We are playing small ball with innovation in government. That needs to change — and the most compelling argument for doing so is an economic one.

The smallness or experimental nature of much of what is called “government innovation” today takes nothing away from the excitement and learning spawned by successive rounds of hackathons and the nascent but burgeoning civic tech sector. Nor is it a poor reflection on the people whose careers are dedicated to applying fresh thinking to doing the public’s business, including the 20 or so chief innovation officers who now serve in states and localities across the country who stand alongside or, in some cases, on the shoulders of public CIOs.

No small part of the problem is a conventional wisdom shaped by popular political and media narratives. Naysayers characterize “government innovation” as an oxymoron. They fundamentally don’t like government, and they have had a pretty good run, seizing on each headline of apparent government failure in its use or investment as conclusive proof of the folly of letting the public sector play too close to the edge of innovation.

Not only is there confirmation bias in this narrative — “See, I told you it was the problem” — it remains what it always has been: ahistorical and wrong. In his new book Innovative State, which I review here, Aneesh Chopra lays out an expansive history of innovation in government that stretches from the Civil War to today’s civic hacking movement. You might expect the nation’s former first geek* to argue that open data, to cite a contemporary example, “fuels private industry and improves services for everyone.”

(*Chopra was the first person to have the nickname “first geek.” That’s like first lady, only different.)

It might be more surprising for government’s role in innovation to be embraced by a cloud computing pioneer who doubles as a leading libertarian-conservative thinker and author. Enter Jim Manzi, the founder and chairman of Applied Predictive Technologies with side gigs at the Manhattan Institute and the National Review. In a new essay published in National Affairs called The New American System, Manzi affirms the importance of government’s role and calls for it to be expanded: “The sweet spot for most government research funding will likely be visionary technology projects, rather than true basic research on one extreme, or commercialization and scale-up on the other. We have a long track record of doing this well and an existing civilian infrastructure that can be repurposed.”

In announcing a new Silicon Valley Alliance last year, Lockheed Martin reminded us that the “government market catalyzed the initial growth of all high-tech industries in the San Francisco Bay Area.” The opportunity as the company saw it was now for an incumbent player to “reconnect today’s companies to that market, which continues to be substantial despite a challenging economy.”

A recent Deloitte University Press analysis of more than 300 prize-based challenges run by or on behalf of 50-plus federal agencies hints at the potential based on crowdsourcing innovation. Trailing all other goals — raising public awareness (37 percent), building prototypes and launching pilots (29 percent), attracting new ideas (24 percent), mobilizing community action (7 percent) — stimulating market growth was reflected in a single 1 percent of the challenges. Yet compared to small purses of as little as $1,000 in the more common categories, the median amount spent in the name of market growth was $10 million, with some valued at as much as $15 million.

Government is more than a venture capitalist with patience or a market fixer. Mariana Mazzucato, a professor in the economics of innovation and author of The Entrepreneurial State, reminds us that the great lesson of the Internet is that government was uniquely able to take on the crazy risks of failure of building something that audacious.

As governments — including states and localities — increasingly let go of infrastructure, systems and processes that are less necessary in today’s world and embrace flexibility, scalability, agility, simplicity and partnership, they can not only become more focused organizationally but also provide important economic catalysts in the communities they serve.

Paul W. Taylor Paul W. Taylor  |  Chief Content Officer, e.Republic Inc.

Paul W. Taylor is the Chief Content Officer for e.Republic. He also serves as the Editor-at-Large of GOVERNING magazine. In his role as Chief Content Officer, Paul works with e.Republic’s editorial, research and conference teams to identify issues and content initiatives vital to public service, coordinating the combined resources of Governing, Government Technology, Emergency Management, Public CIO, the GOVERNING Institute and the Center for Digital Government and Center for Digital Education to ensure that relevant and useable content is comprehensively developed and delivered to e.Republic’s audiences.