I often get asked how running a government is different than running a business. Well, one big difference is that private sector private companies have to innovate -- or else they'll be put out of business by someone who can offer goods and services better, faster, and cheaper. Governments, however, are always in business. They have no real incentive to change they way they do things -- and often they don't.
But our administration has never been satisfied with the status quo. From the very beginning, we've pushed ourselves to look at old problems in new ways. One of the best examples is our Center for Economic Opportunity, which tests out new poverty-fighting strategies using public and privately-raised dollars. Over the past four years, the center has developed and field tested more than 40 new strategies. All of these initiatives have been rigorously evaluated for their effectiveness in reducing poverty, and many have shown some extremely promising results. So promising, in fact, that last week, the Obama Administration awarded New York City nearly $6 million in "social innovation" funds. Using those funds and more private dollars, we will now work with leaders in seven other urban areas to help them replicate five of our most successful poverty-fighting initiatives.
These innovation awards are a real tribute to the creative, cost-effective approach our administration has taken to solve some of our city's toughest problems. But our work is far from finished. Our city's economy took a major hit during the national recession. It's only been a few short weeks since we produced an on-time, balanced budget for this year, and already we are looking at an enormous $3.3 billion budget gap for next year.
Over the past few years, we've worked to do more with less -- and we've succeeded. Even after eight rounds of budget cuts, we continue to drive down crime, increase graduation rates, and keep our streets and parks clean. But the only way we're going to be able to keep this progress going in the years ahead is to further reduce the size and cost of government.
Last week, in partnership with the City Council, we unveiled the first stage of our plan to create a leaner, more efficient government for the 21st century. By consolidating some of our agencies' back-office functions, reducing the size of our office space and vehicle fleets, and using technology to better serve the public, we believe that we can save $500 million over four years while actually improving the quality of services we deliver. And by 2014, these efficiencies should generate an annual savings of $500 million.
This plan is just the first in a series of cost-cutting strategies we'll implement as we continue to examine all the possible areas where we can sustain -- or even improve -- public services through efficiencies. The result will be a government that is smaller, smarter, and fiscally sustainable. A government that innovates and puts the customer first. A government that isn't afraid to test out new ideas -- or shelve old ones that clearly don't work. And if we can continue doing all those things, we will leave New Yorkers a city that's even stronger than the one we have today.