Realizing the potential of GovTech — if not now, when?

It is time for decisive action. GovTech has enormous potential to create a more responsive, inclusive, transparent, and efficiently-performing public sector: one that better meets societal needs. And now, perhaps more than ever, the design and application of tech products and services is a strategic topic for governments globally.

Why now? Because as well as facing profound changes in the political and geostrategic landscape, governments today have an extraordinary opportunity in GovTech to reimagine the public sector as the operating system of society, where technology can unlock unprecedented value for all. Thus, GovTech is not just about digitizing processes to make public service delivery more efficient and to improve the citizen experience — it is a central catalyst in redefining government for the future.

This is one of the strands in a new report from the World Economic Forum and the Global Government Technology Centre (GGTC), in collaboration with Capgemini. The Global Public Impact of GovTech: A $9.8 Trillion Opportunity quantifies the public impact of GovTech, rather than focusing only on the size of the GovTech market, which previous reports have done. This value-impact thinking positions GovTech as a topic for investigation not just by government CTOs and IT departments, but by the broader leadership community, from agency and departmental heads to secretaries of state and government ministers. As we see it, we’re not there yet in this respect — but we should be!

The changing nature of GovTech

You might argue that governments have been using technology to improve how they operate for decades. And you’d be right. So, what’s different about the current state of GovTech?

To answer this, let’s start with the technology itself. There’s a plethora of new and emerging digital tools that can now be harnessed to modernize public sector operations. These include the real-life examples of AI-powered platforms being used to detect financial fraud and to speed up tax processing, and data-driven early-warning systems improving disaster response.

Many of the newly available technologies offer the ability to create comprehensive systems that streamline government functions and interactions with both citizens and businesses. We can use these technologies in an interconnected way, enabled by foundational digital capabilities, such as digital identity systems and payment platforms, to deliver seamless, interoperable government services.

The need for action on challenges

Of course, beyond the availability of game-changing technology, governments must address challenges that would be difficult to tackle without technology. First, there are barriers to the continued delivery of public services, including legacy systems that are no longer up to the task. Second, there are global challenges, ranging from climate change to resource scarcity and global health crises.

GovTech offers a means for governments to co-ordinate responses to all of these within and across national borders. But only with a collaborative mindset.

Adopting an ecosystem approach

This need for collaboration brings us to our next point: Value today is rarely created by just one solution from just one company, but rather by curating the best partners to achieve the mission at hand. As a result, GovTech extends to a broad ecosystem of providers, integrators, manufacturers, cloud providers, software vendors, startups, etc., as well as to the government bodies they’re supporting.

Collaboration will be essential to advance global GovTech developments, as exemplified by the World Economic Forum’s 2024 launch of the GGTC in Berlin in September and in Kyiv in December — with a network of further Centres planned globally. These will connect innovation ecosystems to a global community of experts and practitioners to inform and inspire the GovTech agenda worldwide.

This agenda moves us beyond “IT” as it’s understood today. As the World Economic Forum sees it, GovTech enables a “whole-of-government approach by applying emerging technologies and digital innovations to enhance the efficiency, effectiveness, and accessibility of public administration and services”.

How GovTech creates value

Delving into these enhancements, the new report states that the GovTech market will create an opportunity to generate $9.8 trillion in public value by 2034. This value will be realized through three key value drivers:

• Efficiency gains: Streamlining processes, reducing costs, and improving service quality.
  The application of technology to automate processes and optimize resource allocation can drive improvements that research suggests could lead to a 30% increase in efficiency, with global savings projected to reach $5.8 trillion by 2034.
• Transparency: Enhancing accountability in process, reducing corruption, and building public trust.
  The adoption of digital tools, such as e-procurement systems, e-invoices, and digital IDs, increases transparency within government operations. It is estimated that GovTech solutions could reduce the financial toll of corruption by as much as 10%, potentially saving $1.1 trillion by 2034.
• Sustainability: Optimizing resources, cutting waste, and supporting environmental sustainability.
  Digitizing public services reduces reliance on resources, from paper to fuel, directly minimizing the environmental footprint of the public sector. Factors such as remote work, efficient building management and reduced vehicle emissions are crucial to making the public sector less resource intensive.

That’s not all. Value creation will extend beyond merely digitizing processes and automating tasks to embrace the building of digital public infrastructure (DPI), for example digital identity systems and payment platforms, and digital public goods (DPGs), such as electronic health record management systems. This will drive greater public impact, helping to create safe and inclusive participation in markets and society. To support governments on this journey, the GGTC Berlin aims to promote best practices and re-use of existing GovTech solutions in the public sector.

Use cases evidencing the impact of GovTech

A well-functioning administration, supported by efficiency, transparency, and sustainability, strengthens citizens’ trust in the state and thus stabilizes the government and its structure. Strategized and implemented well, GovTech is a key pillar for achieving this.

The impact of successful GovTech implementations is already being realized in some trailblazing administrations. This includes:

• Rio de Janeiro’s GRAS, which detects risks of corruption and bias in government contracting via advanced data analytics.
• Ukraine’s Unified State Electronic System in the Construction Sector (USESCS) that is bringing transparency to the construction process, covering the entire project life cycle and reducing corruption risks.
• Malaysia’s National Digital Identity (NDI), which allows users to authenticate themselves online for various services without relying on physical identification documents.
• Germany’s City of Hamburg, simplifying the procurement process for startups with its GovTecHH initiative. This enables startups to bypass traditional bureaucratic delays, accelerates the adoption of innovative solutions, and makes it easier for those young companies to engage with public administration.

Taking action — now!

Clearly, some administrations are already embedding new technologies, like AI, virtual reality and the internet of things (IoT), within government operations. Emerging economies in particular are using them to leapfrog developments and modernize their administrations at breathtaking speed. In the mature OECD countries, full-scale GovTech transformation doesn’t happen overnight. Here, barriers exist, such as outdated, fragmented legacy systems that are not easily compatible with modern digital solutions. Or there is a lack of leadership buy-in to the strategic value (societal, environmental, public trust, etc.) of GovTech.

We believe that strategic and decisive action is needed to realize the potential of GovTech. Sharing lessons and transformation experiences within the GovTech ecosystem can help. As Markus Richter, State Secretary at the German Federal Ministry of the Interior and Community, said at the launch of the GGTC in Berlin: “We need to learn from each other, explore existing use cases, and fast-track high-priority digital transformation activities. It is crucial to provide a platform like GGTC for this kind of collaboration and exchange between governments, technology companies, or research organizations.”

Together with our partners we’re helping public administrations tap into the value of GovTech. Our own extensive experience of creating and leveraging digital ecosystems will help government organizations access new and emerging GovTech solutions with huge potential to drive greater value, foster innovation and, importantly, instill public trust.

Read the report

Read the report on the World Economic Forum’s website — The Global Public Impact of GovTech: A $9.8 Trillion Opportunity

The blog is co-authored by Marc Reinhardt: Executive Vice President, Public Sector Global Industry Leader, Capgemini and Manuel Kilian: Managing Director, Global Government Technology Centre Berlin.