But, don’t governments already use technology? Of course they do. What GovTech aims for is a change in the way governments handle contracts, a break with tradition. The current trend is for large companies to develop technology customized for the government, with agencies contracting software that they then own, because they buy it and maintain it.

GovTech is a forum for innovation to bring new digital solutions a little more in line with the challenges that the government has. The aim is to promote access to governmental technology through a subscription – as with a music or TV streaming platform – rather than purchasing customized software.

In today’s trendy jargon, one might say that GovTech aims to shy away from BigTech and In-House Initiatives. What is sought is to change a way of thinking, one assuming that innovation depends solely on internal teams working for the government; the old adage of “I’m going to make my bed and then I’m going to lie in it” (in-house initiatives). We should also be careful and not expect a large technology company to come along with the perfect solution that will fix all our problems (BigTech). What we should realize is that we must open the door and look outside… we must see how governmental agencies can change their models when providing services in order to be more efficient (GovTech).

To achieve governmental efficiency, the idea of governance through a platform must be considered… and it’s precisely here that proprietary logic doesn’t fit very well. What do we mean by governance through a platform? Well, think of it like a government that buys its technology at Ikea and then rents out its services… not one that makes its own customized furniture the old-fashioned way (technologically speaking, of course). We’re talking about redesigning our services and standardizing them as much as possible in order to integrate capabilities and products that start-ups offer the market.

BARRIERS

Our world is increasingly digital, but many of the innovative solutions on the market don’t ever make it to the government. There’s a lot of innovation (too much, even) that never reaches the different governmental agencies: digital start-ups, scale-ups, and SMBs that are having an impact on the digitalization process don’t really do a lot of work in the public sphere.

In this context, the new GovTech ecosystems emerge as a way to bring the government new solutions by new, small entities that are not usually aimed at the public sector. The potential impact of these types of companies and solutions on citizens’ daily lives is clear, but so are the barriers they face:

• Public procurement processes are carried out in such a way that they place the bids of innovative, agile, and young companies at a disadvantage, making them less able to compete and excluding them from the system. This favors established entities that tend to provide more conventional solutions.
• There is a sizeable gap between governments and innovation. This affects the demand for future innovation from governments, whose technological requirements are based on the solutions available from companies they already know, making the market less diverse and competitive. Thus, governments tend to always buy the same thing, like a child who always asks for his favorite muffin, without realizing that there’s a whole universe full of treats available.
• The knowledge that innovative companies have about the public procurement market is minimal, and this is one of the main barriers involved when they try to land public clients.

A LITTLE INNOVATION, PLEASE

The government is used to looking for solutions rather than seriously considering its problems. When we have a headache, we tend to ask for paracetamol, and the usual companies offer it to us in the usual form. With the GovTech program, however, what is proposed is to simply go to the market and say: “I have a headache.” Then, the different players on the market will offer you different solutions that they believe may solve your problem: a thermal cap, a damp cloth, paracetamol, ibuprofen, homoeopathy, a massage…. You can then try any of these solutions to see if they work or not. And, if one does, you can buy it knowing that your problem is going to be solved.

BISCAY AND GOVTECH

The Government of Biscay began to place its trust in GovTech in 2019, testing its open innovation methodology on a project involving emergency services (firefighters), with a series of training sessions for management teams to become familiar with it. In the end, the Biscay GovTech project was launched in 2022 (financed by the European Regional Development Fund) with a view to creating an ecosystem that would seek digital solutions to the great challenges the Government of Biscay is facing. It has 5 main components:

1. Laboratory

   Open innovation processes are developed in the laboratory, identifying challenges. The methodology used consists of five phases:

   • The identification of challenges.
   • Reaching out to the innovation community.
   • Knowledge exchange.
   • Pilot projects and experimentation.
   • The dissemination and scaling of solutions that work.

   The first phase aims to define “good problems.” The key is to develop a clear and concise challenge with enough information to get the point across, inspire good solutions, and attract new types of providers.

   They are seeking an array of solutions, including some that could even be considered a bit daring for the government. Considering all the possible technological solutions, they want to find the one that allows them to provide better service and, therefore, more value for citizens.

   When a solution is of interest to a public agency, the pilot process begins. In pilot tests, not only is the degree to which the solution works technologically measured, but many other related parameters are assessed as well: its impact on the way people work, on the trust generated in the population of users, the sustainability of the process, etc. The pilot program gives them evidence, enabling them to establish clear requirements in future public procurement processes and/or internal technological developments.

   To scale the innovation once it has been tested and evaluated, two things are worked on. Firstly, the service’s redesign is thought about, so as to integrate the idea proposed and the value of the solution piloted. Secondly, contracting processes are promoted whose designs open up competition to innovative, technological and specialized companies.

2. GovTech Hub

   A series of activities are undertaken to bring the local and international innovative ecosystems together:

   • The establishment of boot camps and mentoring to assist start-ups and scale-ups on the “public market.” We’re talking about business strategies, sales cycles, public procurement, and collaborative initiatives with large companies in bigger tender processes.
   • The organization of pitch events (presentations for potential investors to consider doing business) focused on the public sector, and meetings with universities, investors, and corporations.
   • The development of events to raise awareness of the Biscay GovTech initiative.
   • The development of content, a website, and social network profiles.

3. GovTech Training

   Training complements practical experience in the laboratory in order to strengthen the knowledge and new methodologies used in the open innovation process. Governmental employees are trained so that they understand how this new use of start-ups works, and start-ups are also trained so that they understand the ins and outs of working in the public sphere.

4. Contractual innovation

   A new concept of entrepreneurial contracting is being developed to promote the growth and scaling of solutions with great value for the public sphere. Several things are being explored:

   • How to pilot digital solutions by innovative and emerging companies tailored to and in accordance with the limits set for minor contracts.
   • How to ensure that the Government of Biscay’s tender processes are open to innovative and emerging companies.
   • How to promote collaboration between small and large companies when a large contract is at stake.
   • How to create framework agreements or dynamic purchasing systems to facilitate purchasing from these new suppliers.

   If the Government of Biscay’s is able to contract subscriptions, just like we do on online music platforms (without gathering dust on CDs), the entire procurement process will be more efficient.

5. GovTech investment

   The first GovTech fund in Europe will be created as part of the Government of Biscay’s investment policy, with the help of Seed Capital, a governmental investment agency that brings together different seed capital funds, impact investment funds, and funds of funds.

   Investment in GovTech companies is known as “patient capital,” since the returns are not immediate. If theGovernment of Biscay invests in start-ups, this can encourage other private or public investors to also invest in these same companies, which will get them off the ground much better.

   In short, the Biscay GovTech project aims to coordinate the public and private sectors to achieve things that they would never be able to on their own with the governmental approach of a standard platform, redesigning services to integrate innovative solutions into governmental organization.