Since the public sector’s role has significantly expanded and technology can support delivery of their services in a more efficient and cost-effective way, there is an opportunity to develop customer-centric services more rapidly. This is where GovTech comes into play.
Disruptive Innovation is turning every industry on its head. New and emerging technologies change the way companies design, produce and deliver services and products to their customers. In the past decade, the public sector started to understand that these technologies can also assist local and central governments in creating better services, improving engagement with citizens and increasing transparency.
The main goal of all GovTech programs is to foster innovation, provide opportunities for their community and improve performance in the public sector. Governments initiate such programs for three strategic reasons –
~ to educate and up-skill staff,
~ to discover innovative solutions, and
~ to foster local GovTech ecosystems.
The majority of GovTech programs are based on challenges.
Instead of describing the desired solution that these organizations need, they focus on explaining the problem. Their task is to describe their challenge only and then get to learn about potential solutions that they may not think about themselves. This process makes it possible to learn the market’s cutting-edge technologies and discover various approaches to the formerly specified needs. The challenge approach allows local and central governments to get access to top-notch solutions and innovative concepts without having to know them upfront.
Three typical goals of GovTech programs
1. Educational Programs for Public Sector Employees
The main goal of these programs is to educate public sector employees and build innovative capacities within the sector. They aim to familiarize government employees with the potential of innovation, enabling them to experience the implementation of new technology as a part of their training. Such programs equip participants with relevant knowledge and tools in order to promote internal and open innovation processes. In many cases, these programs create a network of innovation champions in the public sector, enhancing cooperation and knowledge sharing between different functions within the government.
2. Sponsor Innovative Locally-based Technology
GovTech programs aim to create an effective and efficient process to implement technologies that solve public sector challenges. These processes are quick and well-structured, including interactions with multidisciplinary partners with added value to the process. The programs serve as a lab for testing new methods of technology implementation and procurements.
3. Stimulate Economy and Foster Growth
Supporting new technology-based sectors by strategically investing capital, drafting policies and providing resources to foster specific innovation ecosystems is neither unique to GovTech nor new to many governments. The peculiarity of GovTech, however, lies in the fact that the government – in the case of GovTech programs – does not act as an outside facilitator but as an active stakeholder and customer of this ecosystem. By establishing GovTech programs, governments signal to their innovation ecosystems that there is a genuine interest in GovTech startups and a will to implement innovative solutions. Programs that specifically focus on fostering growth of GovTech startups acknowledge and utilize this unique double role of governments in GovTech.
GovTech programs are typically structured in the following way
Stage 1: Challenge Creation – the process of finding and defining challenges;
Stage 2: Application – finding the right partners from the private and public sectors;
Stage 3: Innovation – the period of collaboration between technology providers (startups) and the government to create, adjust or adapt the solution;
Stage 4: Implementation – piloting the selected solution.
Most programs share this basic 4-stage structure.
The first stage typically includes the definition and scope of the challenges selected for the program. In the next stage, companies and startups are invited to apply and showcase solutions that may solve the presented challenges. After that, in the third stage, stakeholders from the public and private sectors get the opportunity to interact with each other in order to understand, adjust and improve the submitted solutions. GovTech programs vary at this stage based on various collaboration strategies between these stakeholders. In the fourth and final stage, efforts are made to implement and test the developed solution. The design, goals and content of these four stages determine whether the programs lead to actual pilot implementation or remain educational or theoretical in nature.
Finding and Defining Challenges
GovTech programs generally start with a challenge creation process. This is a crucial aspect of many successful open innovation activities but may be especially relevant for those programs that try to change the way innovation is implemented in more traditional contexts, such as local and central governments.
In the challenge-based programs, challenges are first mapped and then presented to external innovators who are tasked to solve these using innovative technologies and approaches. Instead of seeking a technology that will do X, challenge owners are encouraged to ask “how can we solve the problem of Y”?
This dramatically different approach has a great influence on the final product. By asking for technologies that do X, that's what you get. The problem is that the public sector employees – or in fact any experts regardless of their domain – are not always able to define every feature of the optimum solution. After all, government employees are not (and should not be asked to become) technology experts. This approach limits the potential outcomes of the program and the learning capabilities of the stakeholders involved.
The challenge-based approach allows for an open and outcome-based dialogue between the private and public sectors. Instead of buying a solution, the design partnership is established to benefit both parties and explore the best solutions. The solution to a specific challenge might come from a totally different field or may not even exist. Publishing challenges instead of calling for solutions offers significantly more opportunities to improve the work of local and central governments. Challenge owners will be surprised to see how many different ways there are to solve their challenge.
GovTech programs set up and facilitated by an independent third party is the preferred model. This means that an independent organization, like SEVENmile Venture Lab, connects the public and private sectors and is in charge of setting up and managing the program. This organization should ideally be an NGO that sets up the GovTech program together with a governmental partner.
The biggest advantage of this model is that there is an independent party that can mediate between different innovation stakeholders. Such third parties are often experts in their field and have a network of external innovators. Also, third party facilitators have the relevant tools, connections, know-how and methodologies to design and run the program professionally.