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26.1.2023 11 COMMERCIAL What is GovTech, and why is it so important for startups and our future? Alex Borg Alex Borg is a founder of GBU Ventures Ltd, a consultancy that advises on startup coaching and fundraising I n 2015, when I came up with the concept of asking start- ups to solve a problem in government, I wasn't aware that this approach would eventual- ly become an accepted method for many governments to inno- vate the services they provide to citizens and businesses. At the time I was working at the Malta IT agency (MITA) which, like many government agencies, struggled to cope with the mo- bile app explosion. Citizens had become so used to the imme- diacy and user friendliness of apps like Google maps, Hang- outs, iTunes and Uber that gov- ernment online services looked like a thing of the past if they weren't accessible by phone. After launching the first pi- lots, it became clear that start- ups were focused on solving a problem, they were fast and agile in learning and imple- menting, and were not hin- dered by past legacies. In ad- dition, they were given a tight timeline within which to de- liver. But most impressive was that startups could come up with an idea for a new service which still didn't exist. e above, in a nutshell, cap- tures how digital government transformed into GovTech using open innovation ap- proaches. e word Tech takes its cue from the different mar- kets which startups specialize in. For example, HealthTech, EcoTech and FinTech respec- tively deal with the application of technologies to healthcare, environmental sustainabili- ty and financial services. In its more extreme interpreta- tion, GovTech is about how governments engage with external entities that include citizens, NGOs, social entre- preneurs, researchers, start- ups and SMEs to unlock in- novative government services using emerging technologies. ough here too, the terms "government services" need to be qualified. Traditionally governments have provided services to their communities based on the classic life cycle. For example, registering a birth or a notarial deed, providing public health- care services, collecting taxes, paying out social benefits, sup- porting justice systems, and many others. However, life today has become extremely more complex: there are many citizens and businesses' needs which currently governments strive to service properly. With the data that govern- ments can make available, in combination with emerging technologies such as artificial intelligence, the Internet of ings, quantum computing and blockchain, a plethora of new services in the commu- nity can be created. But the beauty of it, is that these ser- vices are increasingly blurring the boundary of what is a gov- ernment service and what is ultimately a complementary community or infrastructural service offered by a startup, whose mission is to solve a so- cietal problem. Examples are mobility apps such as Bolt and Uber that are solving a huge mobility problem, or even payment apps like Wise and Revolut that have addressed a serious problem of fast foreign currency payments in a high globalized world. e benefits of this revo- lution are immense. Beyond creating new services that still don't exist, adopting these open innovation approach- es creates the right context for collaborating with the above-mentioned external en- tities to solve real world chal- lenges such as healthcare and education for all, homeless- ness, climate change, pollu- tion, portable and clean water, terrorism, racism, unemploy- ment and many others. And many governments like those of the UK, the US, Estonia, Lithuania, Denmark, Brazil and New Zealand are literally pumping millions in acceler- ators that include a GovTech programme. Examples are In- Q-Tel in the US, Accelerate Estonia and Creative HQ in Nez Zealand. ese initiatives often don't care whether the ideas span beyond strictly gov- ernment because they know that like that they are enabling an innovation ecosystem for entrepreneurs to discover new markets and services that in the end contribute to the so- cio-economic fabric of the country. e creators of this revolu- tion, in their large majority startups and SMEs are not only innovating, creating jobs and contributing talent. ey are generate huge multipliers that in their totality exceed the public investment made in GovTech approaches using startups and SMEs as an inno- vation marketplace. e size of the global Gov- Tech market was estimated at USD €350B in 2018 by Ac- centure, and expected to reach USD 1 Trillion by 2027 by Maia Research in their Glob- al Gov Tech Market Research Report 2022. Much of this will represent a huge contribution to the world economies in a post-Covid pandemic and post-Russia-Ukraine war re- covery scenario. More than that, such an in- novation revolution, may not only represent a push towards democratization — in other words a more level playing field for technology players and users alike — but a way to accelerate the resolution of some of the world's real-world problems through emerging technologies and data. Government agencies struggled to cope with apps that flooded the market in the mid-teens

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