GovTech and other innovations in public procurement

The Digital Single Market and the digitalisation of the public sector - GovTech and other innovations in public procurement

Published on: 25/07/2022
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Study

GovTech and other innovations in public procurement

This research paper provides insight into GovTech and innovation in the context of public procurement. It examines the possibilities for developing an EU GovTech Platform with the aim of supporting the modernisation of the public sector; the further development of the European GovTech market; and engagement with citizens and businesses. This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Internal Market and Consumer Protection (IMCO).

The study discusses the concept of “GovTech”, the concept of innovation in public procurement, and the forthcoming European GovTech platform. The study identifies best practices, analyses risks and benefits of these concepts, and proposes recommendations particularly for government, small to medium-sized enterprises and citizens.


Background

GovTech is a term referring to (mostly) digital products developed to support the delivery of public services or the internal operations of public administrations. GovTech may be developed by the private sector but may also originate from citizen initiatives, non-profit organisations, or from the public sector itself. The growing GovTech market in the EU presents an opportunity to transform Member States’ public services and to support the development of the sector itself, particularly through the use of public procurement.

Key findings

Businesses within the GovTech ecosystem and public sectors seeking to use GovTech are faced with challenges to taking full advantage of the opportunity presented. These challenges relate in particular to procurement; legacy infrastructure; interoperability and standards; and skills required for implementation.


Various national and EU wide initiatives, and public private partnerships (see the example of Digicampus below) have been launched in order to support the development of the ecosystem, and are aimed at overcoming these challenges through pathfinders, co-creation, and shared lessons learned.


Public procurement offers opportunities to directly support innovation by using public sector demand to create and shape new markets and to support businesses that otherwise struggle to develop innovations. Using GovTech to promote changing relationships between client and supplier(s) creates opportunities for innovation and transformation of public services.
However, using public funds to support innovation presents risks that need to be addressed at political and bureaucratic levels, for example by sandboxing.


A range of approaches can be taken to support procurement of innovation, such as the design contest approach, but success requires skill in implementation and a strong understanding of the market and required outcomes.
An EU digital platform for GovTech could generate benefits for many stakeholders. If the platform is established on a "Government-as-a-Platform" basis, it will be important to understand how building blocks support public sector transformation and citizen engagement.
Risks and challenges include that the platform may lead to a reduced incentive for public administrations to develop in-house solutions. The platform may lead to unfair and/or inefficient competition between SMEs and large companies.

Digicampus Recommendations

GovTech is a recent concept and a novel EU policy field. At present, governing organisations are not adapted to the characteristics of GovTech. There is an opportunity to address the institutional void identified in the study, either through widening the responsibilities of an existing body or establishing a new one.


Governments experimenting with GovTech should consider risk of failure and invest in redundancy, as well as ensure a well-developed preparatory phase. There is much to be learned from collaboration and sharing lessons. Access to skilled procurement and ICT professionals is essential.


Current procurement processes need revision to meet the characteristics of GovTech. Approaches such as civic hackathons, incubation, acceleration labs, pre-commercial procurement solutions and design contests can help.


The proposed EU GovTech platform should be driven by user requirements. It should navigate challenges regarding public platformisation carefully, in particular with regards to risks of market dominance and anticompetitive behaviour. It should also ensure that processes, specifications and requirements are made as simple as possible. Finally, the proposed EU GovTech platform should engage a diverse population of citizens and businesses to gain their feedback.

Authors

Marissa HOEKSTRA, Cass CHIDEOCK, Gabriela BODEA, Annelieke VAN DEN BERG, Anne Fleur VAN VEENSTRA, TNO

Nitesh BHAROSA, TU Delft

Jonathan CAVE, GNKS Consult

Ben KOKKELER, Technopolis

Ivette OOMENS, Technopolis
 

Frank ALLEWELDT (second reader), Civic Consulting