CivTech is the Scottish Government’s challenge programme for innovation. The programme pioneers a smarter, faster approach to public procurement to harness entrepreneurial tech innovation and citizen engagement, improving public service delivery, creating economic development opportunities and fostering an entrepreneurial mindset within government.
In a world where technology moves quickly, the problem for public sector organisations is this: how can they procure what they don’t know exists? A new approach is needed, one which shifts from a place of closed prescriptive tendering to that of open challenge based questions. And with that shift a move away from the traditional method of procurement that favours larger supplier companies who can afford the time and money to navigate their way through the complex public procurement process and open ourselves up to small, talented tech companies, who have rarely been engaged by the public sector.
In 2016, the team devised the CivTech Innovation Flow, an end-to-end project methodology - a six-stage, nine-month process, from challenge definition to delivery of a minimum viable product with ongoing pre-commercialisation support. This model encourages the rapid development of innovative, cost-effective solutions.
From a pilot in 2016, to a successful consolidation in CivTech 2.0 in 2017, CivTech 3.0 is now underway, and the programme continues to evolve. Across the three cycles, CivTech has collaborated with challenge sponsors from a wide range of Scotland’s public services:
•Scottish Government - Justice, MyGov, Cyber Security, Digital, Planning
•Public bodies - Transport Scotland, SEPA, Cairngorms National Park, SNH, Historic Environment Scotland, NHS NSS & NHS, Scottish Enterprise, Scottish Housing Regulator, the Scottish Anti-Illicit Trade Group
•Local authorities - Glasgow City Council, Stirling Council
•Third sector – YoungScot (working with Young People)
To date the team has run 26 challenge-based procurements on behalf of 20 organisations over three cohorts comprising between 7 and 11 eleven challenges.
Challenges are varied: how can we improve flood warning capability for communities; how can we improve access to NHS data; how can we prevent illicit-trading; how can we use data to improve social housing standards; how can we help young people start a conversation about mental health?
CivTech empowers challenge sponsors to take a less risk-averse attitude towards procurement and to benefit from exposure to cutting edge thinking and innovation. Phased contract sizes (£3k (Exploration), £20k (Accelerator), <£220k (post-accelerator) with break clauses in the process ensure that any delivery failure is captured early and, if necessary, terminated. Once shortlisted, up to three teams are selected to work with the Challenge Sponsor for three weeks to refine their proposed solution. With that initial funding, companies have produced better quality applications, for example delivering 3D print outs of flood warning capabilities, or buying a car and strapping an iPhone to the dashboard to use the "accelerometer" data to grade the quality of roads. This vital ‘Exploration stage’ gives sponsors a better idea about the cultural fit of the applicant teams, which in turn leads to a better selection decision. One company is selected for the accelerator to develop their product in collaboration with their Challenge Sponsor, and with citizen participation in a four-month product development cycle. Included in this Accelerator stage are 40 workshops on product, business and personal development led by providers who have built, sold or crashed their companies. An additional benefit to companies is they keep 100% of their IP and their equity. All this activity takes place in a co-located studio within CodeBase, Edinburgh, supporting the cross-pollination of tech, skills and expertise, not just amongst the companies, but amongst the sponsors. At the end of Accelerator period, the Challenge Sponsor has the opportunity to continue the contract with the participant team under a pre-commercial contract and thereafter is eligible for a royalty-free license. By virtue of the CivTech process, challenge sponsors understand public service problems better through ongoing interaction with tech innovators, citizens, innovation centres and academia. During CivTech 2.0 we tested an Intrapreneurship Leaders Programme for challenge sponsors, to enable them to learn alongside the companies in the workshop programme. For CivTech 3.0 we have responded to feedback and developed this to a fully immersive programme with more public service tailored content to give public servants the tools and confidence to spot opportunities and create public value within their own organisations. Also for CivTech 3.0 we have innovated again. Two challenges include elements of direct citizen engagement starting right from the definition of the challenge - in these cases involving young people. As these go through the CivTech accelerator process, the citizens will work with the company selected to develop solutions which best meet their needs. Testing this new model of citizen-sourced challenges opens up the potential for future innovation in citizen commissioned and selected products and services.
What Makes Your Project Innovative?
CivTech works as challenge 'scaffolding' to generate greater interest in innovators outside of large corps who dominate the public bidding process. Public sector challenge funds are a well-trodden path, like SBIR in the US and SBRI in UK and Australia. However, these operate in linear, single challenge calls. CivTech set out to prove that running concurrent challenges from across the public sector – health, cyber, transport and environment – develops a more compelling bedrock for change. The cross-pollination of innovation, not just between the 8-11 companies working on their respective challenges but also between challenge sponsors, builds a critical mass and act as a beacon for other change programmes. CivTech has sought to further capitalise on this cross-pollination by developing an intrapreneurship programme for challenge sponsors, sharing the learning the companies receive and building workshops that allow them to bring an entrepreneurial mindset back to their organisations.
What is the current status of your innovation?
CivTech 3.0, launches on 9 October 2018 and will be opened by the Cabinet Secretary for Finance, Economy and Fair Work. It brings together eleven challenges from: Scottish Natural Heritage, NHS NSS, SG Digital, SG Digital Planning, Scottish Housing Regulator, Scottish Anti-Illicit Trade Group, Young Scot, Glasgow City Council and Stirling Council. The challenges range from asking how young people can start the conversation about mental health to how can we use tech to enhance engagement with the outdoor environment.
In July 2018, 15 months after leaving CivTech, the beta cohort of companies had won contracts worth £1.3m, investment of £1.5m and created 30 full-time employee positions created (excluding founders). In the 3 months since leaving CivTech 2.0, companies have won £135k contracts and created 8 full-time employee positions.
CivTech has now set up an Academy to share our learning internationally, with two deep dives by Victoria State and Polish Governments completed.
Collaborations & Partnerships
Challenge sponsors bring domain expertise, resources and data. The role of citizens in co-production is paramount. Products/services are designed with, not just for them. CivTech has collaborated with 20 different sponsors on 24 challenges – from local government, central government and public bodies. For CivTech 3.0 in 2018 there is a citizen challenge led by young people, and a challenge sponsored by Scotland’s youth engagement organisation YoungScot with co-production with young people.
Users, Stakeholders & Beneficiaries
A challenge example that demonstrates the collaboration: the Scottish EPA submitted a challenge around improving flood-warning capabilities in rural communities. One trader responded with his 3D printed sensor and LED receiver, which was shortlisted through to the accelerator. The Innovation Centre for Sensors provided academic support. The Flood Forum provided extensive community engagement. The whole process delivered a community focussed product far cheaper than conventional systems.
Results, Outcomes & Impacts
As a pan-public sector tech Accelerator, CivTech is pioneering a fresh approach that has created new pathways for tech SMEs and startups to compete for public sector contracts. To date, 16 out of 18 of our challenge sponsors have continued a contractual relationship with companies post-accelerator, recognising the value of the approach. Companies have won over £2.0m in contracts outwith the programme, creating over 40 FTE jobs with a local economic impact of over £2m/year. Stirling Council made a cost-avoidance of over £1.5m through their challenge.
CivTech 3.0 saw 129 applications from across the UK. 3 successful companies on the accelerator will relocate from London and Bristol. This shows the attraction to move city to be part of a ground-breaking programme. All these figures bode well for future cohorts as we are asked, by both the business community and political community, to scale in location and number of challenges.
Challenges and Failures
As is normal for start-up culture, our initial expectation was that 50% of these projects would fail. Between January to June 2016 we held 146 meetings (twice a week with procurement) across the Scottish public sector to garner interest and collect challenges. We tested the concept with over 200 businesses and went back and forward refining the process before we launched. Finally, after four false starts and ten months passing, we managed to secure premises within the tech incubator CodeBase in Edinburgh.
From our pilot cohort, 8 /9 businesses are still operational. The founder of the 'failure' retrained as a coder and worked for a company in the 2.0 cohort, recycling his knowledge. A challenge failed on 2.0 and we worked with the challenge sponsor to ensure a successful IP transfer. As a result we altered the legals for 3.0 to take this eventuality into account.
All learnings are captured and transfered through regular retrospectives.
Conditions for Success
Strong leadership from the Director Generals. Acceptance that with innovation comes failure.
Get a mixture of people around the table - public / entrepreneurial / third sectors / academia.
Allow procurement rules (as opposed to laws) to be more flexible.
Push on citizen engagement and interaction.
Immerse public servants in entrepreneurial environments, not just send them on training courses.
Ringfence a small budget and give operational freedom to experiment
Increasingly we are being asked by governments and public sector organisations both within the UK and around the world about implementing either identical or similar programmes. As a result, we have set up the The CivTech Academy - a structured, comprehensive programme by which the overall methodology and ethos of the CivTech Programme can be passed on to partner organisations. The methodology includes the infrastructure, systems and operating principles that need to be put into place, and the knowledge and knowhow required to successfully operate them.
We are regularly visited by foreign governments. Over the summer we had deep immersions by the Victorian State Government, Australia and the Polish Government’s GovTech team.
On the 1st October 2018 CivVic Labs (civvic.org.au) was launched in Melbourne. The preceding year’s collaboration prompted the Premier of Victoria to write to the First Minister of Scotland “inspired” by CivTech. The letter is attached.
1. Have a compelling mission that people can get behind.
2. Team culture - Underpinning our team is an entrepreneurial culture - the persistence to move forward, resilience to take the flak and urgency to get results.
3. Start today to get lessons tomorrow even if things aren’t perfectly in place.
4. Prepare for failure - it will come - just capture the lessons learnt and act on them.
5. Challenge sponsors need to be sufficiently seeking, curious and daring to try new ways of procurement and delivery and crucially, prepared to spend time to articulate the problem, not predict the solution.
6. Run in cohorts with set fast-moving timescales. This enables comparable shared concurrent learnings, and if a challenge drops or a company fails, there are still sufficient numbers to make it a success - particularly important when trialling new processes, lest a linear single ‘failure’ kybosh appetite and revert the organisation to back to conventional ways.
7. The value of a cohort is multiplied by utilising a colocation collaboration space - this enables the cross-pollination of tech, skills and expertise, not just amongst the companies but also amongst the challenge sponsors.
8. You aren’t going to create public entrepreneurs simply by following an innovative process – but you might just tilt public servants towards that mindset by immersing them in an entrepreneurial environment over six months.
9. Understand the law before you obey the rule/perceived wisdom. The law is often flexible, but we put around it rules that make the execution inflexible and the guidance bears no resemblance to the legislation.
10. Bring together public, private, third sectors, academia, investors and citizen groups where everyone plays a part in a curated manner. Blending these sectors within a studio creates an energy around the delivery of product that is rarely seen in policy making.
11. Put evaluation methodologies in at the start.
“I am so inspired by what I have seen at CivTech. It is truly transformative. It has changed the mindset within procurement and I want to evangelise for this kind of work across the Scottish Government and our agencies. It is a game changer and is disrupting public sector ways of working in the way digital is disrupting the private sector. It is transformative to the point where I want us to revisit our systems to make sure this kind of project can flourish."
Derek Mackay MSP, Cabinet Secretary for Finance, Economy and Fair Work,
“I was really inspired when I heard about CivTech, because I saw your agenda doing two things. One is driving innovation within, not just through, the public sector - being daring, being willing to take risks, being willing to invest in your explorative capacity. And the second is really using the power of the digital revolution to improve public services."
Professor Mariana Muzzacato, Director of the UCL Institute for Innovation & Public Purpose