Considering how easy it is to buy groceries, watch a movie or plan a vacation online, it’s surprising how using online government services can sometimes feel like stepping into a time machine that brings you back a decade or so.
There’s a reason why governments are often referred to as digital dinosaurs.
According to a European Commission study from 2012 that surveyed 28,000 European Internet users, only 33% used an online public services and intend to do so again. Meanwhile, citizens who don’t believe in the value of eGovernment services or had used an online public service but don’t intend to again made up more than 50% of respondents.
Slowly, but surely, governments across the region are beginning to acknowledge the many benefits of investing in digital apps and tools for its infrastructure.
A McKinsey analysis from 2014 suggested that “capturing the full potential of government digitization could free up $1 trillion in economic value worldwide” through more efficient transactions and communications.
Not only that, the way technology is advancing, if governments don’t catch-up, they risk losing citizen trust and alienating younger generations that demand the same type of digital service from the public sector as they receive in the retail sphere.
Ripe for change
But it’s not as easy as it sounds, especially when it comes to unhurried politicians.
Even if the advantages of digitalizing the public sector are blatantly obvious, some of which include improved access to services from both citizens and businesses as well as operational performance, the complex nature of governmental structures and notoriously long timelines makes it incredibly challenging to implement change.
For this reason, startups – who operate in an entirely different context – have typically avoided tackling this realm while investors have hesitated in handing funding over to those in the category.
However, things may be on the brink of change now that the EU is showing signs of relentless dedication to all things digital with initiatives such as Startup Europe and ambitious goals like creating a Digital Single Market.
Additionally, as of January 2015, the European Union is accepting submissions from SMEs, including startups, for mobile apps that can facilitate the delivery of public services. Companies have the opportunity to receive €50,000 to €2.5 million in funding depending on the type of project.
In the US, interest in the so-called ‘govtech’ sector has also been growing. In May 2014, Mountain View-based company OpenGov, which wants to help governments bring financial data to the cloud, secured $15 million in Series B funding led by notable American VC firm Andreessen Horowitz.
Later, in September 2014, a $23 million fund appropriately named Govtech Fund was launched by serial entrepreneur Ron Bouganim to focus on this sector. The new VC firm billed itself as the “first-ever venture capital fund dedicated to government technology startups”.
But what exactly is ‘govtech’? According to Bouganim, startups in this sphere build software and hardware tools that help governments run more efficiently and serve citizens better.
A promising outlook for govtech
Although usability of online public services is increasing, it’s doing so at a slow rate, according to an EU report from 2014. The focus still seems to be on making services available online rather than improving the experience for users.
However, a number of European companies have already begun to make waves in this space. Headquartered in Barcelona, Scytl is proving to be one of the driving startups in eGovernment technology, particularly in the area of election management and electronic voting. Backed by more than $113 million in funding, the company was also named in the Tech Tour Top 50 of Europe’s fastest-growing tech companies recently.
Another interesting project coming from the region is Your Priorities, an online platform developed by Icelandic non-profit organization Citizens Foundation. The tool lets groups of people discuss and prioritise various policy ideas with the most supported ones rising to the top to be actioned on. In Reykjavik, up to 40% of citizens reportedly use the debating platform.
With governments increasingly embrace involvement of external private-sector companies with knowledge of the latest technologies in its digitization plans, it seems to a bright time for entrepreneurs and startups to step up to also the plate.
If you know any that you think we should be aware of, do let us know!