World leaders are gathering in Paris today to discuss the potential of reinventing government through digitization. As host country, France offers some cause for optimism but also some cautionary lessons about the challenges such efforts inevitably face.
A new report examining the country’s e-government efforts finds that while some progress has made, they are still woefully lacking compared to places like the U.K. and U.S. In lagging behind, the country is missing a chance to not only experience big costs savings and greater efficiencies, but also to help promising startups achieve scale while transforming its relationship to citizens.
On a more promising note, however, where such efforts have been implemented, the results have been impressive and offer a roadmap for accelerating towards a more profound shift to e-government.
“What’s at stake is government’s transformation and modernization,” said Axelle Lemaire, France’s former digital minister and now a partner at strategic consulting firm Roland Berger. “This is an area where Europe could be a leader.”
Produced by Public, a European incubator that seeks to foster ties between startups and governments, the report was released in conjunction with the GovTech Summit. The report was compiled in partnership with mobility startup Bird and strategic consulting firm Roland Berger.
In this case, GovTech includes such sectors as HealthTech, EdTech, smart cities, mobility, security, human resources, job markets, and CivicTech. Around the globe, breakthroughs in tech are profoundly disrupting staid sectors that create enormous opportunities, but also often leave governments as currently structured ill-equipped to truly leverage the possibilities.
The event features such speakers as the president of Estonia, which has become an international beacon for its radical adoption of e-government services. It is harnessing that digital prowess and the international attention into building its startup ecosystem.
Such efforts highlight the critical role that government can play in catalyzing innovation, a subject that can make Silicon Valley wince. Even so, companies such as Oracle and Cisco Systems received critical boosts in their early days when the federal U.S. government became among their biggest customers.
In the report, the authors hold up the U.S. as a model, noting that the market for GovTech services there has grown to $103 billion annually, pumping large sums into startups. The British government is also boosting e-government startups with $18 billion in spending.
That marks a starting point for France: Spending more of the public budget on startups. At the moment, the French government only spends 2% of its massive budget on contracts with private firms that labeled “innovative”. Given that France has one of the large public sectors in Europe, the potential to inject spending into startups is enormous.
However, there remains a wide chasm between startups seeking to reinvent these areas and the national government, the report says. Government remains complex and hard to navigate, and reluctant to take risks. No doubt, such an analysis would be common to any number of governments.
Entrepreneurs, needing to show results and growth to attract investors, are hesitant to sink months or years into trying to receive contracts for small pilot projects.
“I see a lot of startups, and I always ask if they work with the public sector,” Lemaire said. “And the answer is always no. I get a strong sense of missed opportunities on both sides.”
Where things do click, there are reasons for optimism. Paris-based Doctolib, a medical appointment booking platform that has raised $266 million in venture capital, has cut the number of missed appointments by 8% in France. While the French national health system is the gold standard in terms of service, until recently patients generally booked appointments by calling their doctor directly and then paying by check before getting reimbursed by the national system.
OpenClassrooms, also based in Paris, has raised $70 million in venture capital and opened up new ways for students to pursue training for digital jobs that circumnavigates the country’s famously rigid education system.
While the report goes on to list 50 promising GovTech startups in France, it also spells about 15 recommendations for reforming the government’s approach to working with startups.
That includes clearly defining which groups and agency are responsible for digitizing government, setting a goal that 10% of government spending will flow to innovative companies by 2025, creating more flexibility in purchasing decisions by making contracts smaller and giving government employees more authority to make decisions, and launching investment funds that will back GovTech startups and e-government accelerators and incubators.
Above all, it’s crucial to embrace such digital transformation as a core policy. In such an environment, government adoption should help startups not only earn revenue, but provide validation of their products and services that attracts more private venture capital.
“We identified a number of persistent blockages that prevent the market from reaching its potential,” said Marie-Barbe Girard, a research fellow at Public and a co-author of the report. “Most importantly, it needs to become a political priority for the government.”
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