by techUK

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Fostering the govtech ecosystem: supporting SMEs in the public sector tech market

Small and medium-sized enterprises (SMEs) have a critical role in driving innovation in public services, and the case for bringing more of them into the public sector tech supply chain is well-made. As the digital economy grows, the public sector must prepare itself for the high level of service and convenience that citizens will expect when accessing public services. Public servants will expect to be able to use, during work, the same sort of tech they use outside it. In order to transform public service delivery, the government must harness emerging technologies. Doing so requires sourcing of innovative tech from a broad supplier base. SMEs make up more than half of private sector jobs, and are the drivers of so much UK innovation.


The coming decades will bring significant challenges for the UK’s public sector as it strives to deliver more value for money while meeting the needs of an ageing and, crucially, a more demanding population, as citizens become ever more consumer-like in their expectations of public services. In the UK, our consumers are some of the most prolific online shoppers in Europe. Expectations and demands are increasing as retail and online experiences improve. Entire business models are built on the idea of delivery at the touch of a button. As advances in the digital economy march on, the public sector must prepare itself for the high level of service and convenience that citizens will expect when accessing public services, too. We have to accelerate the transformation of public services through the smart application of digital technology. So government must work with innovative SMEs that can bring in innovation to transform public services.


But it is not always easy for them to get a foot in the door. The government has set a target of spending £1 in every £3 of its procurement budget with SMEs by 2022, and has taken a range of measures to try and achieve this (such as SME Champions and SME Action Plans for every department, and the Crown Commercial Service’s new innovation marketplace, Spark).


But despite recent efforts, selling tech to government remains disproportionately hard for smaller businesses. Earlier this year techUK’s annual Govtech SME survey found that 68 per cent of respondents said the government has not acted effectively on its commitment to helping small businesses break into the public sector market. Indeed, it seemed that SMEs were less confident that the situation will improve significantly in the short term, with only 37 per cent of respondents saying they felt the government’s SME target is achievable in the next five years, down from 49 per cent in the same survey last year.


In order to help SMEs navigate the govtech landscape and make the most of the opportunity, we have produced some guidance for smaller tech companies, highlighting the benefits of frameworks, early market engagement, and partnerships between companies of all sizes. The guidance covers the importance of various procurement frameworks, how to make the most of early market engagement opportunities, and advice on how to forge fruitful partnerships with established players in the sector. It also explores the nuances of the various public sector tech markets, such as central departments, defence, blue light services, health and social care, local government.


As well as helping government departments access a broader range of innovative suppliers, techUK hosts SME-focused sessions such as Innovation Dens and networking events to help support SMEs access this market. It is our ambition that the UK should become as well-known for govtech as it is for fintech. And we hope that the guidance in our Fostering the Ecosystem report can help make that ambition a reality. We encourage all businesses working to help improve the delivery of public services, so that together we call in support of government to build a smarter state.

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