International comparisons show that Germany is lagging behind in the digital transformation of public administration. GovTech companies (short for government technology) offer innovative, digital solutions for the digitisation of administration, climate change, mobility and energy transition.
In a supplier analysis, we looked at 170 German, 146 French and 188 British GovTech startups. The analysis shows that German GovTech startups are on average younger (5.3 years) than British (5.9 years) and French (6.1 years) startups. It is particularly striking that there are significantly fewer large GovTech startups in Germany. Only 0.06% of German GovTech startups are large companies, compared to 6% in the UK and 7% in France.
93% of German GovTech startups offer solutions for the municipal level, of which 63% have already published at least one reference project with a municipality or municipal company. However, surveys show that only a small proportion of municipalities have awarded IT projects to startups, leaving a large potential for market penetration. The main barriers to collaboration between public sector clients and start-ups are cultural differences and complex public procurement laws.
Joint projects between government departments and GovTechs promote cultural change in government and create mutual understanding. Specific contacts for start-ups as well as exchange and networking opportunities facilitate the market entry of start-ups and their first public customers. High political support and strong public relations for GovTech initiatives underline the relevance of the topic, strengthen participation and enable the successful scaling of innovations within the public administration.
