Sacramento, Calif., Outlines City-Funded Innovation Strategy

Mayor Kevin Johnson announced new initiatives from Sacramento's city government to support business creation, job growth and innovation as dozens of local coders gathered Saturday at The Hacker Lab co-working space in Midtown to participate in the National Day of Civic Hacking.

by / June 6, 2016
Mayor Kevin Johnson (second from left) applauds his leadership team as he explains how the city will use its a new fund to invest in local companies and promote innovation in the local economy. Matt Williams / TechWire

The city of Sacramento, Calif., will invest in local companies and start a grant program as part of a multimillion-dollar plan to bolster the community's innovation economy, Mayor Kevin Johnson said Saturday morning.

The city is going to invest $1 million in local companies this year, Johnson said. Selections will come from proposals submitted to a new mayoral tech council. The investments potentially could yield a profit for Sacramento that would be used to continually replenish the city's $10 million Innovation Growth Fund, the mayor explained.

Johnson acknowledged it's unusual for a city government to be making these types of investments on its own, and that activity of this magnitude likely isn't happening elsewhere across the country.

"So this is kind of our first phase and our first foray into this innovative space where people around the country are starting to say, 'Sacramento is truly starting to become a hub of innovation, entrepreneurship and technology.' And it's something I'm really, really proud of," Johnson said.

As part of the multi-pronged approach, Sacramento also is launching a new grants program of up to $1.5 million called "RAILS." The acronym, which purposely aligns with the city's railroad heritage, stands for Rapid Acceleration, Innovation and Leadership in Sacramento.

"We're trying focus on what I describe as startup enablers — so what are the different things that help startups in the city get off the ground," Abhi Nemani, Sacramento's interim chief innovation officer, said about RAILS.

Nemani said those factors are leadership and training programs, funding for innovation events, and acceleration and business development programs. The application process for RAILS will open later this month; grants will be awarded in amounts of $25,000 or more to companies, nonprofits and other organizations.

Furthermore, Sacramento also plans to make a $1 million strategic investment in a global accelerator and venture capital seed fund called 500 Startups. In return Sacramento-area startups will become part of the accelerator's portfolio and be able to leverage its technical expertise, Johnson said.

Fueling all these efforts is the city of Sacramento's Growth Innovation Fund approved by the City Council last year. Currently at $8 million to $10 million, the fund is believed to be one of the largest of its kind in the nation. With its backing, Nemani is creating a city innovation office.

Johnson, who has about six months left on his term in office, said he believes the new innovation initiative will continue after he leaves. He said the two top candidates for mayor are "fully committed" to the innovation office and to keep the fund going.

"You're going to have continuity. This is going to be part of the fabric of Sacramento for many, many years to come," Johnson said.

The mayor outlined the new steps the city is taking to support business creation and startups as dozens of local coders gathered Saturday at The Hacker Lab co-working space in Midtown to participate in the National Day of Civic Hacking. Sacramento's version of the event challenged volunteers to build solutions for the city's federally designated "Promise Zone" neighborhoods that are economically disadvantaged.

Participating teams are competing for $2,000 in prize money. The contest concludes Saturday evening.

Many organizations are involved in Saturday's code-a-thon, such as Sacramento CIO Maria MacGunigal and other city staff, California Health and Human Services officials, local tech incubators, and Code4Sac.

Code4Sac leader Joel Riphagen said a few days ago he received a call from the White House expressing interest in the outcome of Sacramento's coding event because it's focusing on the Promise Zone.

"You have national attention of what you're doing here today, and there is definitely a chance that if you come up with something good, it could spread," Riphagen said.

This story was originally published on TechWire.

Matt Williams Contributing Writer

Matt Williams was previously the news editor of Govtech.com, and is now a contributor to Government Technology and Public CIO magazines. He also previously served as the managing editor of TechWire, a sister publication to Government Technology.2