In this series’ previous posts, we explored how the GovTech space brings non-traditional digital providers closer to public institutions. In this post we’ll dive into how open innovation enables the incorporation of innovative solutions from digital providers into the operations of local and national governments.
This strategy, known as open innovation, is an innovation management model based on collaboration with external agents. Since open innovation is a new approach in the continuing digital transformation of the public sector, understanding its particularities and the differences compared to its application in the private sector is crucial to ensuring its success.
The deep experience that GovTech labs, such as IE PublicTech Lab, has helped us to put together the five key steps that must be taken into account by cities that want to incorporate this methodology into their decision-making processes:
1. Challenge Identification
The first step is to analyze the problem. This isn’t common in the public sector, where the usual procedure begins with suggesting solutions, however, this different start to the process can be achieved by incorporating design methodologies. In this way, the open innovation method – differentiating causes and effects – the institution will be able to define the problems in a more appropriate way. To achieve this, cross-functional teams that would otherwise not be in contact due to the operational structure of the administration, are of special importance.
The participation of actors who are familiar with the context (officials who provide the service or users of that service, for example) is key to ensuring a good investigation and analysis of the problem. After conducting this in-depth analysis, a clear and concise challenge is articulated, with enough information to be able to communicate, inspire solutions, and attract other types of providers. To be able to develop a diverse set of solutions, it is essential to communicate all the information related to the challenge in an actionable and transparent way. Likewise, this will ensure that the private sector can understand the needs of the administration in its own language.
2. The Call for Proposals
Although not the norm, governments should take an active role in the search for new suppliers, approaching them directly. For the private sector to respond to this call for proposals, it is necessary to invest in the creation of an agile ecosystem that can identify the best solutions for the institution. A recommendation: the calls to the entrepreneurial and innovative ecosystem of the territory can use the networks of accelerators, incubators, technology centers, universities and investors as support.
This phase’s objective is to have a more diverse and competitive innovation proposal than usual. For example, in the LAC region, the Inter-American Development Bank, together with IDB Lab and IE PublicTech Lab launched a competition for GovTech startups – the Govtech Venture Day. The event and virtual competition aimed to make the region’s GovTech offerings visible and bring them closer to the cities of the IDB Cities Network. In this first edition, startups focused in data-driven decision making were the focus. The selected startups participated in a bootcamp and the finalists presented their proposals to the IDB Cities Network.
3. Knowledge Sharing
This phase is fundamental for the private sector company and the public sector institution to lay the foundations for their collaborative work. Given the differences in their operations, culture, and ways of working, it is advisable that both actors receive training on how to work together.
Two key things occur in this phase. Governments will be taught to work using agile methodologies, to make better use of data for piloting processes, to strengthen their relationship with the ecosystem, or to use their public procurement laws to source from digital startups and SMEs. On the other hand, innovation-focused private sector companies will be trained in the “public market”, on commercial strategies, sales cycles, public procurement, or collaborations with large companies in large tenders.
In addition, different spaces and dynamics will be created to bring together the two teams, such as semi-structured pitch meetings and rounds and interviews. This enables the institution to better acquaint itself with the solutions offered and the private sector companies to understand problem and its context at a deeper level.
4. Experimentation and Piloting
When one specific solution is of interest to the public institution, the pilot process begins. Pilots are the experimental application of a GovTech solution with the objective to understand the opportunities and impacts of using a certain technology in a given context and on a specific problem.
One of the aspects that distinguishes the GovTech open innovation process is that its pilots not only measure the technological performance of the solution, but also the many other impacts in the context of the specific public service: its impact on the way civil servants work, on the trust generated in the citizen-user, on the sustainability of the process, etc.
It is therefore important that the institution and the innovation-focused private sector companies jointly define the creation of a framework for evaluating the expected solution, the process for collecting evidence and learning, and the indicators for assessing the pilot. This information makes it possible to systematically evaluate the impacts of such a solution on a given public operation.
5. Dissemination and Scaling Up
Piloting a GovTech solution allows for the collection of evidence and data. Specifically, in GovTech open innovation, evidence and data is primarily used to inform future proposals or internal technology developments. In addition, it gives visibility to the company and its solution, which helps them in their commercial process with other institutions, as well as helping the institution’s experience and relationship in the entrepreneurial ecosystem.
With the implementation of this methodology, national, regional and local governments are clearly betting on their digital and cultural transformation, in order to improve citizen services and make their operational processes more efficient and transparent.
Is it feasible to implement such a methodology in Latin American and Caribbean cities?
Of course it is. Cities in the LAC region have already come up with interesting solutions using the open innovation methodology. Here are a few examples:
– The city of Abangares, in Guanacaste, Costa Rica, collaborated with Munidigital to conduct an exhaustive diagnosis of the city’s needs, which was fundamental in the establishment of new government strategies and an optimization of its resources.
– In the case of the city of Cordoba, Argentina, GovTech is already a reality. The Argentine city has been investing in its GovTech ecosystem for some time with the CORLab initiative, the pandemic has even accelerated its work in this field.
– At the national level, Chile’s is putting GovTech at the service of people’s needs, with the creation of the Digital Government division, which seeks to contribute to the creation of an efficient, inclusive and intelligent nation led by a government that incorporates digital technologies at all levels of management and public policies.
Do you know of similar initiatives aimed at reaching other types of technology suppliers or to open the market to other types of companies? Is there is interest in your city, or even success stories? We would love to hear about them and learn from them. We invite you to share them in the comments section.
Image credits: Geralt published in Pixabay