San José Tackles Open Innovation for Smart Cities

How Silicon Valley's Capital is Co-Creating The Smart City of Tomorrow

The capital of Silicon Valley, San José, California, aims to be the most innovative city by 2020 [1]. In March 2016, Mayor Sam Liccardo released a Smart City Vision Statement outlining how the city would use its tech innovation platform to “promote concrete benefits in safety, sustainability, economic opportunity, and quality of life for our constituents.” [2] Chief Innovation Officer Shireen Santosham (HBS MBA 2008) was tasked to lead the charge and the Mayor’s Office of Technology & Innovation (MOTI) was formed. With a small team of three and modest budget, MOTI has started leveraging open innovation to build a smart city that delivers services, goods and policies effectively, efficiently and sustainably. [3]

It’s important for San José and MOTI to apply open innovation to its smart city development for three reasons. First, smart cities’ technology and design approaches have yet to be established and constituent needs are highly varied. In these cases, open innovation is reported to have significant advantages. [4] Second, smart city development requires expertise not traditionally seen within government. As emerging technologies continue to rapidly develop and play an increasingly important role in people’s lives, sourcing data science, design and engineering talent will be critical. Third, emerging technology is mostly being developed in the private sector. Thus, San José not only needs to source innovation from individuals, it also needs to source resources from private sector companies. Ultimately, the city needs to engage in the “co-production” of solutions [5] and decide whether to tap innovation through competitive markets or collaborative communities. [6]

To address the challenge of open innovation that San José is facing, MOTI has implemented several initiatives in the short term to reach 2020 goals. These initiatives include the Unleash Your Geek Challenge [7], Industry Roundtables for autonomous vehicle (AV) pilots [8], and a Demonstration Partnership Policy. [9] The Unleash Your Geek Challenge is “crowd-powered innovation” in the format of a contest. [10] Its first run challenged the public to create solutions to help San José with graffiti removal. The winning team (out of 140 submissions) devised a way to equip drones with spray paint and have them remove graffiti from hard-to-reach places.

Through the Industry Roundtables for AV pilots, MOTI created a competitive market among companies interested in deploying their technology across the city. Held in 2017, these roundtables brought together several industry experts and outlined community use cases and needs for AV pilots. MOTI then released an AV Request for Information (RFI) that invited companies to submit ideas for AV pilots. After receiving 30 submissions, San José decided to work with a select few to launch proposals, including Mercedes-Benz and Bosch. [11] Lastly, the city’s Demonstration Policy allows it to enter into partnerships with private sector companies to demonstrate solutions to issues on a small scale without having to undergo standard, lengthy procurement processes. For example, MOTI has been able to work with companies like Facebook to test new technology for street-level WiFi [12] and with Box to pilot its new AI feature for storing City Council meeting recordings. [13]

Despite short-term efforts to spur open innovation, the long-term horizon for San José’s vision is less clear. Mayor Liccardo has been a champion for technology-led innovation since taking office, but it remains to be seen whether future mayors will be advocates for this strategy as well. Furthermore, given that San José has a manager-council form of city government (where the mayor and City Council set policy and a non-elected city manager executes that policy), open innovation work may take longer to scale because responsibility is diffused across multiple parties. Given the current state of the Mayor’s office and the open innovation megatrend, leadership should focus on forming more collaborative communities to support bottoms-up “co-production” that exist outside of local government, as well as leverage big data from city sources to crowdsource city needs and solutions. The city has started to make strides in both of these areas but neither has reached scale. For instance, in July 2018, MOTI partnered with IDEO to host a community “make-a-thon” where teams came together to applying emerging technology solutions to city problems. The Mayor’s office is also hiring a Chief Data Officer who will be focused on “making data open and accessible” and “building relationships with Silicon Valley companies.” [14]

To summarize, open innovation will continue to be important for local government when designing the smart city of the future. In order to be the most innovative city, San José will have fully embrace and adopt open innovation within its city offices, across its constituencies and with private players. The city has thus far been able to leverage open innovation in a few key areas including transportation and infrastructure. However, moving forward, how might San José manage open innovation for its smart city development (1) at scale and (2) for the long-term?

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[1] “San José Aims at Most Innovative City by 2020”, Smart Cities Connect Media & Research, November 2017,, accessed November 2018.

[2] Mayor Sam Liccardo, San José Smart City Vision, March 2016,, accessed November 2018.

[3] Krassimira Antonova Paskaleva, “The Smart City: A Nexus for Open Innovation?”, Intelligent Buildings International; London Vol. 3, Iss. 3, 2011.

[4] Kevin Boudreau, Kevin Lakhani, “How to Manage Outside Innovation”, MIT Sloan Management Review; Cambridge Vol. 50, Iss. 4,  2009.

[5] Krassimira Antonova Paskaleva, “The Smart City: A Nexus for Open Innovation?”, Intelligent Buildings International; London Vol. 3, Iss. 3, 2011.

[6] Kevin Boudreau, Kevin Lakhani, “How to Manage Outside Innovation”, MIT Sloan Management Review; Cambridge Vol. 50, Iss. 4,  2009.

[7] San José Mayor’s Office of Technology & Innovation, Unleash Your Geek Challenge, May 2016,, accessed November 2018.

[8] Nancy Torres, “How San José Launched its Autonomous Vehicle Vision”, Data-Smart City Solutions, February 2018,, accessed November 2018.

[9] San José Mayor’s Office, Demonstration Partnership Policy, September 2011,, accessed November 2018.

[10] Kevin Boudreau, Kevin Lakhani, “Using the Crowd as an Innovation Partner”, Harvard Business Review; Vol. 91 Issue 4,  2013.

[11] Kayla Nick-Kearney, “San José, Calif., Launches Self-Driving Vehicle Pilot”, Government Technology, November 2018,, accessed November 2018.

[12] Russell Brandom, “Facebook’s new gigabit Wi-Fi system is coming to San José”, The Verge, April 2016,, accessed November 2018.

[13] Henry Tsai, Where there’s a Skill there’s a way: Piloting Box’s new AI feature in San Jose”, Medium, July 2018,, accessed November 2018.

[14] Kayla Nick-Kearney, “San José Is Looking For Its First Chief Data Officer”, Government Technology, June 2018 2018,, accessed November 2018.



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Student comments on San José Tackles Open Innovation for Smart Cities

  1. Really enjoyed reading this! To respond to your questions: Since Mayor Liccardo’s initiatives have demonstrated that open innovation can help drive innovation in San Jose, the mandate for open innovation should now be picked up by civil servants who are not elected, such as the office of the city manager. (This team could of course work collaboratively with the mayor’s office.) This will help ensure that the initiatives are a long-term priority. Another possibility is to involve local high schools and universities by having students pilot technology projects in their local communities. Students are often able to develop imaginative and relevant solutions for their communities. Such a program would have the added benefits of scaling the number of ideas being tested, involving youth in open innovation and community development from a younger age, and tapping into new engineering talent at universities.

  2. Thanks for your post Nancy, this is awesome! I agree having a Chief Innovation Officer and open innovation in city governments is incredibly important to the future services a city can provide. I was wondering though how San Jose has prioritized certain issues as it decides what to tackle first? With a limited budget and resources, I imagine prioritization is extremely important in getting things done. I also was wondering what lessons from San Jose you think can be taken to cities across the country? If San Jose does succeed in becoming the most innovative city in the country, it’s important that we spread its success story in an effective way so that other local governments can tackle similar issues, even without the benefit of a larger government and the close proximity to the tech center of the world. And my last question is how has San Jose local government worked alongside state government? I wonder if a partnership across innovation teams could help bring its innovation to scale and ensure a longer-term outlook.

  3. Thanks for sharing, Nancy! I enjoyed reading this. I think one way in that San José and Mayor Liccardo can think about managing open innovation for smart city development at scale is to share these best practices with the US Conference of Mayors. As the potential for smart cities and public-private partnerships continues to grow, it will be important to coordinate with leaders of other smart-city initiatives to maximize influence secure buy-in across constituencies. I agree that a community-driven approach is the best one to take when thinking about sourcing new ideas. MOTI could also consider the potential for open innovation in partnership with academic institutions to develop new ideas for smart-city solutions.

  4. Really enjoyed reading this, Nancy! You definitely picked the best topic 😉

    It sounds like San Jose is a dynamic Smart City, implementing cool, innovative projects across different disciplines. Just like with other municipalities, though, when I read about their different initiatives it brings the question of how deliberate they are being in developing a long-term strategy (vs. implementing individual, highly relevant projects here and there, without a cohesive storyline). It sounds like Mayor Liccardo is acting as a beacon and ensuring that a full-picture vision is developed, but I worry how much of that can change throughout different election terms. I think that having this clear vision of where the city should go technologically is even more relevant when crowd sourcing innovation ideas. Without a consistent vision and defined criteria on what constitutes a project that is not just hot, but also well-aligned and value-adding for the city, there rises a risk to end up with a handful of disconnected projects.

  5. Really enjoyed reading this! I think it would be interesting to see what MOTI and other cities are doing to source issues or ideas for city improvement from their ultimate consumers, the citizens living in the city. I know from experience that the tools that citizens have at their disposal to suggest and spur action on simple changes (such as the addition of a crosswalk) are often limited. Collecting these concerns in a structured and robust way would allow the city to collaborate with both its citizens and its partners to develop meaningful solutions to problems. This connects with the lean methodology in that some of the greatest solutions come from ideas generated by those on the front lines of the operation.

  6. Thank you for a great article Nancy! I think this is a very interesting topic, and I enjoyed learning about the initiatives San Jose is implementing. A question that came to me was whether using open innovation to shape this smart city works only in a place like Silicon Valley, that is a hub for so many start-ups and tech companies or could it be replicated elsewhere. Do you think a more top-down approach would be better in less tech-focused cities to help prioritize the development?

  7. An exciting application of Open Innovation.
    I believe that their current approach to innovation will allow them to deploy unique but single and disconnected initiatives. Even though the impact of these solutions is high because San Jose can leverage on the geographic proximity to Silicon Valley and its big players, the scalability of the model is limited. To scale, I think that an Open Innovation model but in collaboration with other cities would enable governments to identify robust and reliable solutions and would grant companies a more attractive market to develop such initiatives. Besides, all the cities could also benefit from sharing best-practices. Thus, they could minimize the risks of implementing ineffective projects or the learning curve costs during the implementation of the solutions.
    Regarding the long-term challenge of applying Open Innovation, I think that the main problem relies on the disconnection between strategy definition (Mayor) and strategy implementation (City manager). So, to solve these discrepancies, strategy definition and implementation should be aligned and should contemplate both short-term and long-term projects. Under this approach, Open Innovation could be applied for both terms, always pre-defining the scope of each initiative before launching it. The effectiveness of the long-term solutions provided would be probably related to the volume of cities involved in the Open Innovation initiative and to the grade of legal certainty governments could offer for the implementation of these projects.

  8. I like that San Jose is empowering its constituents to be part of the solution to address city needs. This gives everyday people a greater sense in ownership and provides the city with ideas that they were unlikely to come up with on their own. While the manager-council form of city government may take longer for concepts to scale, I think San Jose is well positioned to implement these changes. I believe this to be true because the city manager is not an elected official and therefore generally speaking has greater longevity. So while the concept of open innovation is being driven by the mayor, if the city manager believes in the system they will continue to implement the practices even if a new mayor is elected.

  9. Great read Nancy, thank you so much for sharing. I am particularly interested in exploring if there is a way to reorganize local government to make it more conducive to innovation. I think we’ve seen it to some extent with the small scale roll outs of the ideas, but should San Jose take more steps to create a more efficient organization? What are the legal barriers to this? I’m concerned that in the end open innovation can’t work in a bureaucratic organizations so the underlying fabric of the city needs to be changed.

  10. Hi Nancy, great read! In response to your last question, I think the key to San Jose managing these crowd-sourcing programs in the long-term is commitment from local government. Political priorities change with new administrations, but if investors can trust that these projects have long lifetimes, there will be a greater appetite to front capital and commit to the city’s vision. This can only be done if all the cities’ stakeholders are similarly committed to the program and will thus, push politicians to keep focus.

  11. Very interesting article and a fascinating application of open innovation! I think to make this sustainable over the long-term the city will need to be very clear on where innovation has the highest return to the city, and focus on those areas. By setting clear goals, they can help focus the innovation to areas of highest need. I also think that growing private partnerships would be a tremendous way to access large amounts of capital that they might not be able to access on their own.

  12. Thank you for this interesting article Nancy! I think its great that San José is using open innovation as a means to get around the lack of expertise in “smart city” technology that exists in a more traditional government enterprise. There are other cities working to develop “smart cities” – for example, Sidewalk Labs (part of Google) is designing a Smart City in a section of Toronto ( I am curious if the cities tackling this challenge could work together to create something greater than each city could develop on its own – would this contradict San José’s goal to be the most innovative city?

  13. Great piece, Nancy! (Although I am definitely biased.) It sounds like San Jose is well on its way to becoming a smart city, although I do hear your hesitations around the longevity of some of these initiatives. What happens when Mayor Liccardo leaves office? Who has the ultimate accountability for these initiatives? Term limits are hugely limiting in the case of city government, and I personally am concerned about whether and how the smart city technology will be woven into the cloth of the city. I think private-public partnerships will be key to solving this issue. Silicon Valley, where some of the brightest minds live and biggest checks are written, is sure to be open to helping San Jose think through is 20-year plan.

  14. Awesome read/topic, thanks Nancy! I agree that San Jose will have to work closely with private players, particularly on the financing side, to achieve their Smart City development goals. The public-private partnership structure seems to be a unique asset class that is continuously evolving. My concern is that the system can be ‘gamed’ and financial investors will simply end up shifting risk on to taxpayers. I imagine that finding alternative funding methods will the biggest hurdle for other cities looking to mimic San Jose.

  15. This is fantastic, Nancy. I love looking into civic infrastructure and how cities can improve their services, so this was so interesting to read. San Jose is, of course, blessed to be surrounded by tech companies that want to use it as a base for showcasing new technologies and demonstrating corporate citizenship, but I think that these kinds of endeavors can be undertaken by cities all over the world. Private companies can operate so nimbly and efficiently when utilized correctly, but too many governments are beholden to burdensome procurement processes or union contracts that stifle innovation. With the proper coalition building, I think these can be overcome, but demonstrating the increased broader utility to the city will be key.

    One question I have is: how can cities installing digital infrastructure ensure everything won’t be obsolete in five years? Digital technology moves faster than road technology–there will need to be modularization to allow for systems to be swapped in and out.

  16. Fascinating post thank you Nancy!

    A few questions on my mind:
    (1) How can the government attract the brains of top tech talent on these issues?
    (2) In using data, does the government merit a higher bar for privacy concerns than the private sector?
    (3) To address the concern on longevity, could the “Chief Data Officer” and his or her office be enshrined as a non-political appointee, similar to running a city’s water and sewage authority, Bridge and Tunnel Authority, or the Fed?

    Related to this article, my brother started a non-profit focused on helping local communities leverage nearby universities in building smarter cities. This is one approach to helping to plug the capability gap and attract smart, fresh thinking into solving some of these challenges. I believe he has met with San Jose.

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