EUROPEAN DIGITAL INNOVATION HUBS ROLE IN DIGITAL TRANSITION
EDIH Role and importance
European Digital Innovation Hubs (EDIHs) play a crucial role in driving digital transformation across Europe. EDIHs stimulate the spread of artificial intelligence, the implementation of cybersecurity aspects and the use of highperformance computing and other current digital technologies. They operate both at local and regional level and in a European network with other EDIHs and other relevant initiatives. With the establishment of a network of currently over 150 EDIHs across Europe, funded by the DIGITAL Europe programme, the European Commission is working with the member states and candidate countries states to support the goal of digital transformation.
Here are some key reasons why they are important:1
a. Support for Businesses and Public Sector: EDIHs act as one-stop shops that help companies and public sector organizations tackle digital challenges and become more competitive. They provide access to technical expertise, testing facilities, and innovation services.
b. Digital Transformation: EDIHs assist businesses in improving their processes, products, and services through digital technologies. This includes offering guidance on financing, training, and skills development.
c. Building Digital Capacities: The core mission of EDIHs is to enhance the digital capacities of companies and public sector organizations, ensuring they are well-equipped to navigate the digital landscape.
d. Sustainability and Circularity: They help companies address environmental issues by promoting the use of digital technologies for sustainability and circularity.
e. Regional and Pan-European Presence: EDIHs combine the benefits of a strong regional presence with the opportunities of a pan-European network. This allows them to provide localized services while also facilitating the exchange of best practices across different regions.
f. Funding and Support: The EDIH network is supported by the European Commission’s Digital Europe Programme, which provides significant funding to build digital capacities. This funding is complemented by national or regional resources.
Overall, EDIHs are essential for fostering innovation, enhancing competitiveness, and ensuring that Europe remains at the forefront of digital advancements.2
1 https://digital-strategy.ec.europa.eu/en/activities/edihs
2 https://european-digital-innovation-hubs.ec.europa.eu/home
EDIHs are the organisations which:
a. have been designated by their country as candidate EDIH,
b. have submitted a proposal to the EU call,
c. have been evaluated above threshold.
In most cases, these hubs have received a grant of the Digital Europe Programme that funds them at 50%, while the other 50% is provided by the Member State. However, Member States can decide to finance hubs through other means (e.g., by using funds from the Recovery and Resilience Facility). A hub will be a “European Digital Innovation Hub” as long as it meets the three conditions above.
The catalogue on the Europe-wide network/catalogue3 of EDIHs also includes other Digital Innovation Hubs (DIHs), which are based on self-declarations, and are one-stop-shops that help companies or public administration to become more competitive.
Mapping good examples in Austria and Croatia
IN AUSTRIA THERE ARE FOUR EDIHS:
Applied-CPS4 - Applied Cyber-Physical Systems - Sensors, system integration, digital twin, blockchain for SMEs in the mobility, construction and production sectors
Crowd in Motion5 – Crowd Technology, Motion Data Science and Digital Fabrication for Tourism, Sports and Public Organisations
EDIH innovATE6 - European Digital Innovation Hub for Agrifood, Timber and Energy focussing on Artificial Intelligence and Digital Skills for the public sector and companies
AI5production7 - AI-driven digital transformation of SMEs towards Industry 5.0 production processes plus cybersecurity, robotics, human-computer interaction, additive manufacturing / 3D printing
3 https://european-digital-innovation-hubs.ec.europa.eu/edih-catalogue
4 https://www.applied-cps.at/
5 https://www.dih-innovate.at/
6 https://www.dih-innovate.at/
7 https://ai5production.at/
IN CROATIA THERE ARE ALSO FOUR 4 EDIHS:
EDIH Adria, Rijeka: https://www.edihadria.eu/
The EDIH Adria consortium consists of global technology leaders (Ericsson Nikola Tesla d.d. and Infobip d.o.o.), two scientific research institutions (University of Rijeka and University of Pula), an entrepreneurial support institution (STEP RI Science and Technology Park of the University of Rijeka) and a technology and innovation cluster (Smart RI d.o.o. https://smart-ri.hr/sto-je-urbani-laboratorij/)
Consortium members bring to the project their accumulated experience and experts of different profiles who will direct their skills and knowledge towards solving the challenges of service users. In addition to the necessary experts, we also have the necessary equipment and laboratories that will be used for the purpose of testing new products and services that our customers have developed or are planning to develop.
EDIH CROBOHUB++, Zagreb: https://www.icent.hr/en/project/edih-crobohub/
European Digital Innovation Hub EDIH CROBOHUB++ is an innovation ecosystem of excellence specialized in three key areas of the Digital Europe Program (DEP): (1) Artificial intelligence, (2) Cybersecurity, (3) High-performance computing. The goal of the project is to increase the competitiveness of the Croatian economy by providing free-of-charge services to small and medium-sized enterprises and the public sector with the aim of raising the level of digital maturity and green transformation, so that service users become more agile and efficient.
The project will offer a coherent package of services with a focus on following sectors: (1) Manufacturing industry, (2) Digitized agriculture, (3) Energy and environment and (4) Public sector. EDIH CROBOHUB++ will be a non-for-profit hub primarily acting in continental Croatia, but also with a national scope.
AI and Gaming EDIH, Sisak: https://inkubator-pismo.eu/digital-innovation-hub/
AI4HEALTH.Cro EDIH, Zagreb: https://ai4healthcro.eu/
Mapping of Digital Innovation hubs and technology parks in Western Balkan 6 and Moldova
One mapping on DIH in the Western Balkan was completed by RCC in 2021, „RCC Mapping of Digital Innovation Hubs and identification of needs within Western Balkans and of prospective regional cooperation actions“, Oct 20218
To advance the visibility and outreach of DIHs, several steps are recommended. First, expand and consolidate knowledge about DIHs into a Central Information Portal for the entire Western Balkans. This should include a framework for digital transformation with DIHs as central actors, engaging stakeholders such as local governments, industry associations, and incubators. Additionally, establishing national and regional DIH networks will facilitate peer-to-peer learning and promote collaboration with EU DIHs. Ensuring high-level political support and leveraging EU funding programs like Horizon
8 RCC MAPPING OF DIGITAL INNOVATION HUBS and identification of needs within Western Balkans and of prospective regional cooperation actions, Oct 2021 (https://www.rcc.int/download/docs/Mapping%20of%20digital%20innovation%20hubs_final.pdf/ b2d3533b3dd44bb5630121ad3640999b.pdf)
Europe and the Digital Europe Programme are crucial. Policymakers should focus on the unique needs of each economy, particularly the SME sector, to foster a conducive environment for digital innovation and transformation.
Based on desktop research and input from the NALAS Digitalization Working Group members, the current status of digital innovation hubs in Moldova and the Western Balkans has been compiled. The findings highlight the diversity and varying levels of understanding and implementation of Digital Innovation Hubs (DIHs) across these regions. There are no EDIH in WB6 and but many active initiatives and Digital Innovation Hubs with strong ambitions to be accredited and listed as European.
SERBIA
Serbia hosts several innovation hubs, science and technology parks, and start-up incubators. Serbia’s growing ecosystem of innovation hubs and start-up support organizations works closely with national and local governments to drive entrepreneurship and technological development across the country.
Serbia has four established science and technology parks in BeLocal Government rade, Novi Sad, Niš, and Čačak. These parks provide an ecosystem for product development, mentorship, and investment. The European Bank for Reconstruction and Development (EBRD) is lending €80 million to Serbia to expand existing parks and build new ones in Niš, Čačak, Kruševac, and BeLocal Government rade, offering vital business infrastructure for innovative startups and SMEs across the country.9
y BeLocal Government rade: https://ntpark.rs/
y Novi Sad https://ntpns.rs/
y Nis: https://ntp.rs/
y Čačak: https://www.ntpcacak.rs/
Startup Incubators
The Business Technology Incubator of Technical Faculties BeLocal Government rade (BITF)10 supports early-stage startups, focusing on teams in the ideation phase across various sectors. Impact Hub BeLocal Government rade, a coworking space and community center, aids entrepreneurs and organizations aiming to make a positive impact through hackathons, workshops, and networking events.
Some other notable innovation hubs, accelerators and incubators in Serbia include:
y Impact Hub BeLocal Government rade https://beLocal Government rade.impacthub.net/
y GIST Network https://www.gistnetwork.org/
9 https://innovations.serbiacreates.rs/#engineeringexcellence
10 https://ntpark.rs/en/incubator/
y BioSense Institute Novi Sad http://biosense.rs/
y BRH BeLocal Government rade Robotics Hub http://robot.etf.rs/index.php/brh-services/
y Centre for the Fourth Industrial Revolution in Serbia https://c4ir.rs/en/home/
y EU project for innovations in Sebia: https://eit.europa.eu/news-events/news/boosting-innovation-serbia
y USAID project in Serbia: https://www.usaid.gov/sites/default/files/2023-06/Serbia%20Innovates%20fact%20sheet.pdf
Government Support
The Ministry of Science, Technological Development, and Innovation11 oversees science and technology park projects in partnership with the EBRD. Prime Minister emphasizes investing in young, educated, and innovative people, particularly outside BeLocal Government rade, to support regional development and entrepreneurship. The Serbia Innovates project aims to strengthen the economy by developing innovations within industry superclusters, involving stakeholders from academia, entrepreneurship, government, and associations.
MONTENEGRO
y EIT Community RIS Hub.https://eit-ris.eu/the-european-institute-of-innovation-and-technology-launches-newhub-in-montenegro/ - The Regional Innovation Scheme (RIS) is a special EIT programme for regions of the EU and neighbouring countries categorised as ‘emerging’ or ‘moderate’ innovation ecosystems by the European Innovation Scoreboard
y Digital Innovation Hub (DIH) in Kotor12 https://www.eeas.europa.eu/delegations/montenegro/u-kotoru-otvorendigitalni-inovacioni-hub-dih_me?s=225
y Academic / Start up center for innovation:
y Naučno tehnološki park Crne Gore (NTP Crna Gora)/ Science and Technological Park Montenegro, https://ntpark.me/
y Inovaciono Preduzetnicki Centar Tehnopolis /Innovation and Entrepreneurship Centre Tehnopolis, https://tehnopolis.me/
y Kancelarija za digitalne inovacije (DigNest) /Office for digital innovations It is part of the Montenegrin Academic Center for Digital Innovation (MNE Academic DIH), http://www.daih.me/
y National Competence Center Montenegro (NCC Montenegro)13 , https://eurocc.udg.edu.me/, activities based on the use of High Performance Computing (HPC) and Artificial Intelligence (AI) for applications in industrial domains defined by the Smart Specialization Strategy (2019-2024) for Montenegro.
11 https://ntp.rs/en/projekat/naucno-tehnoloski-parkovi-srbije/
12 https://www.kotor.me/me/razvoj-digitalnih-inovacijskih-centara/
13 https://eurocc.udg.edu.me/
ALBANIA
y AlbaniaTech https://albaniatech.org/ecosystem-maps/
AlbaniaTech.org is a comprehensive platform designed to support the entrepreneurship ecosystem throughout Albania by providing access to critical information, tools, and connections with key players and communities. The platform serves as an informative hub about the Albanian Start-up and Innovation Ecosystem, showcasing its actors, their offerings, and success stories. It brings together the Albanian start-up community, strengthening innovation capacity among ecosystem actors, and fostering both local and international linkages. Additionally, AlbaniaTech aims to support policymaking institutions, such as government bodies, NGOs, universities, and investor associations, by promoting the Albanian entrepreneurial scene to foreign investors.
AlbaniaTech.org caters to a diverse audience: aspiring entrepreneurs, startups, ISO-s, government entities, and investors. It provides relevant information for those interested in entrepreneurship, a platform for start-up’s to present their businesses and connect with others, and a space for ISO-s to showcase their programs. The government can use the platform to disseminate information pertinent to start-up’s, while investors can gain insights into Albania’s investment ecosystem and promising start-up’s. Additionally, the platform highlights success stories to inspire potential entrepreneurs and connects various local ecosystems in Albania.
Internationally, AlbaniaTech lowers barriers for start-up’s, investors, and accelerators to engage with the Albanian market, benefiting the ecosystem through increased global interaction. The platform functions as a database of startup companies, active entrepreneurs, supportive programs, and various national and regional mentorship, training, and incubation programs. It supports information exchange, expertise sharing, and the organization of offline events such as meetups, workshops, and conferences. Developed with the support of EU for Innovation, AlbaniaTech addresses the previous lack of centralized information, enhancing visibility and cooperation within the Albanian startup ecosystem.
Local level Incubators
According to the research made by Angel-Investor review „Albania on its way as a regional innovation hub of Western Balkans“.14 Some initiatives include:
y Tirana Inc. Initiative https://tirana-inc.al/
Tirana Inc. is a multi-university start-up incubator in Tirana, that is powered and implemented by the EU for Innovation and Preneurz.Amsterdam15 in partnership with the City of Tirana. It aims to open doors for ambitious student teams with great business ideas and become the first destination for the new generation of entrepreneurs to start their companies. The founding universities of this initiative are the University of Tirana, University Metropolitan Tirana, POLIS University, EPOKA University, and the Polytechnic University of Tirana.
y Innovation Hub Gjirokaster https://argjiro-innovationhub.eu/
y Uplift Accelerator https://uplift.al/
14 https://angel-investor.review/albania-on-its-way-as-a-regional-innovation-hub-of-western-balkans/
15 https://www.preneurz.amsterdam/entrepreneurial-university-albania-tyrana-inc
Uplift is an early-stage start-up accelerator program focused on growing businesses and increasing valuations. It is designed to support dozens of the most innovative and promising start-up’s from the Balkans region, helping them learn how to pitch to investors, protect their intellectual property, improve their business models, and apply lean methodology.
y Ivanaj Foundation’s Business Incubation & Innovation Hub (BIIH) https://ivanaj-foundations.org/business-incubation-inovation-hub/
The BIIH offers a variety of services to support, train, and guide budding entrepreneurs, including a 60-hour acceleration program of trainings, workshops, coaching, and mentoring sessions. This program is implemented at POLIS University with the support of the EU for Innovation Albania, SIDA, GIZ, and European experts. These initiatives demonstrate the growing ecosystem of innovation hubs, accelerators, and incubators in Albania that are closely partnering with the local government and international organizations to support entrepreneurship and startup growth.
y Yunus Social Business (Albania) Balkans
This is a funding program that financially and technically supports young people who want to implement social business ideas. Participants must successfully pass the first stage of application, and their social ideas are then discussed and mentored by professionals in the field.
BOSNIA AND HERZEGOVINA
Innovation Hubs and Technology Parks
Digital Innovation Hubs (DIHs): Four DIHs have been established in Bosnia and Herzegovina, supported by the EU Digital Europe Programme. These hubs aim to assist small and medium-sized enterprises (SMEs) in their digital transformation and provide resources for enhancing their market presence. The government has recognized the need for an enabling environment for SMEs and has initiated policies aimed at fostering digital transformation and innovation. Challenges remain in better coordination among different government levels and more efficient financial support mechanisms for SMEs, as well as creating ecosystems that will support the government implementation of IT technology and solutions.
y Sarajevo Innovation and Technology Park: This initiative in the planning stages, with recently presented preliminary feasibility study. The project aims to enhance the existing innovation ecosystem by fostering cooperation among academia, industry, and public sectors. It is supported by the UNDP16 and aims to create a collaborative environment for startups and SMEs in Sarajevo.
y Science and Technology Park Banja Luka: This park focuses on supporting innovation and technology transfer, promoting entrepreneurship, and linking local businesses to global markets. It serves as a hub for research and development, providing essential resources to startups and SMEs.17
y Digital Innovation Hub (DIH) IDEMO (Innovation Digitalization Enabling Meso Organization) https://dihidemo. org/en/home/, consists of the Innovation Center Banja Luka https://icbl.ba/, the Chamber of Commerce of the
16 https://www.undp.org/bosnia-herzegovina/press-releases/undp-supports-building-countrys-digital-innovation-and-entrepreneurship-ecosystem
17 https://unibl.org/en/news/2023/09/agreement-on-establishment-of-the-science-and-technology-park-of-the-republic-of-srpska
Republic of Srpska, the Development Agency of the Republic of Srpska, the Faculty of Electrical Engineering Banja Luka and the Agency for Enterprise Development EDA. The lead applicant is the Innovation Center Banja Luka The goal of the IDEMO Digital Innovation Hub is to provide small and medium-sized enterprises with professional support in the process of digital transformation, which is based on networking and encouraging cooperation between small and medium-sized enterprises, service providers from the ICT sector and educational institutions. The DIH IDEMO project is funded by the EU4DigitalSME18 Project, jointly funded by the European Union and the Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany (BMZ), aimed at establishing and supporting the development of Digital Innovation Hubs (DIH) in Bosnia and Herzegovina. The project is implemented by the German Organization for International Cooperation (GIZ).
y Bit Alliance https://bit-alliance.ba/ - Leading association of the largest IT companies in B&H which have been united since 2014 under BIT Alliance, the head organisation of IT industry in B&H. The goal is to develop more opportunities at the IT industry market, overcoming obstacles influencing and slowing down the growth. In order to develop positive business environment for further growth of B&H IT industry, BIT Alliance continuously works on resolving two biggest issues that IT companies are experiencing every day – the lack of highly skilled employees and poorly developed IT industry infrastructure, accompanied with lack of development incentives.
y Innovation centar Banja Luka (ICBL) https://icbl.ba/ is a center for the support and development of entrepreneurship in the Republic of Srpska, firmly committed to supporting the development of enterprises based on knowledge and the application of innovative and advanced technologies.
y Start-up Studio Banja Luka https://startupstudio.ba/ supports services which are tailored to each individual and startup in different stages of development. They include consulting on the development of startups that support the Sustainable Development Goals (SDGs), managing the development of technological innovations, legal services, finance, business operations development, marketing and sales, and occasionally includes external mentors who are hired to solve a specific problem.
Some other notable innovation hubs and incubators in Bosnia and Hercegovina include:
y DIH ONEX, Banja Luka, https://onex.digital/en/edih
y Inovacioni centar Trebinje https://ipctrebinje.com/
y Intera Tehnološki Park Mostar https://intera.ba/
y Incor - Inovacioni centar za održivi razvoj Bijeljina https://www.facebook.com/InCORBijeljina
y Prijedor Circle Hub https://startup.prijedorhub.com
y HUB 078 Gradiška https://raga.ba/
18 https://www.eeas.europa.eu/delegations/bosnia-and-herzegovina/bosnia-and-herzegovina-joining-eu-digital-europe-programme_en?s=219
NORTH MACEDONIA
There are several innovation hubs, technology parks, and incubators in North Macedonia that collaborate with the government on local and central level:
y INNOFEIT Center for Technology Transfer and Innovation – Skopje - https://inno.feit.ukim.edu.mk/
INNOFEIT is positioned within the Ss. Cyril and Methodius University in Skopje, Faculty of Electrical Engineering and Information Technologies. It was launched by the European Institute of Innovation and Technology (EIT) as the first joint innovation hub in Skopje. With this Hub, the university is showing its readines to contribute its scientific and research potential to support the implementation of North Macedonia’s Smart Specialization Strategy, which focuses on areas like smart cities, smart agriculture, ICT, Industry 4.0, sustainable materials and others. North Macedonia. The hub aims to strengthen cooperation among leading business, education and research organizations while increasing the region’s competitiveness and sustainable economic growth. It is part of the EIT Regional Innovation Scheme (EIT RIS) program designed to tackle Europe’s innovation divide19 .
y SEEU Tech Park – Tetovo - https://techpark.seeu.edu.mk/
SEEU Tech Park is a technology park located at the South East European University in Tetovo. It focuses on fostering innovation and entrepreneurship through various initiatives such as the Entrepreneurship Education Conference, ICT and Innovation Conference, and the Social Entrepreneurship project addressing youth unemployment. Its primary aim is to cultivate an environment that stimulates the birth of new startup companies, establishing a seamless synergy between these ventures and nurturing the growth of existing SMEs.
Some other notable innovation hubs and incubators in North Macedonia include:
y Kasarna Hub – Ohrid, https://kasarna.net
y Get Innovation – Bitola, https://getinnovation.eu/
y Netaville
These hubs provide co-working spaces, host events, workshops, and networking sessions to foster innovation and entrepreneurship in the country.
19 https://eit.europa.eu/news-events/news/eit-launches-innovation-hub-north-macedonia
KOSOVO
Kosovo hosts several innovation hubs, technology parks, and incubators that collaborate with the government. The government, through ministries such as the Ministry of Industry, Entrepreneurship and Trade, the Ministry of Innovation and Entrepreneurship, the Ministry of Trade and Industry, and the Ministry of Economic Development, supports innovation hubs and tech parks to promote entrepreneurship, ICT adoption, e-commerce, and economic development driven by innovation and technology in Kosovo.
y Innovation Centre Kosovo (ICK) https://ickosovo.com/
ICK is the premier hub for youth, startups, and innovative businesses, driving economic growth, youth employability, and innovation in Kosovo. It provides incubator services, mentoring, consulting, and training to entrepreneurs, freelancers, students, public servants, managers, and civil society. Areas of focus include business planning, accounting, finance, product and service development, marketing, human resources, technology development, programming, graphic design, animation, multimedia, cyber security, and networking with local, regional, and international businesses.
y Tech Park Prishtina techpark-prishtina.com
Tech Park Prishtina, the first of its kind in Kosovo, was inaugurated in 2023 in the village of Bërnicë, Prishtina. The 4,000 square meter facility includes offices, meeting rooms, training rooms, common workspaces, and entertainment areas20 Funded with 1.2 million euros by the Government of Kosovo through the Ministry of Economy, the park aims to foster technological innovation, economic growth, job creation, foreign investment, education, and talent development.
y Swiss Innovation Hub https://swiss-innovation-hub.com/
The Swiss Innovation Hub links Swiss businesses with talented developers in Kosovo, creating a nearshoring hub for software development in Prishtina. They establish dedicated remote software development teams for Swiss companies and manage payroll and other administrative tasks.
y UBT Innovation and Technology Hubs https://hubs.ubt-uni.net/
UBT is successfully pursuing the major project of establishing innovation and technology centers, as the most promising and serious investment for the future of the new generation.
20 https://prishtinainsight.com/first-technology-park-opens-in-prishtina-expected-to-stimulate-innovation/
MOLDOVA
Major Innovation Hubs and Technology Parks in Moldova
y Moldova IT Park http://moldovaitpark.md/
Established in 2018, the Moldova IT Park21 is a government initiative aimed at fostering the growth of the IT sector through a simplified taxation model (a flat tax of 7%) and a virtual operating regime. This park supports various IT-related activities, including software development and research, and facilitates interaction with public authorities at central and local level. It is managed by a dedicated administration appointed by the government, ensuring alignment with national economic goals.
y Inotek Innovation Centre https://inotek.md/
The Inotek Innovation Centre aims to enhance Moldova’s digital economy and skills development. It serves as a collaborative space for startups and innovators, providing access to resources and training necessary for growth in the digital sector. This initiative is part of broader EU efforts and EU4Digital Programm22 to support entrepreneurship and innovation in Moldova.
y ZIPHOUSE Fashion Innovation Hub https://ziphouse.utm.md/
Located within the Technical University of Moldova, the Design and Technology Excellence Center “ZIPhouse” was created within the Technical University of Moldova in September 2015, through a public-private partnership between the Ministry of Education, the Technical University of Moldova and Light Industry Employer’s Association of Moldova (APIUS), with the support of the United States Agency for International Development (USAID). This hub focuses on the fashion industry, providing resources for young designers and startups. It offers an acceleration program, community-building activities, and educational initiatives, thus contributing to the local economy and innovation landscape.
21 https://mded.gov.md/en/domains/information-technology-and-digitisation/information-technology-it/moldova-it-park
22 https://eufordigital.eu/new-inotek-innovation-centre-will-develop-moldovas-digital-economy-and-skills/
GOVTECH FOR LOCAL GOVERNMENTS
“GOVTECH HELPS GOVERNMENT TO WORK MORE EFFECTIVELY AND EFFICIENTLY, WHILE DELIVERING SERVICES TO CITIZENS IN NEW AND MORE INNOVATIVE WAYS.”
Christian Rupp
GOVTECH Role and importance
GovTech refers to technology-driven innovative solutions that improve public sector efficiency, transparency, and service delivery. Collaborating with GovTech startups and ecosystems enables local governments to modernize governance models thus having a crucial role in driving digital transformation and innovation across Europe.
The term GovTech also refers to the use of emerging technologies and digital products and services by government from start-ups and SMEs - instead of relying on large system integrators. There are many - oftentimes competing - definitions of the term GovTech. Despite this diversity, most definitions share the following three common elements:
y the public sector engages with start-ups and SMEs to procure innovative technology solutions,
y for the provision of tech-based products and services,
y in order to innovate and improve public services.
Here are some key reasons why GovTech is important:
1. GovTech usually refers to public-private partnerships, with governments working with the technology sector to deliver goods and services. As such, public procurement and contracting is a central dimension of GovTech.
2. GovTech has the same focus on usability, user experience and design as modern platforms, apps and systems in consumer sectors. Just like modern streaming services, delivery apps, or marketplaces, GovTech services feel ‘modern’ and carefully designed.
3. GovTech usually refers to innovative and emerging technologies, such as AI, blockchain, computer vision, IoT and sensors: with the majority of GovTech companies having a software platform as part of their service offering. GovTech also has a defined set of operating and business models, as well as technologies supporting them. This includes Lean, Agile and iterative development as common methodologies and frameworks, as well as SaaS and license-based business models.
4. GovTech is largely driven by partnerships with startups and scaleups, including through ‘ecosystem’ approaches with corporates and academia. This reflects a broader trend in how technology innovation is being driven in private consumer and enterprise sectors. Just as startups and scaleups (and investors) have driven innovation and investment in sectors such as FinTech, entertainment and e-commerce, they will be at the centre of the next generation of public services.
“GOVTECH
IS A WHOLE-OF-GOVERNMENT APPROACH TO PUBLIC SECTOR MODERNIZATION THAT PROMOTES SIMPLE, EFFICIENT, AND TRANSPARENT GOVERNMENT, WITH CITIZENS AT THE CENTER OF REFORMS.”
The World Bank
GovTech, as the targeted and systematic cooperation of the administration with innovative companies and start-ups, represents a promising opportunity to learn about future-proof solutions, to test them more quickly and to check their suitability and usability.
The cooperation of these different actors is based on the tension between the culture of the public administration on the one hand and the agile start-up culture on the other. Creating so-called “adaptive spaces” in which actors from both worlds can interact with each other is a key success factor for implementing GovTech and successfully bringing together different cultures.
GovTech describes the targeted and systematic cooperation between the public administration and innovative actors to make new digital technologies quickly and scalably usable for the state. In this cooperation, however, two different cultures inevitably clash, which at first glance seem incompatible. Start-ups act quickly and agilely, whereas public authorities act after thorough examination, reliably and properly. Successful cooperation between start-ups and the public administration is therefore based on bringing the different organisational cultures of the two sides closer together and creating mutual understanding.
Let’s contrast the two cultures and try to derive recommendations for action for closer and successful cooperation.
Agile start-ups with a culture of error - courage to try things out - fail early and often
Start-ups are characterised by a special innovation culture that enables them to quickly develop and test new digital solutions and entire business models. The essence of such an innovation culture is a special focus on the exploration of new ideas. Since this search for new solutions is characterised by a high degree of uncertainty, a number of different practices have become established in the startup ecosystem, all of which aim to systematically reduce risks. The general approach of start-ups is characterised by the repeated formulation and rapid testing of hypotheses. Prototypes are developed and discarded as quickly as possible in order to test key aspects of a new product, thus gradually reducing uncertainties. Such a strategy of iterative “prototyping and testing” needs a special error culture that allows learning from failures and rewards taking calculated risks. It also requires a special climate of psychological safety that allows organisational members to take individual risks in their daily work.
Interative approach user-oriented exploraion culture of errors empowerment agility
Public Administration
Formal processes zero error culture formal responsibilities strong legal framevork defensove communication
Such a culture of innovation is influenced to a not inconsiderable degree by the behavior of superiors and often by the founders themselves. Leadership of start-ups is particularly characterised by granting freedom and enabling explorative behavior (empowerment). Such leadership does not so much control the fulfilment of tasks, but enables decentralised decision-making through the clear communication of a central vision and mission as points of orientation.
Administrative culture - bureaucratic, thorough, inflexible:
Public administration, on the other hand, is not focused on the discovery and development of new business models, but on the reliable and proper fulfilment of its legal mandate. Against the backdrop of this core task, the administrative culture is characterised above all by the bureaucracy principle, which includes division of labour, official hierarchy, technical supervision and file regularity. This is intended to ensure the rationality and efficiency of the administration and to prevent arbitrariness and corruption. Against this background, the culture of the administration is characterised by a narrow legal framework and rigid formal processes, which increase the ability to plan and reduce uncertainty. However, this also leads to increasing cultural inertia, which limits the administration’s adaptability and ability to act, especially when cases do not meet the standard.
Furthermore, the principle of division of labour leads to thinking in terms of departmental responsibilities. The creation of silos is the logical consequence. Administrative action results from formal responsibility rather than from staff proactively taking responsibility for a topic or task. Within departments and units, there are complex coordination and decisionmaking processes designed to build consensus.
Another cultural element of the administrative culture is its hierarchical structure, which includes top-down management and control of processes and tasks on the one hand and reporting of staff to the next higher level on the other. Such hierarchical control, which primarily serves to monitor the proper performance of tasks by employees, does not establish a culture of error. Rather, it results in a strong focus on error prevention. Overall, the culture of the administration is therefore often characterised by a high degree of hedging thinking and rather defensive communication patterns.
This description makes it clear that these two cultures only fit together with difficulty. This tension becomes immediately apparent when start-ups and the administration cooperate with each other. For start-ups, the lengthy processes of the administration are often a problem, as these make potential investors shy away on the one hand, and on the other hand, long-term guarantees or special requirements (especially in tenders) that young start-ups in particular are not yet able to give. For the public administration, cooperation with start-ups can trigger fears, as dealing with uncertainty is fundamentally different from focusing on reliability and security.
Interface between innovation and organisational hierarchy - adaptive spaces:
In order to navigate this field of tension, public administration is recommended to create so-called adaptive spaces. These are social contexts in which both cultures can meet and mix on an equal footing. Such spaces can be created through workshops or established with institutions. In adaptive spaces, administrative employees are offered the opportunity to actively participate and adapt existing processes and structures with the help of GovTech solutions.
When actors from the administration and the start-up scene come together, not only are GovTech projects, but also to get to know each other’s way of thinking and working methods of their counterparts. This can lead to different problem areas, such as new forms of leadership, a culture of learning and culture or agile working methods, deep dives and design sprints can be carried
out. The adaptive spaces are not bound to physical locations, but can also take place virtually with suitable tools.
Like the GovTech Campus in Germany23, initiated jointly by the federal government, the federal states and actors from the tech scene, research/science and civil society. The first campus site was open in 2021 in Berlin-Mitte. Office space, cocreation/learning areas for administrations, start-ups, civil society, research organisations or tech companies complement each other with state-of-the-art event and seminar rooms and are available to members and residents. Further four locations in the federal states, offer an inspiring environment that intelligently combines working worlds and brings together sectors, technologies, knowledge and implementation skills.
The great opportunity of GovTech is to bring the innovative power of start-ups into the world of public administration. Central to GovTech is the approach of developing an innovative solution for a large number of public organisations with similar framework conditions and processes - not just for one. The benefits of GovTech can thus be scaled very quickly and made available to a broad mass of users. Three key enablers need to be in place:
Public procurement
Funding
Creating a sovereign cloud ecosystem
Removing hurdles in awarding public contracts to GovTech start-ups.
y Long payment terms in the public sector: these are problematic for collaboration between start-ups and the public sector, as start-ups need to generate revenue in a timely manner. For example, start-ups cite the length of the purchasing process in Germany as the biggest hurdle to collaboration, at 82 per cent.
y Deeply rooted hedging thinking and a pronounced risk aversion: the culture in the public sector often stands in the way of collaboration with agile and innovative start-ups. For 87 percent of the start-ups, the decision-making processes and reaction times are too slow, while 61 percent of the start-ups cite differences in mentality as hurdles to cooperation.
y The awarding process, starting with the content of the tender: If a public organisation has a challenge, a specific service is usually put out to tender. As a result, it is often not the best solution for the required service that wins the tender, but the best provider for the described service. This happens regardless of how well the solution is suited to solving the challenge. For start-ups, public tenders are too time-consuming (61 percent) and too complex (58.5 percent).
y Formal requirements in the tendering process: These are often a hurdle, as they are partly impossible for start-ups to fulfil. These include, for example, required proof of customer relationships over several years, annual financial statements or a minimum length of time the company has been in existence. References, which are required in the tender process, are a hurdle for 58 percent of the start-ups.
y To resolve this situation, innovative, solution-oriented procurement options are needed. These can be, for example, innovation partnerships between the public sector and start-ups that help to reduce the hurdles in awarding contracts. They can be solutions such as the experimental clauses already introduced in Germany (North RhineWestphalia and Schleswig-Holstein), among others. These clauses make it possible to make exceptions to formal requirements. They can thus serve as door openers for cooperation between start-ups and the public sector. However, so-called challenges can also be used for tendering. These are tenders tailored to specific problems that enable start-ups to find innovative solutions to a specific public administration problem.
GovTech can only be successful in an innovation-friendly framework that sensitises actors to the challenges of public administration
Of the countries studied, many have state-organised start-up support with the aim of creating a suitable investment environment. In most countries, this is not oriented towards the special requirements in the GovTech environment with its public clients. A successful exception is Israel, which explicitly addresses GovTech start-ups with the Israel Innovation Authority24. Virtually all of the countries studied rely on private-sector actors for administrative digitisation. The overview shows: The more start-up-friendly a country is and the more of an ecosystem it has, the more likely it is that the innovation potential will spill over into the GovTech sector. This manifest itself through GovTech institutions or incubators. Many countries have already created institutions or platforms that serve as incubators or accelerators for GovTech start-ups. They bring the public administration into exchange with idea providers or existing start-ups that have not yet had contact with GovTech solutions.
24 https://innovationisrael.org.il/en/program/Gov-Tech
Examples are the Catalogue GovTech from France25, the GovTech Lab from Lithuania26, GovTech in UK27 or GovTech NL28 , but also the GovTech Campus in Germany.
Europe displays a wide array of GovTech initiatives.29 Other European GovTech Programmes: GovTech Program Denmark30, GovTech Labs Luxembourg31, GovTech Polska32, CivTech Scotland33
Interesting example is also the GovTech Digital Academy in Singapore.34
In addition, there is a need for continued cultural change in the public sector to foster innovation and ownership among employees. A good understanding on the part of start-ups of procurement procedures, culture and technical infrastructure in the public sector is essential. Intermediaries who know and understand both worlds can help mediate and advise between the public sector and start-ups.
Conducting a health check for GovTech start-ups by an independent third party can also be purposeful. This means that a start-up is assessed in terms of financial stability and technical suitability. This reduces the risk for the procuring public organisation and it does not have to carry out the evaluation of the start-up itself. In this way, the start-up can increase its trustworthiness vis-à-vis public organisations.
New competences must be trained in public administration and agile, cross-authority innovation units must be established. This makes people the central success factor for the success of the digital transformation in public administration as well.
An adaptive administrative culture is based on three elements: Empower. Involve. Adapt.
y Empower - Administrative employees must be enabled to pursue new ideas and try out new ways of solving problems. This can be specifically promoted by opening and creating so-called “adaptive spaces”, such as innovation labs. “Adaptive spaces” are virtual or physical environments in which the tension between the culture of public administration and hierarchy on the one hand and an agile culture of innovation on the other is balanced. They create a context that offers new low-hierarchy and playful opportunities for collaboration. In “adaptive spaces”, employees learn new practices and methods that enable them to pursue innovative solutions along the everyday service. A new understanding of leadership that opens up these spaces and enables staff to work in an agile way is an essential component of empowerment.
25 https://catalogue.numerique.gouv.fr/
26 https://govtechlab.lt/
27 https://www.govtech.co.uk/
28 https://www.govtechnl.nl/
29 https://joinup.ec.europa.eu/collection/govtechconnect/catalogue-govtech-initiatives
30 https://digitalhubdenmark.dk/govtech/
31 https://govtechlab.public.lu/en.html
32 https://www.gov.pl/web/govtech-en/misja
33 https://www.civtech.scot/
34 https://www.thedigitalacademy.tech.gov.sg/ and https://www.developer.tech.gov.sg/singapore-government-tech-stack/
y Involve - based on a culture characterised by empowerment and the assumption of personal responsibility, the adaptability of the administration can be specifically promoted. This competence results from the potential of the own employees. It arises “bottom-up”, is distributed decentrally throughout the organisation and thus enables processes to be adapted quickly and flexibly to new circumstances. Agile teams bring new ways of thinking, competences and methods from adaptive spaces into the rest of the organisation.
y Adapt - an adaptive and open administrative culture is characterised by the fact that it promotes the active participation of employees on the one hand and opens up to citizens on the other. In this way, administrative employees are empowered to act in a creative and entrepreneurial way beyond their immediate official tasks. In an open administrative culture, technological solutions are developed together with the users. For this purpose, citizens can also be involved in development processes at an early stage in the sense of co-creation and open innovation.
To realise these three elements, four central fields are identified here that focus on the human dimension and, in combination with new IT tools, enable widespread implementation in the administration:
y Cultural change: Complex organisational cultures cannot be changed by decree. That is why we start with the creation of “adaptive spaces”. These form an interface between an agile innovation culture and the culture of the formal organisational hierarchy and offer, detached from formal structures, the possibility to learn new practices of collaboration. In “adaptive spaces”, new values, behaviours and methods are developed on the basis of concrete projects and brought into line with the existing cultural elements of the administration.
y Human resource strategy: In administrations, human resource needs are often planned too short-term. In view of the rapid technological and social changes as well as the increasing shortage of skilled workers, this is no longer appropriate. AI-based solutions can help derive needs further in advance. They enable a forward-looking identification of missing profiles and competences in order to initiate necessary recruitment and qualification measures in a timely manner.
y Competence development: New technologies such as process automation, agile working methods and a high level of service orientation are changing the required competences of employees in public administration. This increases the need for highly specialised staff. Setting up public administration in a future-oriented and adaptable way is therefore only possible through targeted competence development. The Future Academy approach offers a modular and scalable framework for empowering employees and managers.
y Talent management: Identifying, developing and retaining competent employees in the administration is an essential factor for sustainable cultural change. Public employers need to focus on providing employees with a positive experience along the ‘employee journey’ and meeting their expectations, for example in terms of work-life balance or flexible working time models. Tools such as talent pools, development programmes for future leaders or feedback tools make it possible to establish an agile, transparent and digital administrative culture that values and encourages employees’ own initiative and courage.
Digital transformation is not a one-off task, but an ongoing process in a world characterised by constant change. This requires an adaptive and future-proof administration. A comprehensive cultural change is the engine for success. At the heart of this change is interdisciplinary and cooperative collaboration that enables active participation, experimentation and innovation in service. Staff in the administration must be empowered to become shapers. Equipped with new skills and through consistent involvement, they will actively develop their environment. This ultimately promotes the adaptive capacity of the public administration to respond quickly and flexibly to challenges and changes.
Excurse
Although existing digital government surveys and indexes are useful for monitoring progress in digital government initiatives and good practices in general, until now no single index had captured progress in all key GovTech areas based on a reliable global data set. The World Bank GovTech Maturity Index (GTMI)35 was developed to address this gap. The GTMI measures the key aspects of four GovTech focus areas—supporting core government systems, enhancing service delivery, mainstreaming citizen engagement, and fostering GovTech enablers—and assists practitioners in the design of new digital transformation projects. The GTMI was constructed based primarily on the World Bank’s GovTech data set.36
Overview of GovTech maturity, 2020
GTMI Very high - GovTech leaders: e.g. Austria; Croatia; Slovenia
GTMI High - significant focus on GovTec: Albania; Moldova; Montenegro; North Macedonia; Serbia
GTMI Medium - some focus on GovTech: e.g. Bosnia and Herzegovina; Kosovo
The GTMI is a composite index based on 48 key indicators defined to collect data from 198 economies in four categories: the Core Government Systems Index (CGSI), based on 15 indicators; the Public Service Delivery Index (PSDI), based on 6 composite indicators; the Citizen Engagement Index (CEI), based on 12 indicators; and the GovTech Enablers Index (GTEI), based on 15 indicators.
35 The World Bank GovTech Maturity Index: The State of Public Sector Digital Transformation, this report was financed by the GovTech Global Partnership trust fund, supported by the Governments of the Republic of Austria, the Republic of Korea, and Switzerland. https://openknowledge. worldbank.org/bitstream/handle/10986/36233/9781464817656.pdf
36 https://datacatalog.worldbank.org/search/dataset/0037889/GovTech-Dataset
FINDINGS AND RECOMMENDATIONS
FINDINGS
There is a significant digital divide between the EU and the Western Balkans and Moldova municipalities, due to lacking access to advanced digital infrastructure, funding, and innovation ecosystems. Innovation in governance is still not considered critical for improving public service delivery, for reducing bureaucratic inefficiencies, and increasing transparency. Local governments in the Western Balkans and Moldova rely on outdated administrative processes without structured frameworks for integrating digital technologies. There is a need for a shift toward innovation-driven decisionmaking and services.
Local governments should align their digital transformation strategies with EU best practices to ensure sustainable development and funding accessibility. Promoting EU programs and funding opportunities for innovation projects is required as municipalities struggle to develop proposals and secure financing. Raising awareness about EU funding programs, such as Digital Europe Programme, Horizon Europe, and EIC Accelerator for GovTech startups, will enable municipalities to secure financial support for their digital initiatives.
Supporting collaboration with EDIHs and GovTech startups is needed to promote innovation in the public sector, encouraging the development of new and improved services for citizens. There is no structured mechanism in the region for municipalities to connect with startups that can provide innovative digital solutions. Without an organized matchmaking system, cities struggle to identify relevant tech solutions that align with their governance challenges.
Public administration in the Western Balkans and Moldova needs structured training on agile working methods, Innovation Procurement, GovTech collaboration, and digital policy implementation. To create a more structured and inclusive capacity development framework, ensuring that digital skills and innovation strategies are aligned across different governance levels cooperation with regional organizations is also important.
Municipalities also often lack structured spaces where local governments, GovTech startups, and Digital Innovation Hubs (DIHs) can collaborate. Without it municipalities miss opportunities to test and scale innovative digital solutions tailored to public sector needs.
Improve the efficiency of administrative procedures and improved legal and regulatory environment is essential to enhance the credibility and governance of Digital Innovation Hubs (DIHs) and GovTech to provide stronger support for digital transformation and innovation at the public level.
Stimulating innovation procurement to incorporate innovative solutions in public institutions is needed. Innovation procurement is naturally interconnected with technology at public institutions, and is seen as an immediate challenge for incorporating innovative solutions into the procurement strategies aimed in development and adoption of modern technologies, support of new services, and promoting a culture of innovation within both the public and private sectors.
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Further support in coordination of innovative digital services provided by the local public sector and replication of knowledge and experiences in the whole NALAS network. Offering test beds in cities and municipalities for SMEs to develop and test solutions can address local challenges—a practice that has been successful in the EU.
Promoting European digital transformation concepts for cities and municipalities by transferring knowledge on partnerships with SME and DIHs is important.
Recommendations for NALAS future activities
Disseminating knowledge on EU concepts, such as tools for technological readiness checks, index of digital maturity at local level – LORDIMAS, minimum Interoperability mechanism MIM, Data Space for Smart communities and Local Digital Twins shall be continued by NALAS and its Working group of Digitalization. Establishing NALAS help desk or office for promoting Digital Europe program and initiatives of the EU for local governments in Western Balkan and Moldova is recommended. It will improve municipal absorption of EU funds, particularly through programs such as Digital Europe, where partnering with SMEs are prioritized and necessary resources to implement GovTech solutions are ensured.
NALAS and its Digitalization Working Group shall focus on promoting EU initiatives, programs, and targets to drive digital transformation with innovative technology solutions developed in collaboration with private companies and startups. This includes fostering connections between Local Government Associations, municipalities, and startups to create local ecosystems that support innovation. By facilitating memorandums of cooperation between Digital Innovation Hubs (DIHs) and Local Government Associations, NALAS can play a pivotal role in enhancing collaboration for innovation.
NALAS shall continue support in EU applications development for innovative municipal projects, ensuring that local governments are informed, knowledgeable and prepared to access and leverage available funding opportunities.
NALAS and its Digitalization Working Group should actively inspire local governments to identify, map, and collaborate with the startup community. Active promotion of good municipal practices from Europe on co-creating solutions tailored to local challenges with GovTech and DIH should continue.
NALAS should organize events with DIHs and startups to further stimulate the creation of adaptive spaces where GovTech startups and local governments can interact, test, and develop digital solutions together. These spaces—whether innovation labs, digital hubs, or living labs—should encourage experimentation and collaboration, following the principles and best practices of EU member states. By fostering structured engagement between municipalities, startups, and innovation hubs, NALAS can help establish local digital ecosystems that drive sustainable and citizen-centric innovation while ensuring local governments are equipped to adopt emerging technologies effectively.
NALAS should develop training sessions for local government leaders focused on fostering innovation and collaborating with startups and academia to co-create solutions. To ensure broad impact, a modular and scalable training framework should be promoted, empowering public administration to adopt digital tools and drive sustainable innovation with local digital ecosystems – Startups, Academia, and Digital Innovation Hubs (DIHs)
NALAS should develop a capacity-building framework focused on digital transformation with innovation. To maximize the impact, collaboration between NALAS and ReSPA should be strengthen for coordination and jointly
organize training programs for all levels of government. This approach will create a more structured and inclusive capacity development framework, ensuring that digital skills and innovation strategies are aligned across different governance levels. Programs should include specialized leadership training for public-private collaboration models, and policy recommendations for innovation-friendly regulations.
NALAS can also create a regional matchmaking platform where municipalities can post digital challenges, and startups can propose solutions. This platform should be complemented with technical assistance programs, innovation forums, and networking events that bring local governments and startups together to collaborate on problem-solving. The platform can also facilitate knowledge transfer between GovTech Hubs and EDIHs in the region, leveraging existing DIHs and establishing new connections through NALAS.
NALAS should facilitate study visits to leading EU cities, enabling municipal leaders to experience GovTech ecosystems first-hand and learn from best practices. Insights gained from these visits should be documented and shared across NALAS member municipalities to inspire policy improvements and accelerate GovTech adoption at the local level.
