Bridging GovTech Innovation

1. Defining GovTech: A European versus an American Perspective

While both the US and Europe aim to leverage GovTech to enhance public services through innovation, their approaches reflect different strategies shaped by their respective governance models and market environments. 

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In Europe, GovTech is defined as an integrated ecosystem of startups, scaleups, and digital SMEs that use data and new technologies to modernize public service delivery. This ecosystem approach emphasizes collaboration and co-creation between public institutions and private entities, encouraging a broader supplier base for public sector innovation. The impact extends beyond just service delivery; it also fosters digital skills development, drives economic growth, and promotes a more agile and efficient public sector.

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In the US, GovTech is similarly focused on fostering innovation in the public sector and generally is more often framed around the “vendor” community and the relationship of selling products and services to a government, with startups acting as solution providers to government agencies. GovTech also primarily emphasizes emerging technology and innovation trends, has cultivated a culture for funders and technology firms to invest in startups and collaborate, and convenes around events and conferences that are chartering a future of government innovation. One primary emphasis of GovTech in the US has been around challenge-based procurement initiatives that can allow for flexibility and rapid problem-solving by harnessing the expertise of startups and tech companies to address specific public sector issues. Here, the emphasis is on creating agile partnerships where startups are engaged directly to provide innovative, ready-to-implement solutions. This method can enable quick deployment, iterative development, and scalable outcomes while driving technological innovation within the government.

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Europe's model, with its focus on integrating innovation into public service delivery, fosters a more systemic and sustainable modernization. On the other hand, the US model's speed and flexibility empower governments to swiftly tackle specific challenges and scale successful solutions. Together, these differing yet complementary approaches demonstrate the diverse strategies that governments across both continents use to harness GovTech's potential and drive forward public sector innovation in unique and impactful ways.

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GovTech is not confined to digital apps, data lakes, or AI. These are merely tools that can enhance the delivery of government services. GovTech is a global movement, not a consultant-created buzzword, aimed at leveraging technology and data solutions to improve service delivery across all government levels. 

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We can debate the exact words, definitions, and examples of technology that can have merit, but regardless, let's focus on what all of this is trying to accomplish. Better government services, better delivery of those services, and better experiences for the public when they access government services. What matters is the resident, citizen, customer, or however you choose to identify your audience. This focus can unify how we can collectively continue to grow and scale GovTech across Europe and the US.

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2. Challenge-Based Collaboration: Shared Goals, Different Approaches

On the one hand, European GovTech programs are typically designed to minimize risk while maximizing learning and impact, so the approach is built around facilitated challenge programs and phased procurement models. The model generally involves early stage startups that already have market-ready products, thus focusing on proven solutions rather than prototyping. Projects often start with smaller contracts—around €15,000—awarded for pilot projects that run for about six months; these aid the market entry process for B2G startups. Then, the initial phase allows both the government and the startup to gather insights on the problem and potential solutions. After completion, successful pilots can then lead to larger opportunities through regular public tenders. Public officials reach this stage with a better understanding of the problem, new use cases on the implementation of new technologies in the public sector, as well as of the needs of the startup. Notable examples of such are GovTechlab Madrid (Madrid, Spain) and GovTechH (Hamburg, Germany).

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To scale successful pilots into more substantial projects, Europe is exploring innovative procurement instruments. One such approach is the Design Contest, which allows for more substantial funding and longer-term engagements than traditional tenders. Winners can secure significant contracts that support the development and implementation of their solutions, typically ranging from €50,000 to €500,000 or more, depending on the complexity and scale. In a recent move, the Catalonian Government launched a program, GovTech Catalunya, using this approach, demonstrating a commitment to exploring diverse procurement strategies that can better accommodate the dynamic nature of startups and their solutions. The initiative provides up to €1 million in funding for selected GovTech projects to develop scalable, innovative public sector solutions. This initiative aims to validate new procurement methods that are both innovative and transparent, better accommodating the agile nature of startups. The European Commission’s GovTech for All, GovTech Startup Challenge is pioneering the GovTech open innovation process at a cross border European level, testing open innovation and procurement methods to find and scale digital solutions for energy efficiency in European municipalities. It is designed to foster a cohesive GovTech ecosystem across multiple countries. Funded by the Digital Europe Programme, it unites 26 organizations (soon to be 29) from 18 countries (soon to be 20) to innovate and improve public sector technology. The Design Contest is being tested in 6 European municipalities, setting precedent to inspire other institutions.

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On the other hand, the US has taken a leading role in integrating technology ecosystems, including startups, academia, and venture capital-backed incubators, into GovTech. This approach, similar to the efforts seen in Europe, has shown the potential for connecting startups with government needs and driving public sector innovation. A notable recent example is the Business Integrity Challenge by the Washington State Department of Social and Health Services, which aims to improve benefits access and reduce fraud through innovative, human-centered solutions. Launched in August 2024, this initiative allocated $1 million across four solution areas, inviting this technology ecosystem to submit adaptive and culturally appropriate proposals that leverage technology, including Generative AI, to serve Washingtonians better. Another example is the Technology Innovation Challenge launched by Los Angeles County. The initiative awarded $1.375M to innovative solutions to build a stronger homeless services delivery system in LA County, which shows a financial commitment while also allowing for testing solutions that work well before scaling. This challenge-based approach provides financial incentives and creates opportunities for sustained engagement and impact, echoing the European methods. Other examples include the Washington, DC-based nonprofit CivStart, which is also driving government innovation through Open Challenges that emphasize a problem-focused way for local governments to find vendor solutions, which are, on many occasions, startups. These types of issue-based or need-based challenges and pitch events continue to grow in popularity across US cities, given their emphasis on what a government is requesting. First, they create new procurement options and have the vendor community design and build solutions that directly address what is needed to improve the delivery of services for residents. 

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It must be noted that while the GovTech approach is predominant in Europe, the GovTech and CivicTech spaces coexist in the US. Each has its own distinct culture and priorities for digital transformation initiatives across government, and both ultimately emphasize improving service delivery for residents. For over a decade, substantial investment in US innovation initiatives has highlighted the importance of establishing structures and dedicated offices within government agencies as catalysts for innovative procurement practices and challenges. By embedding innovation teams directly within agencies, they engage with staff to co-develop solutions, utilizing agile methodologies and iterative prototyping. In addition, procurement options are designed to support the needs of departments and agencies better and reflect the timing needed to procure solutions from 18-24 months to sometimes less than six months. This approach encourages rapid experimentation and scaling of successful solutions across departments and fosters a culture of innovation and openness to collaboration with startups and tech innovators. 

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3. Facilitating GovTech Collaboration: From Continental, to Global.

As we compare the GovTech landscapes in Europe and the US, what is clear is the importance of emphasizing culture change and encouraging government leaders to think differently and embrace new approaches. It involves promoting innovative thinking and supporting these leaders so the perceived risks are minimized and the potential impact is clearly demonstrated. This mindset shift requires leaders who see the value in innovation and are willing to take the initiative. Cultivating such a culture involves understanding the practical steps needed to start—identifying quick wins, building internal champions, and creating an environment that encourages experimentation and learning from both successes and setbacks. 

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Both regions share challenges, such as the need for strong political buy-in and the complexity of creating environments that facilitate collaboration between government and tech startups. However, they also share what they have learned, including the importance of facilitation and a holistic, 360-degree approach to designing these programs. 

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As the GovTech landscape evolves in both regions, it's crucial to consider the potential impact of collaboration. Incorporating the strengths of both approaches, such as the US's emphasis rapid iteration, cross-sector partnerships, and embedding innovation within government culture; and Europe's procurement mechanisms and phased approaches to manage risk and ensure transparency, while aiming to consolidate a “single market” GovTech space that can enable cross-border scaling. This could lead to more effective GovTech global partnerships, and cross-pollination of ideas could pave the way for more refined and impactful approaches to public sector innovation globally.

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We want to facilitate ways for US and European governments to exchange knowledge and experiences, fostering a global conversation instead of a "continental" one. We hope for more future transatlantic collaboration, making the most of these mutually beneficial approaches. If you're leading a government-startup collaboration initiative in the US and/or Europe and would like to exchange reflections and experiences, feel free to reach out via niles@starinsights.com or sofia@gobe.studio.

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Niles Friedman, Government Innovation Leader and Executive Advisor, Star InsightsNiles, over the last 15 years, has emphasized public sector innovation, technology strategy, and digital transformation across the U.S. federal government, the State of California, the State of Washington, Los Angeles County, numerous cities, and international health ministries. He specializes in creating and growing businesses, divisions, and core functions within organizations. Through his work with C-suite executives, startup founders, public-sector administrators, boards, and nonprofit leaders, he's developed an adaptable approach to strategically collaborating across sectors, industries, and geographies. Niles serves on multiple boards prioritizing GovTech, public health, accelerating startups, and STEM career advancement.

‍Sofía Silva, GovTech Expert & Project Manager, Gobe StudioSofia is a Project Manager at Gobe Studio and GovTech expert, working to modernize public sector institutions by connecting governments with startups to deliver improved digital services. She has been involved in the delivery of pioneer GovTech projects internationally, including the first European Commission's Pan-European GovTech Bootcamp, Spain’s implementation of their first GovTech Lab and the US Department of State Tech4Democracy Challenge. She is recognized as a LATAM GovTech Leader and advises, mentors, and teaches public sector entrepreneurship, contributing to international GovTech projects and publications.