Something interesting is happening: local government are discovering startups.

There are signs in a few places that municipal governments are working with startups on new projects that could increase governmental efficiency and provide a leg up to the young companies.

The city of Fredericton is on a roll right now. The city’s not-for-profit internet provider, e-Novations recently slashed its fees so businesses and startups in the city pay about 75 percent less than companies in other Atlantic Canadian cities.

The city is also working on another initiative with HotSpot Parking, a local startup that came to prominence in New Brunswick Startup Weekend in March. HotSpot allows people to pay the parking meter digitally, so they can be in a store, realize time is running out, and feed the meter with their phone rather than running out to the street.

Founder and CEO Phillip Curley posted a great blog this month on how to work with government to get a product out into the marketplace.

“The government is not scary, nor is it (as the majority of my younger friends seem to think) out to get you,” writes Curley, who developed his idea while a student at University of New Brunswick. “The Government is just doing the best it can with the incredible amount of information it generates daily from millions of connection points.”

Word on the street is that Fredericton has another such collaboration in the works, and will announce it soon.

In Halifax, the city has launched its Open Data initiative, which has made public a few of its data sets so programmers can use them to design apps based on data analytics. This data will be used in the hackathon hosted by the Volta startup house next month, which aims to produce apps that can be used to improve the relationship between the government and her citizens.  

These initiatives are a big deal for a few different reasons. First, all startups need early adopters  and for business-to-business ventures these are usually large companies or organizations near the startup’s home base. Atlantic Canada suffers from a paucity of large companies, so that means early adopters are usually universities or government or a group based somewhere else. By working with startups, governments are not only finding technology that can help them do their job better; they are helping to develop a company that will create employment, pay taxes and can export its product.

Governments can’t help but notice the explosive growth of startups, especially of tech startups, in the region and several governments are correctly working slowly to help wherever possible. New Brunswick Premier David Alward has formed his Council on Innovation and Research, and officials from the Nova Scotia government are reaching out to the startup community to find out the best way to help.

I have a great deal of sympathy with the governments’ slow-but-steady position in this case. People elect politicians to show leadership, and governments are most frequently criticized for not taking action. But one of the central tenets of startup communities is that they must – absolutely must – be led by entrepreneurs.

So how do government show leadership while accepting that they should leave leadership to entrepreneurs? It’s a delicate balance, and government people I’ve spoken with understand that part of the process is listening and finding ways to support what the community is doing.

By and large they’re not jumping at every suggestion entrepreneurs put forward, but the municipal government initiatives are a big step in the right directions. Now is the time for startups to keep this relationship going. Curley has some great advice on approaching and working with the public sector. It will be great for the entire innovation sector if more people follow where he – an entrepreneur – is leading.