Fostering the collaboration of GovTech startups – Part 2: The German approach

As part of the Hertie School MPP class of 2022, the author wrote her master’s thesis entitled “Fostering Collaboration of GovTech startups and the Public Sector in the context of digitalization – A comparison of the French and German approach”. The thesis sought to find out how much the French and German GovTech ecosystems differ from each other and to discern how well the GovTech strategies and collaboration between GovTech startups and the public sector in both countries work. 

Introduction

GovTech collaboration is largely influenced by two factors: relational factors and the institutional and political context of the country studied. Relational factors include the actors at play, the commitment to drive GovTech matters forward and what organisational types are used to foster collaboration between government and start-ups. This includes procurement laws and regulation but also the overall public sector culture and organisation. A crucial difference between France and Germany’s GovTech strategies and collaboration is the level of centralisation, with France being much more centralised and Germany being federally organised.

Germany

The main players for relational factors in Germany are the same as in the French GovTech context, yet they differ in size and importance. Entrepreneurs and startups total to about 300 GovTech startups, and though it is difficult to estimate the exact number of GovTech startups in Germany precisely, this number is less than in France.

On the public sector side, the Federal Ministry of the Interior and Community plays the leading role in GovTech matters, but there are also actors and initiatives in the Federal Ministry for Digital and Transport and the Federal Ministry for Economic Affairs and Climate Action.  As well, the IT-Planning Council is a political steering body that oversees and coordinates cooperation efforts in the field of digitalisation and information technology across political levels. 17 members from the federal and state governments in Germany make up the IT-Planning Council. Yet in stark contrast, the private sector is much more involved in GovTech matters than in France, filling a void that the French state occupies in driving investment and interest.

It is important to note that Germany has created a new flagship project for GovTech with the GovTech Campus. This will further influence the relational dynamics of the German GovTech landscape. Still the GovTech Campus was officially opened only six months ago, therefore the project is still in its infancy, but certainly interesting to watch and follow.

It is important to understand the institutional and political context in Germany as that of a federal system, which has often been perceived as an obstacle when it comes to digitalisation. There is no large-scale GovTech challenge programme or comparable programme to the beta.gouv in France at the federal level. There have been smaller challenge programmes at the state level such as the Idea Challenge hybrid e-government run by the Hessian Ministry of Economic Affairs, Energy, Transport and Housing. The challenge programme ran from October 2021 until March 2022 and startups could apply for one of three challenges, of which two were closed challenges targeting defined problem sets of the Hessian Ministry of Economic Affairs, Energy, Transport and Housing. 25 startups applied for the total of these three challenges, out of which nine were chosen to develop and present their GovTech solutions. In the end three solutions were chosen and awarded a prize fund, yet the awarding of the prize fund to the solutions did not automatically result in the awarding of a contract but all chosen solutions had follow-up discussions with the Hessian Ministry of Economic Affairs, Energy, Transport and Housing. In contrast to the French approach and beta.gouv, the challenges in such a smaller challenge programme are more pre-defined and tackle one persisting problem of public administration at a time. The Idea Challenge was deemed an overall success and generated attention in other federal states as well. The state of North-Rhine Westphalia for instance is now replicating such a challenge programme named gov.up.

A crucial aspect in the assessment of the Idea Challenge is that there is no overarching consolidation of this programme nor is it embedded in a greater initiative. It is a challenge coming out of a collaboration between a federal public sector agent, a consultancy and a GovTech firm. Potentially, this could be scaled to the federal level, yet for the moment there are no efforts of this sort. Every state interested can replicate this model, yet it shows the lack of a consolidated GovTech strategy for Germany.

To conclude, the German public sector and overall GovTech landscape is currently still reorganising and finding itself. The Idea Challenge in the state of Hesse did bring forward well-received prototypes for public services, yet the overall success of this particular initiative cannot yet be evaluated, as no tangible outcome has come out of it. This Idea Challenge underlines that a greater and better consolidated GovTech strategy on a federal, state and local level is still missing. Every state could launch such an initiative if they wish to do so, but eventually Germany needs well-constructed public services for every German citizen and not only for those that happen to live in the state of Hesse. There are still many more use-cases that need to be explored, and therefore the launch of a greater challenge-based programme for German GovTech is desirable.

Comparative findings

What can be seen in the analysis of the French and German cases is that both the relational and the institutional and political contexts – as laid out in the conceptual framework – play an important role for the interplay of GovTech startups and the public sector. A common obstacle that both countries face is that GovTech startups and the public sector are still perceived as antagonists by many, a belief perpetuated by long standing biases. Launching challenge-based programmes with more or less pre-defined challenges certainly helps to bring both worlds closer together, as currently getting in touch with each other, connecting and exchanging ideas is an existing problem that needs to be tackled first. With regard to relational dynamics, especially the government challenge programmes launched, both countries promote successful initiatives on different scales to foster GovTech collaboration. In terms of strategic thinking and the size of their government challenge programme France is a couple of years ahead of Germany.

Recommendations

• Strategic planning: In 2021, Germany first put the clause “we plan to facilitate procurement for EdTechs and GovTechs” in the Coalition Agreement of the German Federal government. This is vague statement with no concrete plan of action. France brought forward a well-developed GovTech strategy which is centred around eight missions and 35 concrete projects. This is supported by a three-year action plan and a GovTech catalogue. In this regard Germany can take France as an example. 
• Maintain diversity of GovTech ecosystems: State-startups work well in France. Due to the different institutional and political context, it is doubtful whether such a programme would work well in Germany, as the public sector is less active in the GovTech strategy than in France. Until now the German GovTech market is largely shaped by private actors, an ecosystem which cannot be overturned in a night, nor should that be the purpose of it all. Germany should not blindly apply French challenge programmes to its own context, but France can lead the way when it comes to the scaling process up to the federal level and how citizen-centric public services can be digitally accessed.
• Actor landscape: Collaboration does not happen only between startups and government bodies. Mediators from consultancies or GovTech ecosystem firms can help facilitate the discussion and bring both worlds together. Moreover, both France and Germany would benefit from a broader European GovTech Community Building, as synergies between countries can be found.

Teaser photo by Maheshkumar Painam on Unsplash.