INSUBCONTINENT EXCLUSIVE:
Here a tale of two organizations
When it comes to banking, I can walk up to an ATM anywhere in the world, slide in a card, hit a couple of buttons, and walk away with cash,
often in less than 20-30 seconds
It magical, but so quotidian that we easily forget the vast technical infrastructure that powers this experience.
Now, try to walk into a
government agency to get service done
You often need to get a ticket and wait, often for an hour or more
During a recent trip to the New York Department of Motor Vehicles, I ended up getting sent to four different lines, all of which were
independent, and because of a computer malfunction, the whole place was being run by people pointing and shouting.
The dichotomy between
those two experiences is, fundamentally, a difference in procurement.
Before you run to get coffee (or whiskey, for that matter), let me say
this: procurement is the sort of extremely boring but absolutely vital task that is both the barrier but also the opportunity for making the
DMV and other government services more like the ATM
New initiatives around the world are trying to rebuild procurement from the ground up, with entrepreneurship at their core
One initiative I&ve spent time with recently is CivTech, based in Scotland.
CivTech, a component of the digital directorate of the Scottish
government, is a sort of two-sided marketplace connecting startup founders with government agencies
Agencies sponsor challenges, and startups compete to be the best at solving that challenge, potentially winning hundreds of thousands of
dollars and a reference customer
Those startups are organized into batches, with the program launching its third batch shortly (applications are due July 2nd).
Alexander
Holt, head of CivTech, is an energetic true believer that startup innovation can transform government services
For him, the key question for public agencies is &how do you procure what you don&t know exists&
In the classical model of procurement, an
agency drafts a Request for Proposals (RFP) that spells out exactly what the agency is looking for from vendors
Then, whoever bids lowest on the RFP will usually get the contract
The disconnect is that agencies rarely know what solutions they need, and Holt says that often leads to disaster
&We are writing specs that we don&t understand, and we are looking at the solution, not looking at the problem,& he said.
Holt wants to
completely change that process
Instead of presenting a solution and asking for implementations, he wants agencies to present problems and keep an &open mind& about what a
His message to agencies is &don&t give us a solution you think you need, but give us a problem you think you have.&
Then — and this is a
major difference from traditional procurement — he encourages agencies to select several teams (usually three) to build pilot projects
that could solve the problem
The idea is to get a better sense of what solutions exist, and also learn how the companies function
&You get an understanding of their capacity and more importantly, their culture, and that is really important,& Holt explained.
After a few
weeks of building, the agency can choose to work with one company, and help them launch their product
The model is fast, since startups are iterating rapidly in competition with each other, but also cheap
As Holt said, &The other benefit for the challenge sponsor is that the amount of time that the companies are putting in versus what you&re
paying them is 10 times cheaper,& than conventional procurement models.
CivTech wants to educate the next generation of civic
entrepreneurs
For startups participating in the program, CivTech hopes it can provide them with legitimacy and a first customer for their
By the end of the program, &you have a first reference client, which is the government, that allows you to keep your equity 100% and your IP
Plus, the program connects its startups to citizens to accelerate the innovation feedback loop.
While the team has a bold vision, the
program had humble beginnings
The first cohort launched in June 2016 within days of Brexit, which radically redefined the future of the United Kingdom and Scotland along
The program also faced its own procurement challenge around finding a home, eventually signing a lease for its first batch less than an hour
before launch.
The program has grown rapidly since its inception
It had just 6 challenges during its first batch, but this time around has 10 challenges from a diverse set of agencies, including Scotland
health service and illicit trade agencies.
Transforming procurement and therefore government won&t happen overnight, but a change in
mentality is the key to imprinting entrepreneurship and startup culture on bureaucrats
Holt said that his message is always consistent: &show me the law, not the rule.& Laws are much more flexible than we think, and changing
procurement doesn&t start in the legislature, but in the acquisition office of every public agency.
