Innovation and Data Use in Cities: A Road to Increased Well-being is part of a four-year collaboration between the OECD and Bloomberg Philanthropies to understand the source, structure, and environment that allow local public sector innovation to flourish.

The 2019 the OECD/Bloomberg Philanthropies report Enhancing Innovation Capacity in City Government was the first to answer two questions about local public sector innovation: (1) why city governments develop the capacity to innovate and (2) how they do it. The results of that research highlighted a wide range of approaches to innovation across the 89 cities surveyed.

Some cities associated innovation with human-centred design, while others emphasised experimentation, or use of data analytics. But more striking was the convergence on what matters for innovation, where all cities reported leadership support as a success factor for local public sector innovation. Another common thread throughout the approaches, initiatives, policy sector choices for innovation, and definitions expressed by cities, is the use of innovation to improve well-being. However, only 16% of cities reported systematic and comprehensive evaluation of their innovation outcomes.

As a follow-up to that study, this report seeks to document the extent to which investment in innovation and data use improves well-being outcomes for residents. With a survey covering 147 cities, over an expanded geography and a more diverse range of cities, it allows for more insights and diversity of experiences, priorities, and approaches than the earlier survey. A key finding of the report is that cities with high innovation capacity and high data use practices scored better across 11 well-being dimensions, such as environment, housing, and city and life satisfaction.

In the middle of the project, the COVID-19 crisis hit local governments and leadership, and quickly, with profound impacts on a range of local services. In response to the pandemic, city governments demonstrated their agility by deploying innovation and data use in countless ways, from keeping public services available through digitalisation to promoting socially distant transport modes to contract tracing. While developing innovation and data use capacity had been just one of several priorities for cities beforehand, COVID-19 forced many cities into doing so at a breakneck pace—and demonstrated their value in the process. As cities gradually emerge from the worst of the crisis, action will be needed to cement gains made in innovation and data use competencies beyond COVID-19 response such as increasing data use capability, establishing a culture of innovation among all city staff, and securing the right human, financial, and institutional resources to continually improve resident well-being beyond the pandemic.

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