GovTech and the future of government

The Campus Party, one of the largest innovation and entrepreneurship events worldwide, returned to Colombia, bringing together more than 5000 people for five days. For the first time in its history, it included a GovTech Latam Forum, which brought together digital startups with a public vocation and social impact.

This first GovTech forum in the region provided a meeting point between the public and private sectors to share technological trends to solve public challenges and identify solutions based on disruptive technologies that will generate more and better services for citizens.

For Carlos Santiso, Director of Digital Innovation of the State at CAF, “new public-private partnerships are needed to incubate and drive innovation in the public sector. The challenge of the region is that we have 21st century societies with 20th century states.” In this sense, GovTechs, as data-driven digital startups, can offer their products or services to governments, to help them act with streamlined, open and innovative procedures.

“Govtechs are becoming the most promising trend to transform governments. We are experiencing a paradigm shift, Santiso noted, from a digital government or e-government, to a smart government or i-government. It is not just about opening up data, but about effectively using them to improve public policies and services, and ultimately, improve people’s lives.”

The global market value of the GovTech business is estimated at US$1 trillion by 2025. This is largely due to the opportunity to tackle new economic sectors and the cost and efficiency savings these projects may represent for governments.

In Latin America, many digital startups are emerging, often leveraging public data opened by governments themselves. GovTech ecosystems are rapidly maturing in several countries in the region, generating concrete public value, impacting the quality of public spending, and even enabling significant savings for national treasuries. Particularly noteworthy is that many of these startups are concentrated in cities and focus on the digital modernization of municipal governments.

Below are some examples of GovTech startups are emerging in the region:

• In Argentina, MuniDigital ® is a government management platform for municipalities that, according to a CAF report, has had return on investment of more than 700%, savings for municipal governments (La Rioja) of more than 17 million Argentine pesos, and estimated reductions of more than 163,000 kg of CO2 in transport efficiency.
  
  
• In Colombia, Datastketch has developed an ecosystem of open data-driven services that have produced projects to centralize infrastructure system information and its relationship to development indicators, and to disseminate cases of corruption, ensuring the right of access to information.
  
  
• Mexico’s Visor Urbano is a web platform for the management of online procedures related to urban development, municipal cadastre, and territorial planning. It has generated savings for citizens of more than US$60,000, and has contributed to tax revenue increases of about 21% based on the systematization of territorial management data.
  

Because of the potential impact these companies can have on the region, CAF has unveiled its agenda to support GovTech ecosystems in the region, which includes the following axes:

• Support to governments, with advisory services for governments and cities in the areas of diagnostics of GovTech ecosystems, public policies the leverage them, public procurement systems for innovation, development of catalyst programs, and the role of innovation laboratories, among others. For example, a maturity index of public policies in this area will be developed.
• Generating knowledge about GovTech ecosystems at the regional, national and local levels regarding government demand, the offer of GovTech products and services, and measuring the impact of these solutions. For example, a regional report will be published and a GovTech observatory will be established.
• Design of financial mechanisms, through the creation of financial products for the development of ecosystems, including support for the structuring of public, private, or mixed funds to support innovation in the public sector. For example, the feasibility of a regional investment fund is being assessed.
• Strategic alliances, to work with public and private strategic partners in the creation of networks and work schemes that enhance the work of all stakeholders towards the same goal.