At the outset of the COVID-19 pandemic, many governments hosted Hackathons to develop innovative solutions that help fight the virus. For example, Germany’s “#WirvsVirus” attracted more than 20,000 participants, resulting in over 1,500 projects. 20 of these ideas are now being tested and receive further funding. This would have been inconceivable only a few months earlier in one of Europe’s least digital countries where citizens still need to physically go to their local authority and fill complicated documents manually. This, however, is about to change, thanks to a small, but rapidly growing industry: GovTech.

What is GovTech?

The term GovTech is not yet clearly defined. It broadly refers to creating a multi-stakeholder ecosystem that allows companies of all sizes to provide the public sector with digital technologies. In the broadest sense, "if you’re updating governmental websites – you’re doing GovTech".

While the lack of a clear definition is indicative of how new the industry is, it has silently grown quite considerably. Accenture estimates that €340bn (US$400bn) are spent on government technologies worldwide, with an increasing share dedicated to new technologies. European governments alone spend €22bn on GovTech, with projections forecasting a market size of at least €90bn.

Some pioneers, such as Poland and Singapore, have already set up GovTech labs to accelerate the digitalisation of their public sector. Countries like France even created start-up incubators in which public servants can bring their ideas to life. 

But the key driver is not the public sector. PUBLIC - a London-based GovTech incubator - has been at the forefront of the GovTech revolution. The company not only supports GovTech start-ups in Denmark, France, Germany, and the UK but also organises the annual GovTech summit which has attracted more than 1,000 people from over 90 countries. The event was previously hosted by French President Emmanuel Macron, and lists many senior government officials, such as Estonia’s President Kersti Kaljulaid, as keynote speakers.

GovTech is a win-win-win

Looking at these facts, the industry has a bright future. But what distinguishes GovTech from the modus operandi? Currently, governments spend vast sums on legacy management and largely depend on solutions from a small number of leading tech companies. This makes the public sector dependent on Big Tech and produces less innovative, higher-priced solutions that are not tailored to the needs of citizens. The status quo is a win-lose-lose situation which only benefits a small number of businesses. By embracing GovTech, legislators can turn the future into a win-win-win scenario: Better for government, better for businesses, and better for citizens.

GovTech will help to make the public sector operate more efficiently. For instance, one key obstacle of digitising public services and processes are silos that prevent authorities from collaborating and scaling up solutions across different agencies. Several GovTech start-ups have set out to assist governments in this endeavour. For example, Berlin-based Polyteia developed a platform for data analytics and visualisation that allows public servants to use and combine city and municipal data from multiple sources, thereby enhancing their decision-making and planning. Apolitical takes a different approach. The GovTech start-up developed a “social media” platform connecting policymakers and civil servants from more than 160 countries and helps them to share information, knowledge, and experiences.

Given its collaborative nature, GovTech also allows a wider range of entrepreneurs to compete in public tendering and gives smaller companies a seat at the table that is currently taken by Big Tech. But this requires a radical change in how governments perceive themselves. Rather than simply buying digital solutions from businesses, they must actively develop and adopt a Government-as-a-Platform model. That is, they have to amend the tendering processes, open a constant dialogue with academia, civil society, and the private sector, and tear down silos.

This collaborative, multi-stakeholder ecosystem will create a more competitive market, boost innovation, and produce citizen-centred digital solutions. For instance, Singapore’s GovTech Agency introduced so-called “dynamic contracts”, giving more companies the opportunity to participate in public procurement procedures, even if they missed the initial call for ideas. The country also transitioned from outsourcing to co-developing and is working directly with companies in trials to develop bespoke solutions rather than just seeking to buy them. If partners meet the key performance indicators, contracts are extended and businesses have the prospect of even running entire systems.

But GovTech is as much about efficiency and cost-cutting as it is about providing better service to citizens and, ultimately, improving democracy. This is perhaps the most important “win”. Adopting the concepts of design-thinking and consumer-centricity, GovTech will help governments to choose from user-friendly and citizen-centred solutions and create a space for collaboration, discussion, and civic engagement. The civic tech platform Civocracy, for instance, allows citizens, businesses, organisations, and governments to engage in conversations, crowdsource ideas, share statistics and analytics, and track policy impact in real-time. Civocracy thereby revives a sense of community through participation, collaboration, and transparency.8 Similarly, using solutions from the Belgium start-up Citizen Lab, the city of Hasselt actively included its citizens in a local project. The company has now helped more than 100 governments to engage with about 15,00 citizens.

As these examples show, GovTech is a win-win-win. It helps governments to create a more heterogeneous digital ecosystem, making it more efficient and empowering up-start businesses. But perhaps most importantly, it returns to the fundamental values of democracy: Creating a government by the people to improve government of the people so it can focus on government for the people.