GovTech staff shows a mobile app in Singapore for COVID-19 tracking in March 2020.CATHERINE LAI / AFP via Getty Images
For some years now, governments have been turning to
technology
startups
to improve the public services they provide to their citizens. There are digital solutions to streamline public procurement, others that improve health services and urban mobility thanks to data intelligence, and others that simplify and make tax collection or the management of public finances more efficient.
This ecosystem of companies, known as
govtech
, is experiencing a
boom
in Latin America.
And they could not disembark at a better time in a region that, despite its heterogeneity, was characterized by slow, non-transparent and often inefficient bureaucracies.
Everything seems to indicate that its contribution to public management will be crucial to modernize the States and, above all, to offer quality services adapted to the old needs and new expectations of citizens.
Govtech
is the newest movement in the public innovation sector that seeks to put the public sector in
startup
mode
, and that leaves three big winners: governments, companies and citizens. It is a relationship where the Government finds innovative products and services to generate social impact, companies obtain financial returns and new markets, and citizens receive quality, personalized and intelligent public services that affect their daily lives.
In Mexico City, for example, the startup OPI Analytics works with the Digital Agency for Public Innovation in the simplification of public contracting through “Tianguis Digital”, where suppliers can learn about the opportunities of supplying with the government, digitize tenders and have algorithms for detecting possible risks of corruption. In Colombia, Dasigno developed the “Mi Colombia Digital” platform to standardize public information from various territorial entities, generating savings of more than 30 million dollars.
In Spain, Citibeats created the Covid Observatory to understand the concerns and needs of people during the pandemic and allow agile and intelligent responses by governments. In fact, a sign of the interest in these new ventures with a public vocation is that the Digital Spain Agenda 2025 proposes the creation of a
govtech
innovation
laboratory
to incubate and accelerate solutions for public administrations. The Community of Madrid also has its own
govtechlab
, which seeks to bring the innovation generated by
startups, scale-ups
and digital MSMEs
closer
to the challenges of Madrid's public administrations.
The
govtech
trend
is accelerating for two main reasons. First, the significant increase in public spending on government technology in a world marked by a pandemic that has accelerated the digital transformation of public administrations and the growing expectations of citizens for better digital services. Second, because digital MSMEs are key to economic recovery and the revitalization of the business fabric in the new digital economy, particularly the one driven by data. There is no turning back: our future will be much more digital and the 2020s will be a digital decade. Not surprisingly, impact investors and venture capitalists are increasingly interested in this segment of the industry with high growth potential.
In this global scenario, Latin America is positioned as a leader in the development and deployment of govtech solutions to improve lives. There is more and more literature evidence about the potential of these ventures in the region, such as the reports on g
ovtech
and the Future of Government or the Govtech Index 2020, and investment initiatives to support
startups
in practically all countries. In this sense, at CAF we launched a first round of impact investments in
govtech startups
, with direct investments in Colombia, Spain and Mexico. Additionally, with our support, the Government of Colombia promoted its first Govtech Laboratory and the one in Córdoba, Argentina, is structuring a
govtech
investment
fund
. We are at a time of consolidation of digital agendas to articulate the talent of
startups
with a public vocation with the solutions that governments need and the investment needs that are required for the circle to close.
For the construction of the post-pandemic world,
govtech
is a strategy that strengthens the capacities of governments, especially at the local level, to meet the needs and expectations of citizens, who increasingly use digital channels to interact with public administrations.
Today we have the opportunity to rethink the way in which digital technologies are used within governments to improve their own operational efficiency, enhance the financial possibilities of the public sector, and positively impact people's lives, when they need it most.
Carlos Santiso
is director of State Digital Innovation at CAF