Best of 2019: Demystifying government procurement for start-ups

By Kate Cornick, CEO, LaunchVic
Thursday, 02 January, 2020

Best of 2019: Demystifying government procurement for start-ups

The public sector traditionally procures from well-established companies. It’s time to think about working with start-ups.

Governments have a responsibility to drive economic development and jobs, and departments and agencies such as LaunchVic are established to support this. Another driver of economic growth is procurement, and while this is widely recognised by government as a job creator, not many people understand the huge potential offered by procuring from start-ups.

Each time a trusted public sector organisation such as the Victorian Government purchases from a start-up, they provide that start-up with a valuable use case, sending a powerful signal to other purchasers that it’s ‘safe’ to buy from them.

However, government procurement processes, designed to minimise risk, can make it difficult for the public sector to purchase solutions from start-ups. The CivVic Labs Accelerator Program aims to address this and is looking for civic problems to solve.

A safe place to do something new

As Australia’s first GovTech accelerator, CivVic Labs aims to connect government challenges with start-ups who can solve them. From the start-up perspective, CivVic Labs helps them scale, securing more capital and creating more jobs. From a government perspective, problems are able to be solved in innovative ways without huge risk, and government teams are exposed to new ways of working.

How the program typically works is that the government presents a challenge to CivVic Labs, which in turn promotes it to the start-up ecosystem, inviting proposals for solutions. The best ideas from submissions are refined in the CivVic Labs pre-accelerator, with the best solution for each challenge moving to the accelerator phase. Here, a minimum viable product or prototype is built — with the backing of CivVic’s funding, mentors and resources. There is also an opportunity for the start-up to secure up to $185,000 in investment to develop the solution as a market-ready product, to sell to other customers and effect change on a larger scale.

So far, four start-ups have successfully been paired with government challenges, building their capability and connections in the government sector. St Vincent’s Hospital, for example, was looking for innovative ways to reduce the number of hospital-acquired conditions (HAC) that patients contract within hospital walls. Currently, one in nine hospital admissions result in a potentially preventable HAC, and a breakthrough in thinking was needed.

Kate Cornick, CEO, LaunchVic

Kate Cornick, CEO, LaunchVic.

After posing the challenge to the CivVic cohort, the hospital partnered with data analytics start-up Sky Ledge to develop a platform that proactively predicts the occurrence of preventable HAC. Its solution has the potential to both save lives and ease the burden on the public health system caused by these preventable diseases.

In another positive outcome, the Department of Transport has started working with Envision Systems to understand how Victorians use public transport (trains, trams and buses) through sensory monitoring. The solution will hopefully help the state overcome current public transport data silos and gaps and meet future demand.

Other organisations in Victoria’s public system are in the process of linking up with the state’s approved innovators, and the call is out for further challenges to solve.

Bridge the middle ground — work directly with start-ups

Despite the perception that government is behind on its digital transformation journey, the public sector does want access to innovative thinking, and is committed to delivering citizen value through better services and increased efficiency. But public sector procurements traditionally rely on purchasing from larger, more-established companies. These enterprises are rarely working at the forefront of technology; where they are, they are likely to be working with start-ups. Can we remove the middle ground and see government working directly with start-ups?

CivVic Labs presents an opportunity for the public sector to progress the digital economy and accelerate the growth of the Victorian start-up ecosystem, which grew 40% in the past year alone. Government teams will also benefit from start-up collaboration in more intangible ways. For example, programs such as CivVic Labs offer a unique professional development opportunity, exposing public servants to agile start-up thinking.

Despite not always speaking the same language, public servants and start-ups share a passion for solving the same problems. Their differences, instead of keeping them apart, should be used to spark creativity and develop stronger solutions together.

I’d encourage any public servant who has ambitions to innovate to come forward and get involved. CivVic Labs is a great environment for Victorian Government professionals to learn from some of the best innovators in the world, whilst progressing the start-up sector, solving real challenges and realising economic potential. Both parties will benefit from the partnership, and Victoria’s economic development and job growth will follow suit.

Images courtesy LaunchVic.

This article was first published on 14 August, 2019.

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