On 16 December 2021, the European Commission organised a first GovTech* workshop. This theme together with the acceleration due to the pandemic situation which forced governments to be able able to innovate rapidly but also the need for digital strategic autonomy have supported to idea in many countries to support the GovTech ecosystem.
*Among the many definitions, we consider that GovTech corresponds to when the public sector engages with start-ups and SMEs, for the provision of tech-based products and services in order to innovate and improve public services.
In her introduction, Natalia Aristimuño, director for Digital Services, explained the importance of Interoperability in the design of any Public Service including in innovation. One way is to foster innovation is to involve the startups, hence the importance of developing the GovTech the importance of support to the GovTech Ecosystem. With the formal adoption of the Digital Europe Programme for the years 2022-2023 we can start informing stakeholders about the initiative in order to prepare the call opening early 2022.
Although the GovTech, is a challenging project, the objective is that this cooperation framework will inspire other initiatives local and national level to amplify this action with for example the Recovery and Resilience Facility. Thanks to RRF funding, Member States will invest some 43 BEUR in the further digital transformation of their public services. This represents close to 40 % of the total RRF allocation for digital. There is an unique opportunity.
She finished her intervention by presenting the agenda and wished the participants a fruitful discussion.
Peter Ulrich from the Joint Research Center, Digital Economy Unit, Ines Mergel Professor in University of Konstanz, and Maciej Kuziemski, independant expert presented the main findings of two studies soon to be published: a study Scoping GovTech dynamics in the EU and a another one on GovTech Practices in the EU. Peter Ulrich explained the background of the studies based on interviews of startups, government officials among , review of academic and grey literature and a number of workshops. Ines Mergel then presented the main findings, first defining the GovTech definition and explained the dynamic market development of the GovTech sector exposing the challenges faced by the different actors. In particular, procurement which on the buyers side remains highly regulated, but sometimes in lock-in situations. On the startup side, they are facing entry barriers but also the challenges caused venture investments expectations. An EU GovTech Incubator could help to complement existing instruments by proposing new forms of public procurement of technological innovations but also helping administrations to learn on how to innovate procurement routines of Government. She then described different forms of GovTech procurement:
- Catalytic: a procurement agency serves as catalyst, coordinator and technical resource, acting as a buyer and procure on behalf of other actors,
- Pre-Comercial-Procurement: Procurement of (expected) research results, not to purchase a final product but contributes to the development of a non-existing product.
- Adaptative: Product or system procured is incremental and new only to the country (or region) of procurement in order to adapt it to the national or local context.
- Developmental: Creations of products completely new-to-the-world products and/or systems are created. It concerns the most radical innovations.
Maciej Kuziemski then presented the GovTech best practices. From the set-up of the programme at the centre of the government, part of an agency or almost independent such as a foundation and describing the different activities undertaken by these initiatives: such as Challenges and prizes, hackhathon, accelerations programs; piloting and R&D grants or Ecosystem building.Based on the interviews a number of lessons could drawn from these initiatives to be successful.
- Proximity to executive power: close relation to the executive power and having legitimacy from direct political mandates help to overcome the national bureaucracies.
- Variety of models: There is no one size fits all formula for creating a successful GovTech program.They can focus on improvements of innovation creation, some on mission support, others are interested in market creation, and others are only interested in the use of the results.
- Lean teams: a lot of programs started and stayed fairly small. Some argue that limited size of the team allows them to stay agile and foster a start-up work environment.
- Persitent individuals: persistent individuals and policy entrepreneurs are usually a success factor. Either coming from similar programs internationally or worked in the private sector and attempted to help the public sector adapt some of its best practices, these change makers prove to be essential.
- Public value: Although many GovTech programs focus on efficiency related values to make the public sector more innovative, and results-oriented, there is an emerging trend that currently re-focuses some of the efforts towards wider public value, such as sustainability, circular economy, citizen centricity, public health, and education. Focussing on wider public value can help increase buy-in from a larger group of stakeholders.
- Right funding at the right stage: With the wide availability of private sector funds, one of the most important bottleneck is not about the lack of available funding in general, but making sure that public sector resources are dispersed at the right stage (e.g. wherever private sector resources lack). This may mean providing easily accessible, non-dilutable funding and grants at the early stages, being the first buyer for emerging companies, and allowing to experiment in a controlled environment (e.g., sandboxes).
Georges Lobo from DG Informatics,Interoperability Unit presented the GovTech Incubator initiative taking place in the context of the European Digital Government EcoSystem (EDGES) stemming from the Digital Europe Programme. The EDGES sub-programme aims at supporting the Digital Transformation of Public Administration and is supporting former CEF Building Blocks and ISA² activities.
The GovTech Incubator is an multi-country innovation and experimentation initiative. The high-level objectives are to foster new digital public services leveraging emerging technologies such as IA but designed and elaborated through piloting activities involving sub-set of countries. This collaborative framework would allow the development of solutions interoperable by defaults. The participation of startups is encouraged. In this manner this activity will support, the digital strategic autonomy of the EU, have better services, foster the cross-border collaboration and exchange of best practices.
The collaboration framework proposed is a Framework Partnership Agreement (FPA), signed between a Consortium and the Commission, initially for 4 years but extendable to the duration of the programme. The FPA does not include funding but must have a action plan covering the duration of the agreement. Funding will come from the signature of the Specific Grant Agreements (SGA) which will contain. For the first work programme 2021-2022, the Commission has indicated that the funding should of 2-4 pilots to be done in the 2 first 2 years.
The Commission is expecting the selected consoriutm t be composed mostly from GovTech or similar initiatives preferably at National level, but also any partners eligible in the Digital Europe Programme can take part. Startups and SMEs are expected to participate indirectly, either via procurement via one or more partners or via financial support to third parties.
On the timing, the call will open on 22 February 2022 and will close on the 14 May 2022. Signature of the FPA is expected to happen in autumn 2022.
Goran Zekovic DG CONNECT, Unit eGovernment and Trust presented a future procurement action focusing on GovTech stemming from Pilot Project proposed by the European Parliament called Fostering digitisation of public sector and green transition in Europe through the use of an innovative European GovTech platform
The purpose of this procurement is to Introduce the European public sector to the GovTech ecosystem with a view to supporting public administrations in adopting cost-effective and flexible digital solutions This will be a public procurement for a value of 1.5 MEUR , expected to start on Q3 2022 with a duration of 24 months.
The objective of the project is to help to develop the GovTech Market, the creation of a hub for GovTech to collaborate, exchange ideas, to enhace interoperability and cross-border cooperation, support co-creation with citizens and will complement the work done by the GovTech Incubator
The activities foreseen are :
- Top-Down activities
- Engage with public administration in a foresight exercise to promote the alignment of their strategies and implementation roadmaps of digital solutions.
- Use of scenario building approach to reveal the dynamics of a fast-evolving ecosystem.
- Analysis will support efforts to use digital solutions in public administration for the fight against climate change and promoting the digital transition.
- Bottom-up activities
- Engage with GovTech ecosystem to harvest ideas that help public administrations in adopting digital solutions.
- Support the development or use of one common platform to gather challenges
- Direct research with Citizens
- use innovative service design methods to include the views of citizens in the above streams of work.
- unveil how citizens perceive the new opportunities offered by digital solutions in streamlining communication between administrations and citizens.
Pedro Canto e Castro from the European Innovation Council and SMEs Executive Agency presented a brief overview of the action of the European Innovation Council towards the innovators and startups. After presenting the main missions of the EIC as innovator-centric leadership and an pro-active approachwith a budget of 10 billions Euros;, he presented the opportunities offered by the EIC Accelerator for startups and SMEs:
- Individual companies: startups, SMEs, in exceptional cases small mid caps (up to 500 employees)
- Continuously open for applications (also from individuals intending to start a company and investors intend to support a company)
- Mainly open (“bottom up”) but also Accelerator challenges (e.g. Green Deal, Strategic Technologies)
- Mainly blended finance (grant + investment), but options for “grant only” and “grant first” (with investment follow up)
- Funding up to €17.5m (Grants up to €2.5 million; equity €0.5-15m)
The investment strategy of the EIC fund is to:
- provide patient capital in the form of equity or quasi-equity.
- invest at early stage (seed, start-up, scale-up) from €0.5 to 15 million.
- target usually minority ownership stakes (from 10 to 25%), but up to a blocking minority in cases of strategic interest for the EU.
- with investments will normally be made with a long average perspective (7-10 years) with a maximum of 15 years.
The EIC accelerator also offers access to advices (Coaching, Mentoring, Expertise & TrainingSpecific etc., Access to business partners: Corporates, Investors, Procurers, etc, Access to innovation ecosystem & peers: EIT, EEN, Incubators, Accelerators, Agencies, IPR Helpdesk, Overseas Trade Fairs.
During its pilot phase, the EIC Accelerator has supported 768 companies of which 137 EIC fund investments (~€600m). 3 startups became Unicorns and 91 became Centaurs.
Georges Lobo presented briefly a funded opportunity for public sector under Horizon Europe in the form of a Pre-Commercial Procurement (PCP) on Boosting green economic recovery and open strategic autonomy in Strategic Digital Technologies.
This is a call for one project with a project of 9 MEuros with a submission deadline set on 30 march 2022. The link to the full topic description and submission details on funding & tenders portal is here