The definition of GovTech often depends on who you ask. In one policy paper exploring the sector alone, the UK Government used five definitions. This reflects how rapidly the sector is emerging.

"The absence of an established definition is perhaps the best indicator of how new, broad, and rapidly-developing the field is. This is what I believe to be GovTech’s key quality – it escapes its original meaning of “technology for the public”, constructed like FinTech or MedTech. Instead it encompasses a much wider catalogue of actions aimed at making the public sector more innovative, agile, and development-oriented. If you’re updating governmental websites – you’re doing GovTech. If you support your colleague’s suggestion to eliminate redundancy – you’re supporting GovTech. All that matters is that the result of your action does something to make the government more technologically functional." - Justyna Orlowska

Apolitical members would define GovTech as technology that’s developed with governments at the forefront. This might be because innovators are designing technology with government alone in mind, or because they are thinking about how to use existing technologies in government.

"To put it simply, GovTech is about applying emerging technologies (such as artificial intelligence, advanced sensing, blockchain, advanced data processing, and so on) to improve the delivery of public services through increasing efficiency and lowering costs. The GovTech sector is estimated to be worth around $400bn globally." - Ben Leich

What’s the role of start-ups and other tech companies?

People often use the term ‘GovTech sector’ to refer to technology companies — particularly smaller or newer ones — that provide products and services to governments, and help to solve public sector problems.

These companies often focus on one specific problem. They’re less likely to work across a number of sectors, as an outsourcing arm, like some traditional contractors.

What does GovTech mean for government procurement?

In recent years, some governments have begun to see GovTech startups as more dynamic, and potentially safer, partners. Dynamism is important because of the growth of artificial intelligence (AI), the internet of things (IoT), and blockchain. Reliability is key following some well-known outsourcing failings, like the messy collapse of UK contractor Carillion.

Small technology companies have reshaped how the private sector does business through, for example, cloud computing. But the public sector remains largely untouched by this, some argue. One reason is that government procurement traditionally favours large incumbent providers, explains Edward Elliott, a programme manager at GovTech fund PUBLIC.

Lengthy and expensive public sector procurement processes can exclude small companies. Some are “not even trying” to compete for government contracts, says one Chilean entrepreneur.

So there is still a lot to be done around updating procurement frameworks and the overall culture around them in many parts of the world, argues Dr. Tanya Filer. She leads the Digital State programme at the Bennett Institute for Public Policy at the University of Cambridge. Filer suggests that policy-makers need to think about nurturing a GovTech ecosystem if they really want ideas, knowledge, products, and services to flow between innovative suppliers and governments.

Creating the conditions for innovation

Where governments, start-ups, and other parts of the technology industry do work together, there is evidence of a new digital ecosystem emerging.

"I believe the crucial thing when thinking about GovTech is to imagine it as a circular flow, where citizens develop solutions helping themselves (directly or indirectly) and the administration is in the middle, constructing a framework they can do it in." - Justyna Orlowska

The emergence of the GovTech sector made it obvious to some that the key to government innovation is through public-private partnerships. Skaidra Puodziunas, Senior Advisor at the Ontario Digital Service, points at GovTech Lab Lithuania to show how innovative work from the sector can be widely and inexpensively adopted.

In Latin America, GovTech has helped people realise that public value is created by a whole ecosystem of actors and their interactions. Carlos Santiso and Enrique Zapata at CAF, Development Bank of Latin America, point to how cities in the region are taking the lead in creating a local GovTech ecosystem. This is “where citizens interact directly with their governments”, they argue: improvements to effectiveness, efficiency and transparency in public services are easiest to realise here.

GovTech innovation does require patience, especially when it comes to financing. This is because many GovTech ventures sit at the applied end of the innovation lifecycle, Filer explains. In Israel, city governments joined up with national bodies to establish the Digital Innovation Fund for Public Sector Challenges. A patient government investor can then enable private investors to follow. The rigorousness of government contracting sets good reporting standards at GovTech companies, supporting due diligence. Those that sell to governments have reliable customers which makes them more desirable targets for investment.

Adequate and sustainable financial resources are essential, but another requirement for GovTech to flourish is the use of multidisciplinary teams that bring agility and flexibility to public problems. GovTech teams are made up of experts from a range of backgrounds including public policy, data analysis and visualisation, digital, strategic communication, and project management. The right financing and the right teams aren’t the whole story, argues Zapata. GovTech teams also need high-level political support, permissive regulation, and to be at the centre of government or their specific sector.

Will Covid-19 prove the business case for GovTech?

Many countries that seem to have most successfully handled the pandemic have made ample use of digital technologies to do so. Singapore in particular has attracted praise for an effective pandemic response and the GovTech strategy that made it possible. Kok Ping Soon, Chief Executive of GovTech Singapore, points to 20 years of learning since the 2003 SARS epidemic. But the pandemic has also validated other bets Singapore has made more recently — like building a nationwide fibre-optic infrastructure, nurturing a vibrant local technology ecosystem, and investing in technology expertise and tools within Government agencies.

Zapata agrees that Covid-19 could be proving the business case for GovTech. “Governments have faced the need to use technology as a tool to respond to the crisis as well as to maintain daily operations”, he says. But if small businesses, like those that make up the GovTech sector, are likely to take the largest hit from the post-pandemic economic shock, focusing recovery funding on them makes sense.

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