municipalities consider government programs and intermunicipal agreements to be very important levers for innovation since they make it possible to share the risks and costs involved. 6

7 6.3.4 Experiences in Municipal Innovation In order to better understand the innovation process, the survey included a special series of questions for municipalities that had innovated over the last three years in one of the four areas. The Instigators of Innovation Municipal innovation was instigated by the following groups, in descending order: 1. Elected officials (mayors, municipal counselors) 2. City managers 3. Service and department managers 7

8 Motivating Forces Municipalities were motivated to innovate over the past three years by the following objectives, in descending order: 1. Stepping up the quality of services offered to the population 2. Improving operations 3. Increasing democratic participation 4. Optimizing financial resources 5. Complying with legislation and regulations Type of Approach Although survey results are somewhat perfunctory, they show that planning was used more commonly than the trial-and-error approach (terminology taken from the study discussed in chapter). Types of Innovation The innovations described in brief by respondents have been classified as follows: 1. Technological: Purchase or use of new products, particularly in geomatics Purchase or use of new procedures for water treatment or pavement resurfacing 2. Social: New services for the public, notably through information and communication technologies 3. Organizational: New methods and organizational structures Obstacles Encountered Innovating municipalities reported no serious obstacles to introducing innovations (no single obstacle received an overall combined rating of more than 5/10). Those obstacles that were encountered varied depending on the type of innovation. Keys to Successful Innovation The main factors behind the successful introduction of an innovation were the following, in descending order: 1. Active involvement of city managers 2. Active involvement of elected officials 3. Active involvement of staff 4. Availability of financial resources Active involvement by city managers was the number one success factor for all three types of innovation, followed by staff involvement, which is particularly important for technological innovation Linkages Sources of Information 8

9 The majority of innovating municipalities got most of their information from contacts at government departments and organizations and from government publications. About half of those that innovated used the Internet as part of the process and considered it a useful or very useful tool. Partners in Innovation The majority of the municipalities that introduced a technological, social, or organizational innovation (over the last three years) reported working in partnership with 1. Suppliers 2. Consulting firms or private laboratories 3. Government departments or organizations The Impact of Innovation Innovation generally had positive internal or external spinoffs for the municipality and its population. The main internal impacts were the following, in descending order: 1. Greater openness to change 2. Better communication within the municipal government 3. Development or maintenance of a feeling of belonging to the organization The main external impacts were the following, in descending order: 1. A better image of the municipality 2. Improvement of the municipality s overall positioning (competitiveness, credibility) 6.4 Best Practices Outside Québec Directories of best practices Trends The transfer of knowledge between municipalities can enrich the process of innovation. This is why a number of organizations have documented North American and European municipal innovation practices and distributed the information so other organizations can use them and adapt the best practices for their own needs. One common feature of the practices described was interaction between municipal governments and various players in the milieu, proving that municipalities rarely innovate in a vacuum. Innovations were implemented to address challenges as fundamental as social development and quality of life. This applies equally to innovations of a social, organizational, and technological nature. 9

10 6.5 Resources Available to Québec Municipalities Municipalities have access to resources to help them in the innovation process. These resources are not only indispensable tools, they also serve to promote innovation. The following are the main innovation support tools available. Government Support for Innovation The main government policies supporting innovation are the Québec Policy on Science and Innovation and Canada s Innovation Strategy. Each includes references to the municipalities, but only of a very general nature in terms of the issues addressed in this report. Government support for innovation is fragmented, which makes it difficult to identify the appropriate resources. The only programs that specifically promote innovation in municipal governments are the Canada-Québec Infrastructure Program (CQIT), the third component of which deals with experimentation with of new technologies, and the Green Municipal Funds for environmental projects. Municipalities also can also draw on a variety of funding programs that do not specifically target innovation. Municipal Workers and Training Colleges and universities offer a multitude of training programs that help prepare students for positions in the municipal government. Professional development is provided to municipal employees through various municipal and professional associations. Municipalities can train their staff through programs offered by Emploi-Québec. Sufficient data has not been collected to characterize the municipal labor force. Statistics organizations offer little data on the subject. 6.6 Main Findings The importance of innovation Need for targeted action Considerable risks In light of research undertaken for this report, it is clear that local and regional municipal governments must work to develop innovative practices. Innovation produces effective strategies to help municipalities overcome the many challenges they face. The vitality of a community depends on its creativity and ability to develop innovative projects that are attuned to the needs of the population. Because municipalities and public organizations in general are markedly different from the private sector, they require intervention specifically adapted to their needs. Canadian and Québec government innovation support programs and measures essentially target private enterprise and technological innovation. 6 A separate strategy is needed to foster innovation in municipal governments. The availability of financial resources is fundamental to municipal innovation. In fact, innovation should often be seen first and foremost as an investment whose benefits financial and other are only apparent after the innovation has been put into place. Without the necessary capital, municipalities cannot afford the costs and risks associated with innovation, even if it leads to considerable savings down the road or a notable improvement in delivery of fixed-cost services. Partnerships between municipalities or with external players like private enterprise or the provincial 6 As reported in the 2003 CST report L innovation dans les services : pour une stratégie de l immatériel (Innovation in the service sector: toward a strategy for the immaterial). 10

11 government are particularly desirable since they provide the benefit of third party experience and skill and a sharing of the risks inherent to the process. The importance of flexibility and freedom of action Information, a key resource for innovation Obstacles to innovation Keys to successful innovation Innovation, an organizational responsibility Limited statistical data Flexibility and freedom of action are other factors that promote innovation. The laws and regulations that govern municipalities serve to protect the public, but they should also be flexible enough to allow each municipality to create the best solutions for the community. Information sharing and knowledge transfer promotes pooling of expertise and helps municipalities stay on track. To innovate, they need fast access to information on research, best practices, assistance programs, and their changing environment. Financial barriers are the number one obstacle to municipal innovation, followed by a shortage of qualified personnel, resistance to change, and legislative and regulatory constraints. The main factors of success are the active involvement of elected officials, municipal managers, and employees, along with the availability of financial resources, government programs, and intermunicipal agreements. The obstacles and levers to innovation are mainly tied to the internal operations of municipal governments. To step up innovation, municipalities must foster creativity and leadership among elected officials, directors, and employees. Lastly, a lack of statistical data on local and regional municipal governments must be mentioned. The only data available pertains primarily to territory, not the specific features of municipal government as a public body. To better understand how these organizations operate, further studies are required. Tools such as case studies can be used to enhance our understanding of the challenges of innovation in municipal government. 6.7 Recommendations In light of the review of innovation in Québec municipal governments and the findings that have emerged, CST s recommendations and suggested courses of action focus on four objectives. The first is to develop a better understanding of the state of innovation in municipalities and draw up a strategy to encourage them to innovate more (recommendation 1). The second is to offer municipal governments concrete tools with a view to rapidly strengthening their capacity for innovation (recommendation 2). The third directly targets municipalities by suggesting they adopt in-house measures to promote innovation and creativity (recommendation 3). The fourth and final objective is to boost knowledge of municipal governments and their characteristics in terms of innovation (recommendation 4). Municipality refers both to local municipalities and regional county municipalities (RCMs). CST has purposefully limited the number of recommendations in order to encourage fast, comprehensive implementation. 11

12 RECOMMENDATION 1 That Ministère des Affaires municipales, du Sport et du Loisir and Ministère du Développement économique et régional Means: Improve their assessment of innovation in municipalities Develop a strategy to foster greater innovation in municipalities 1. Team up with Union des municipalités du Québec, Fédération Québécoise des Municipalités, municipal professional associations, unions, and academic institutions, and other community stakeholders to a. Produce a more detailed analysis of the state of innovation in municipalities to better understand the challenges and identify local particularities b. Promote innovation and convince municipal leaders how important it is to innovate 2. Use the results of the analysis to develop a strategy of action focusing on the following priorities: a. Define general objectives specifically adapted to municipalities and hinged on developing a culture of innovation b. Based on these objectives, adapt existing measures or suggest new measures that correspond to the specific realities of municipal government, with particular emphasis on Funding R&D and pilot projects in municipalities Hiring qualified workers in all municipal fields to improve prospects for innovation and raise the odds of success Provide professional development opportunities for municipal employees Foster networking between Québec municipalities and with municipalities elsewhere in Canada and abroad to encourage them to adopt the practices proven most effective Promote exchanges and internships outside municipal organizations for employees and elected officials to promote a sharing of ideas among organizations Scale up pilot projects and innovation transfers between municipalities 3. Bring all government departments and organizations involved in municipal affairs into the process of developing and implementing this strategy to ensure coherent, efficient government action 12

13 RECOMMENDATION 2 That Ministère des Affaires municipales, du Sport et du Loisir and Ministère du Développement économique et régional work to strengthen municipalities capacity for innovation Means: 1. Add an innovation component to municipal aid programs, similar to component III of the Canada-Québec Infrastructures Program (CQIP) 2. Take local and regional constraints into account and pursue efforts to streamline laws and regulations governing municipalities in order to promote implementation of innovative practices 3. Offer municipalities and the Government of Québec the option of signing agreements on innovation under which goals and objectives are negotiated between the two parties, but municipalities obtain the freedom to design and implement measures best suited to their needs 4. Promote partnerships to share the risks and benefits of innovation, particularly between municipalities and external stakeholders (suppliers, consulting firms, private laboratories, academic institutions), the provincial government, and especially institutes of higher learning 5. In cooperation with the partners involved, broaden the mandate of Centre de promotion de l excellence en gestion municipale to incorporate the following objectives: a. Index, document, and disseminate best municipal practices from Québec, the rest of Canada, and abroad b. Summarize and distribute the results of research conducted in cooperation with Villes-Régions-Monde 7 and Observatoire du MAMSL c. Draw up and distribute a directory of innovation support programs for municipalities d. Draw up and distribute a directory of academic and professional training programs e. Compile and distribute publications and information produced by partners f. Design and implement a Web portal on innovation and improving municipal practices 8 7 Villes Régions Monde (VRM) is a university network for urban and regional studies dedicated to fostering cooperation, research, and training as well as developing and disseminating results. Backed by some ten universities, the team is made up of Québec s top researchers in territorial organization, management in the local sector, and new urban issues. Further information available online at 8 The IDeA Knowledge Web portal by the Local Government Association (LGA) is a good example of a tool to promote and improve municipal practices. 13

14 RECOMMENDATION 3 That local municipal governments, regional county municipalities (RCM), Union des municipalités du Québec, Fédération Québécoise des Municipalités, and municipal professional associations take steps to stimulate innovation among elected officials, employees, and municipal suppliers Means: 1. Raise awareness among elected officials and members of professional associations regarding the importance of innovation in optimizing municipal strategies for action. For example, UMQ, FQM, and professional associations, at their conferences, should present workshops on innovation in municipal governments. 2. Encourage employees and elected officials to take part in training programs offered by associations 3. Adapt human resource management practices to encourage innovation and creativity among workers 4. Offer exchange and apprenticeship programs outside the municipality so employees and elected officials can keep their knowledge up to date and see innovative practices first hand (large associations are responsible for putting into place exchange and apprentice programs that meet the needs of the field) 5. In partnership with external players, develop innovative projects to help strengthen expertise within all organizations involved 6. Promote innovation among municipal suppliers by working innovation criteria directly into the process of tendering and awarding of municipal contracts RECOMMENDATION 4 That Ministère des Affaires municipales, du Sport et du Loisir improve its statistical coverage and understanding of municipal government operations and the municipal innovation process Means: 1. Work with Institut de la statistique du Québec to compile basic statistics on municipal governments in order to fill current knowledge gaps 9 2. Continue to develop and implement municipal performance indicators to monitor changes in the quality of services and provide effective benchmarking tools for comparing municipalities, particularly in terms of innovation 9 For example, the U.S. Census Bureau periodically publishes statistics on local and regional government. See the organization s Website at for more information. 14