This chapter considers when best to leverage GovTech by looking at its benefits and its risks, as well as the areas where its use is most relevant.
The GovTech Decision Tree shows that GovTech is most effective and has the greatest impact in scenarios where both the problem and potential solutions are clearly-defined, or where the problem is well-defined and the scenario is replicable, but a clear solution is not yet known or available in the market.
While GovTech can be a valuable enabler of the digital transformation of governments, it should not be used universally for every digital initiative. GovTech is best applied to support policymaking, administrative capacity, service delivery, and public engagement. To help decide when to leverage GovTech, government should consider its key benefits, risks, and the scenarios in which it can be used most effectively. To support decision-making, this chapter introduces GovTech Decision Tree.
While framing GovTech within specific policy domains or technology offerings has been useful in understanding the supplier landscape of the GovTech ecosystem, GovTech is best considered through its application across policymaking, administrative capacity, service delivery, and public engagement.
The application of GovTech has often been categorised by what GovTech actors can offer to public sector entities – i.e., focusing on specific policy domains or technology offerings instead of the challenges that they were hoping to solve. For example, GovMind and UVC Partners developed a GovTech start-up map based on nine different areas: space, defence, and strategic technologies; law and order; education and culture; health and social services; environment and urban development; public services; financial services; internal administration; and interface to citizens and organisations (Figure 5.1).
Source: UVC Partners (2022): https://www.uvcpartners.com/blog/govtech-is-gaining-more-and-more-momentum
Additionally, StateUp introduced another axis of categorisation: core technology. They analysed GovTech start-ups based on their core technological innovations, such as artificial intelligence, big data analytics, cloud computing, robotic process automation, and communications (StateUp, 2022[1]).
These categories can be useful in navigating the GovTech ecosystem but are limited in assessing where GovTech has the most impact. Entities like the GovTech Lab in Lithuania, for example, instead categorise GovTech projects by whether they address data-driven policy making, improve internal processes, or enhance services for citizens and businesses (GovTech Lab Lithuania, 2022[2]).
The OECD has built on this approach to instead frame GovTech within the context of its application to support policymaking, administrative capacity, service delivery, and public engagement.
GovTech can be used to solve challenges in the policymaking process, including with evidence collection, policy formulation, impact assessment, and evaluation monitoring. GovTech actors can help develop digital solutions to support these tasks, including with data collection and analysis, modelling, and foresight. These GovTech engagements seek to improve the efficiency, accuracy, and effectiveness of policymaking, enabling evidence-based decision-making and proactive public governance.
Seeking to overcome their policy challenges:
The UK’s ADViCE is identifying challenges where AI can support the green transition, linking these challenges with innovators and private funding to help solve them.
The Startup in Residence in The Netherlands used GovTech to gain insights into laws and regulations that might be overly restrictive for start-ups and scale-ups.
The GovTech Lab in Lithuania used advanced data collection and analytics to systematise forecasting of regional labour market demand to improve policies around vocational training.
Source: Startup in Residence (2023), SiR Intergov challenge winnaars (online): https://intergov.startupinresidence.com/nl/winnaars; GovTech Lab (2023), Build your government with GovTech Lab (online): https ://govtechlab.lt. (The Alan Turing Institute, 2024[3])
GovTech solutions can help improve internal operations or enhance administrative capacity of an organisation, including internal workforce management, process optimisation, productivity enhancement, collaboration, communication, and more creative problem-solving. GovTech solutions can streamline processes, improve efficiency, foster innovation, and enhance the effectiveness of public sector entities.
When considering administrative capacity:
CivTech Scotland used GovTech to leverage technology to try and create the most efficient and secure supply chain for public sector procurements,
Go2Gov in Australia sought to increase wellbeing and resilience of remote and mobile workforces and provide evidence-based strategies for positive behaviour change.
Creative HQ in New Zealand developed a smart solution to better identify and manage potential project delays for the planning and delivering of public transport infrastructure projects.
MiLaB in Colombia sought to digitise and automate the validation of invoices for medicines and medical devices to check the data against regulations, optimise processing times, and strengthen price control mechanisms for these items.
Source: CivTech (2023), The Round 9 Challenges (online): https://www.civtech.scot/civtech-9-challenges; Creative HQ (2022), GovTech projects (online): https://creativehq.co.nz/govtech-projects/, The CivTech Alliance (2023), Go2Gov (online): https://www.civtechalliance.org/go2gov, MiLAB (2023), Retos (online): https://www.innpulsacolombia.com/milab/retos
GovTech can enhance the delivery of public services through digital solutions that help conduct user research, enhance user-centricity, and improve service delivery. GovTech solutions can help securing the technical capabilities needed for proactive service provision and facilitate monitoring and evaluation of service delivery outcomes. These collaborations can enhance the quality, accessibility, and responsiveness of public service delivery – improving the overall experience for citizens and businesses.
When it comes to service delivery:
The GovTech Catalyst in the United Kingdom gathered and analysed data from new sources, such as information collected by residents or data captured using council vehicles, to improve delivery across local council services.
Creative HQ in New Zealand developed a solution to match the appropriate carer to the requesting senior using a product-service system with AI, that allows our community of seniors to access the care and support they require at a time that works for them.
The GovTech Lab in Lithuania created a smart mental health assistant for relapse prevention.
Source: https://www.gov.uk/guidance/current-govtech-catalyst-projects, https://creativehq.co.nz/govtech-projects/m, https://govtechlab.lt/
GovTech can be used to improve the way governments communicate and interact with citizens. For example, GovTech can help improve public communication channels, help governments process citizen inputs, and support the delivery of participatory initiatives. In return these digital solutions can enhance transparency, promote inclusive decision-making, and ensure citizen engagement in these processes.
To improve public engagement:
CivTech Scotland sought to discover how can technology offer everyone an individualised communications channel that is endlessly adaptable, never goes out of date and interacts with public sector services securely and in a timely way.
StartOff in Norway developed a digital solution for service user testing be used within Norway’s Labour and Welfare Administration’s for new services to ensure co-creation and interaction.
These examples show two possible different targets of GovTech challenges in citizen engagement area – directly building general citizen engagement or public communication channels (Scotland), or using digital tools to engage citizens for co-creation in specific areas (Norway)
Source: Government Digital Service (2020), Guidance: Current GovTech Catalyst projects (online): https://www.gov.uk/guidance/current-govtech-catalyst-projects, CivTech (2023), The Round 9 Challenges (online): https://www.civtech.scot/civtech-9-challenges
When considering the application of GovTech, there are some proven benefits from using GovTech that are delivered through its agile and collaborative approach in partnership with other sectors, including:
Better quality outcomes: GovTech can deliver better quality outcomes by leveraging the latest technologies and iterating with users to ensure that solutions are tailored to solve problems. For example, the Lithuanian Communications Regulatory Authority worked with Oxylabs to use AI to better detect child abuse content online – a manual process previously (Brazaityte, 2022[4]).
Cost-effectiveness: as well as better outcomes, GovTech’s process of piloting and experimentation offers an incremental and risk-oriented approach that can help optimise resources, spending and project delivery. Economies-of-scale are also created by scaling-up and reusing GovTech solutions and the engagement with the GovTech ecosystem can contribute significantly to aggregated productivity growth (OECD, 2020[5]). For example, IdeiaGov supported the development of technical solutions to support the pandemic response in Sao Paolo, which were funded and made available to different state agencies (Government of Sao Paulo, 2020[6]).
Accelerated public sector innovation: according to the OECD’s Innovation Determinants Model, positive experience of innovation is one of the main levers of change across the system. It can build normalcy around the innovation projects and lead to innovation being attempted again (OECD, 2018[7]). Seeing agility and a willingness to experiment can push public sector entities to overcome arbitrary restrictions and embrace more innovative practices, as we saw globally during the COVID-19 pandemic – optimising the use of public resources while reducing the burden on businesses The sharing of knowledge and experience also contributes to a sustainable culture of learning, while exposure to technologies can also spark further creativity and innovation – similar to how GovTech Singapore inspires continuous learning and experimentation within its digital transformation agenda (Cavanaugh, 2024[8]).
Economic opportunity: by actively procuring from start-ups, governments can stimulate local economies, fostering the growth of start-ups and SMEs. This can have a multiplying economic effect and drive job creation across OECD countries (Breschi, Lassébie and Menon, 2018[9]). GovTech solutions can also be exported, as in the examples of Vistalworks that worked with CivTech Scotland to expand to Estonia and Lithuania, or with the Estonian product, X-Road that was implemented locally before being exported and used in other countries, such as Finland.
These benefits have been proven through analysis undertaken by Lithuania, as outlined in the bow below:
In 2022, Lithuania’s GovTech Lab analysed 50 public sector entities that collaborated with GovTech actors between 2020-2022, which identified benefits beyond the creation of digital solution, including:Increase in knowledge and competencies: this included skills related to problem definition, agile methodologies, innovation procurement, use of emerging technologies.
Change in attitudes: organisations became more confident in their own abilities, became faster-decision makers and problem solvers, and more open to innovation.
Network expansion: engagement with other public or private sector organisations opened opportunities for further collaborations, including by raising the profile of the organisation.
Engagement with start-ups, innovators and intrapreneurs can provide immense benefit. However, it is essential to acknowledge the potential risks that can arise in the absence of the right building blocks and enablers, or if the GovTech approach is used at an inappropriate time or in inappropriate ways.
Creating new dependencies: GovTech emerged partly in response to a dependency on legacy ICT vendors that drove up costs and hindered flexibility. Governments should avoid the same dependency on GovTech actors. Proper knowledge transfer helps address internal capability gaps, while contingency plans ensure the ongoing support and maintenance of any GovTech solutions – especially if a GovTech partner is no longer viable given the high failure rate among start-ups, in particular. Finally, controls are needed to ensure transparency, ethical conduct, confidentiality, and avoid any conflicts-of-interest (COI) to mitigate the risk of any misconduct.
Disincentives for further innovation or collaboration: the absence of the right enabling conditions for GovTech can disincentivise further innovation or collaboration. Frictions can be created from misaligned expectations, cultural differences, or complex and burdensome processes. Choosing the wrong challenge for a GovTech engagement also risks leading to disengaged actors and unrealised expectations. Finally, unsuccessful projects should still be celebrated and learnt to manage the risk that they discourage the future uptake of GovTech.
Inefficient use of resources: improper use of GovTech can result in a mismanagement of public resources. First, without considering the scalability in the solution’s lifecycle, there is a risk of not realising the expected benefits or return on investment. Second, if the underlying conditions for innovation and co-creation are not in place, there is a risk of wasted resources.
Security, privacy, and confidentiality risks: consider the access to data, information and systems granted to their GovTech partners. Access should be restricted, information management and confidentiality should be outlined in the contract, and any COI should be managed.
Inconsistency in the use of digital tools: GovTech solutions need to be developed with consideration of their interoperability and integration into their broader digital environment, otherwise the effectiveness and adoption of the new solutions might be at risk.
Many of these risks were realised with the accelerated digital transformation seen during the pandemic:
The Covid-19 pandemic put strain on good governance, as governments struggled to keep pace with the spread of the virus, due to rapidly-changing needs, expectations, and responsibilities in the delivery of public services to support the public health response. Governments and industry collaborated quickly to develop new and innovative solutions at scale, but processes were sometimes circumvented or incorrectly used to enable the governments’ response to achieve outcomes quickly. This included the overuse of direct or closed procurements, vendor lock-ins, limited transparency, and varying contracts and their scope to needing to conduct additional procurements.
Within the context of GovTech, this demonstrates the importance of ensuring that procurement and risk management frameworks are flexible enough to enable innovation, but also sufficiently robust to ensure that GovTech happens with integrity and the best possible use of government resources.
Understanding the application, benefits, and risks of GovTech, it is necessary for public sector entities to assess if GovTech is the right approached based on the challenge and potential solution. By following the GovTech Decision Tree (Figure 5.2), actors can determine where GovTech would have the greatest value.
The primary focus of GovTech is to solve a ‘challenge’ for the public sector. The challenge should be framed around the need for innovation or a digital solution – time should be taken to understand what the problem is, who the users of the solution would be, how they would be affected, and what needs are not being addressed. This should be kept in mind when assessing a challenge against 3 critical questions:
1. What is the scope of the challenge? The scope of the problem should be narrow to facilitate a clear and effective collaboration between GovTech actors and the project in the public sector to ensure that the engagement is focused and productive. For example, instead of tackling deforestation, Lithuania’s Ministry of Environment narrowed its goal to instead find a solution to monitor how tree coverage changes in the country (GovTech Lab, 2021[11]).
2. Is the problem clearly defined? The challenge should be well-defined to be clear on the results the actors are expected to achieve – setting clear goals to evaluate whether progress is being made towards addressing the problem, as well as to assess when and how to scale GovTech solutions. It should also be clear that the challenge can be addressed with technology. If a challenge requires policy or legal change, then it is more appropriate that the solution leverage other policy or innovation labs across the public sector.
3. Is the problem relevant to other institutions? GovTech engagements can have the greatest benefit when the challenge at hand is not unique to a single organisation but shared with other organisations – either nationally or internationally. This approach ensures that public sector entities receive updated solutions and attract more interest from the ecosystem, thereby increasing the likelihood of generating better ideas.
GovTech solutions can vary significantly. It is important to consider the nature of the potential solution, the capabilities required to develop it, and who are the most appropriate GovTech partners to engage. This can be supported by asking 3 additional questions focussed on the solution:
4. What is the potential scope of the solution? GovTech initiatives tend to be most successful when focused on the development of standalone digital tools, such as algorithms, platforms, or apps. These types of projects align well with the skillset and capacities of GovTech innovators. For example, during the Covid-19 pandemic, the Governments of Singapore and Australia worked collaboratively with GovTech actors on the rapid development and delivery of citizen-tracing apps, which formed a key part of the early pandemic response. The two governments were able to leverage existing technologies in innovative ways, creating scalable solutions that were considered and replicated by governments elsewhere (Goggin, 2020[12]).
5. Are solution requirements clearly defined? If so, there may be less opportunity for co-creation. GovTech is most useful when GovTech actors collaborate on new solutions. For challenges with clear solution requirements, countries might instead explore other procurement approaches.
6. Is there a possible solution already available in the market? Public sector entities should engage with their networks and do research to understand if there are solutions already available. These could include solutions from previous GovTech engagements that can be scaled up or adapted to address the challenge at hand. If no solution is available, GovTech actors can still be engaged but organisations should allow for additional time and iterations to develop a solution.
The GovTech Decision Tree in Figure 5.2 guides public sector entities through the key decisions on when best to leverage GovTech, as well as providing an indication of the expected maturity of the output, possible alternative approaches, and whether a GovTech engagement is worth the effort required. To demonstrate this, each potential engagement in the Decision Tree is coloured with either:
Red: to indicate very limited benefit from a GovTech engagement.
Yellow: to indicate some benefit, but where some additional cost or effort may be required.
Green: to indicate the most suitable for a GovTech engagement.
According to the GovTech Decision Tree, the scenarios that are most suitable for GovTech include:
An ideal scenario for GovTech is a challenge with a relatively narrow scope, specific to a particular area or process, for which there is no clear solution. This is where GovTech is leveraged for a purpose, and not just for the sake of innovation. This scenario allows for clear ownership within the public sector entity and enables GovTech actors to think creatively and experiment with outside-the-box solutions. Further, the opportunity to scale solutions provides additional incentives for GovTech actors to excel.
Another suitable scenario is when both the problem and potential solution are clearly defined, and viable solutions already exist in the market. While this engagement may involve less co-creation, it still engages GovTech actors and requires some adaptation of the solution to meet user needs. This scenario is where it would be ideal to explore possible GovTech solutions off-the-shelf instead of creating one from scratch.
Beyond assessing the scenarios, public sector entities should consider if the necessary building blocks and enablers are in place to facilitate a successful engagement, including by asking:
Does the organisation have sufficient capabilities and resources internally?
How will the organisation engage the market and attract the right innovators?
Is the challenge relevant and interesting enough to attract innovators? If not, can it be reframed?
Are there any sensitivities in engaging external GovTech actors?
Is the data required for the solution available and accessible?
Potential projects should also undergo internal reviews and approvals to ensure good planning, which could include engagement with a centralised GovTech team. For example, in Lithuania, the GovTech Lab evaluates and approves projects against 5 main criteria:
Evaluating how well analysed and understood the problem is.
Assessing the broader need, including strategic alignment with government priorities and similar challenges elsewhere.
Determining the potential benefit of the project.
Evaluating the potential for innovation organisationally, nationally, and internationally,
Determining the best delivery approach, including procurement and resourcing.
By considering these in line with the GovTech Decision Tree, organisations can be confident that they have the right conditions in place to enable a successful GovTech engagement.
Source: Authors’ own design.
[10] ANAO (2022), Digital Transformation Agency’s Procurement of ICT-Related Services, https://www.anao.gov.au/work/performance-audit/digital-transformation-agency-procurement-ict-related-services.
[4] Brazaityte, E. (2022), Empowering the Lithuanian Public Sector in the Mission for a Cleaner Internet, https://oxylabs.io/blog/empowering-the-lithuanian-public-sector-in-the-mission-for-a-cleaner-internet.
[9] Breschi, S., J. Lassébie and C. Menon (2018), “A portrait of innovative start-ups across countries”, OECD Science, Technology and Industry Working Papers, No. 2018/2, OECD Publishing, Paris, https://doi.org/10.1787/f9ff02f4-en.
[8] Cavanaugh, L. (2024), How a growth mindset helps Singapore’s GovTech agency stay ahead of the curve, https://govinsider.asia/intl-en/article/how-a-growth-mindset-helps-singapores-govtech-agency-stay-ahead-of-the-curve.
[12] Goggin, G. (2020), “COVID-19 apps in Singapore and Australia: reimagining healthy nations with digital technology”, Media International Australia, Vol. 177/1, pp. 61–75, https://doi.org/10.1177/1329878X20949770.
[6] Government of Sao Paulo (2020), IdeiaGov stimulates business innovation through government demands, https://www.saopaulo.sp.gov.br/spnoticias/ultimas-noticias/ideiagov-estimula-a-inovacao-de-empresas-por-meio-de-demandas-governamentais/.
[11] GovTech Lab (2021), GovTech Challenges, https://govtechlab.lt/lt/challenge/kompleksinis-misko-dangos-monitoringas-naudojant-pazangius-dirbtinio-intelekto-pagrindu-sukurtus-algoritmus-ir-palydoviniu-vaizdu-informacija/.
[2] GovTech Lab Lithuania (2022), GovTech Challenge Series Analysis and Overview, https://govtechlab.lt/wp-content/uploads/2023/01/GIS_apzvalga.pdf.
[5] OECD (2020), Start-ups in the time of COVID-19: Facing the challenges, seizing the opportiunities.
[7] OECD (2018), The Innovation System of the Public Service of Canada, OECD Publishing, Paris, https://doi.org/10.1787/9789264307735-en.
[1] StateUp (2022), StateUp21: Data-driven insights into global public-purpose tech, https://stateup.co/stateup-21/.
[3] The Alan Turing Institute (2024), ADViCE, https://www.turing.ac.uk/research/research-projects/advice.