Exclusive: How Poland is building GovTech’s new frontier
By Nurfilzah Rohaidi
GovTech Poland is changing up procurement to fund innovations by startups, SMEs and ordinary people.
Images: GovTech Poland
Procurement in Poland is changing. GovTech Poland was launched to allow everyone to pitch to government. The programme encourages small businesses to bid for government projects, and ordinary citizens to share their ideas.
Public spending in the country - several billion dollars of it - is seen as a “fund to promote innovation and growth”, explains Deputy Director Antoni Rytel.
New ways of working
GovTech Poland runs what are dubbed as ‘design contests’ to source for solutions for problem statements from various ministries.
These contests are open to individuals, companies, startups or research teams. Unlike traditional procurement, there are lesser restrictions around who can submit ideas and proposals. “Be it a five day old startup or be it a massive IBM, our goal is to have them all compete on equal footing, on purely merit-based criteria,” says Rytel.
Solutions are judged anonymously, to level the playing ground between companies of all sizes, he explains. Participants build minimum viable products and present a vision for how they would scale it up.
Finalists in the second stage have to build an actual prototype in the intended environment in order to actually win. “This is crucial as people often ask, how do we ensure that startups are up to the task? We have them actually build the thing before they win,” Rytel remarks. Winners receive a contract immediately, and do not need to wait for a lengthy procurement process to be over.
What’s more, with these contests, GovTech Poland solved the problem of small numbers of companies bidding for tenders. “Usually there are just two or three”, according to Rytel, and most worryingly, 43% of tenders would receive only one offer, he says. “There’s no future for innovation.”
The contests on the other hand, will produce “about 50 on average, with a peak of 96”. Greater choice in companies and solutions naturally leads to better outcomes, he points out.
Last year’s winners were almost entirely companies with under 250 employees - Small and Medium-Sized Enterprises (SMEs) - and almost all of them had never participated in government tenders before, Rytel continues.
For the Ministry of Finance, one winner had designed a machine learning algorithm to detect suspicious objects in containers crossing Poland’s borders. The traditional way of scanning each vehicle could take up to an hour; this solution takes seconds. “This was built within the competition framework and is a big, millions-saving thing,” Rytel remarks.
Another winner had developed an algorithm for making garbage collection more efficient. The software optimises collection routes, helping to reduce the city’s spending in this area by 25 per cent, according to Rytel. A southern Polish city is now using this solution five others are jumping on board too.
A third winner created a tool to support digital literacy efforts in Poland. They used data provided by ISPs across the country to uncover insights about people’s internet consumption habits, so that the government can design highly targeted campaigns and outreach to build up literacy in cities and areas that need it most.
How to hack it in Poland
Beyond procurement, GovTech Poland runs hackathons to solve “key social challenges” across the country, challenging white hat hackers to come up with solutions within a matter of hours or days. In 2017, 1,500 hackers came together to solve the problem of tax fraud. There was an 80 per cent drop in VAT fraud within 24 hours of the winning solution being implemented, according to Orłowska.
In fact, GovTech Poland were inspired to bring the best parts of these hackathons - “no prerequisites, and no formalities, only ideas and skills matter” - to the procurement process, she says. This was key to how Poland transformed procurement - and countries in the European Union are starting to take notice, Orłowska shares. The incubator and GovTech champion, Public.io, has now recommended the hackathon model to the British Government to adopt.
Poland’s experience shows that procurement can be a tool for any country to introduce innovative solutions, and boost the local startup ecosystem. Rytel puts it best: “You could think of it like a massive VC fund, the largest VC fund probably in Europe, to build and support these SMEs which have excellent ideas.”