Michael Pegues, a relative newcomer to government, is the CIO of the second largest city in Illinois. Despite only being in the job for three years and having no background in local government, he has developed a passion for city work and has become an urbantech champion.

What makes Pegues’ case so interesting is that he has taken a much bolder approach to encouraging innovation than many other city CIOs. In my experience, cities often set up limited innovation zones where they experiment with technologies before rolling them out more widely. Pegues has eschewed this intermediate step and turned his city into one giant innovation sandbox through his 605 Innovation District project (605 being the first three digits of the five zip codes in Aurora).

It’s a bold move—and one that isn’t without risks. But the initiative shows how a forward-thinking CIO willing to embrace and successfully manage those risks can create a powerful dynamic for change.

A new model for urbanization

Innovation districts have emerged over the past two decades and are fast becoming a distinctive feature of smart cities. Each district acts as a well-defined, walkable area in a city where public and private sector participants work to attract economic opportunity and development with the general aim of revitalizing an urban location.

These districts are typically populated by research-oriented institutions, high-growth firms, and tech and creative startups. They include, or are surrounded by, a variety of amenities as well as residential and commercial properties.

The first innovation district was launched in 2000 in Barcelona, Spain. Today, there are thought to be over 100 around the world, including districts in Berlin, Cambridge, London, Medellín, Montreal, Seoul, Stockholm and Toronto.

Smart Aurora

Aurora, which is 180 years old, was traditionally a manufacturing town. Until around three years ago, Caterpillar, a massive builder of machinery and engines, was by far the largest employer. But it has since closed shop in Aurora, which had a devastating impact on the community. Today the largest employer is Amazon. Like so many places, the digital revolution arrived suddenly in town and it has caused a seismic shift in how the city defines itself and its future.

Turning the entire city into an innovation district is a foundation for a much larger, multi-year revitalization and economic development effort called Smart Aurora. Pending final city council approval, the city will secure $300 million of capital from the investment firm Smart City Capital. The money will be invested in the community to focus on increased prosperity, better run city services, expanded Internet connectivity, more youth programs and improved emergency management and public safety. Smart Aurora is a public-private partnership that includes Smart City Capital, Jacobs, Nokia, Bureau Gravity, OnLight Aurora and others.

The project aims to make the most of Aurora’s assets, which include 120 miles of Internet fiber (with plans for an additional 645 miles that will pass every one of the city’s more than 64,000 homes), many undeveloped downtown properties, incubators and good schools. The city’s size makes it easier for the local government to be agile and flexible.

For this CIO, it’s about purpose

Pegues, a U.S. Army veteran, is driving the innovation district model for Aurora in part because it’s his home. While he spent 19 years away on various U.S. Department of Defense and IT jobs, returning to Aurora meant coming home and giving back to the community that gave him a great start in life. He could have made many other choices, including remaining with investment bank Morgan Stanley where he was making more money and was happy. But an invitation from Mayor Richard C. Irvin to make Aurora a regional technology leader was all he needed to take a pay cut and begin a new journey.

Pegues did lay down some conditions. He told Irvin that if he was to be successful in improving areas such as public safety, education, economic development and government efficiency, he would need to cut through all the existing layers of government bureaucracy and receive the full support of the council. Irwin and the council have followed through on their promise to back him.

As CIO, Pegues has championed turning the entire city into an innovation district and has been responsible for articulating various aspects of the strategy. He’s also identified and convinced a wide range of partners to join the effort, including telecom giant Nokia and engineering firm Jacobs. The city has already begun rolling out its first street-level innovations, such as digital signage and the expansion of the fiber network.

Part of Pegues’s purpose-driven mission in Aurora is to build an environment with options he didn’t have as a young person in the community. In particular, he’s focused on helping Aurora’s youth get access to technology and job opportunities. Pegues also sees the innovation platform as a way to inspire interest in STEAM subjects—science, technology, engineering, arts and mathematics.

Pegues gets his inspiration from many sources including smart city colleagues such as Bob Bennett, the former chief innovation officer of Kansas City, Missouri. But he points to his six years working in Hungary, which had to reinvent itself after the fall of the Berlin Wall, as a major source of inspiration. Estonia, a model for digital government that is admired the world over for its emphasis on efficiency, digitalization and agility, has also been a guide.  

Tracking success

How will Aurora measure its progress towards achieving its goals? Like most cities, it collects and reports on standard performance metrics—things like number of citizens connected to fast broadband internet and reductions in crime from smart technology.

In January 2021, Pegues plans to launch a cross-departmental exercise to establish a data governance framework and identify the most relevant key performance indicators to track. But he also thinks more intangible metrics matter, such as success in educating the community and getting people to the table to talk in a common language about a shared vision for the future.

Creating new jobs in promising sectors is an important goal, too. Pegues points to a number of new enterprises that have moved into the city as a direct result of the innovation district work. These have included a data science company, a fiber optic manufacturer, and a smart infrastructure builder.

Model in the making

Assuming its leaders make the right decisions over the next few years, Aurora will be seen as a smart city model for mid-sized cities across the United States.

Pegues believes that the public-private partnerships he has created are going to be central to its success. Referring to the partners in the model and their relationships to the city, he told me, “It’s a hub and spoke model and they’re all interconnected.” These relationships could help kick start a process that is often too slow in many cities. “In the public sector, typically things don’t move unless there’s a crisis,” Pegues said. “Then [people] react. It’s not a proactive environment.” He points to Covid-19 as an example of a crisis that has radically moved the needle in recent months.

To succeed, smart cities also need CIOs who are true business partners rather than just IT heads. At the beginning of his tenure, Pegues says he advised Irvin: “We don’t need a CTO; we need a CIO. We’re not building technology; we need to focus on the business acumen of IT.”

He says his role now is to work with stakeholders inside and outside city hall to ensure that there’s a clear alignment of goals and that technology is being used appropriately to advance the community’s vision.

If Pegues has any regret, it’s that he wishes he’d started educating city leaders and the community faster about the scale of the effort needed to achieve its goals. But if Aurora can transform itself into a sparkling digital model that other U.S. cities seek to emulate, the extra time it’s taken will have been very well spent.

(First published in Forbes, Sept 29, 2020)