A report by venture capital firm, Public, highlights the transformative work of 100 UK start-ups and small businesses. Even amid exhausting levels of bureaucracy, SMEs are radically shaping the public sector.
The ‘State of the UK govtech market’ report brings the government’s aim of increasing its SME procurement spending into sharp focus. It’s abundantly clear that smaller companies offer the kind of disruption that central and local government so desperately need.
Back in 2015, Matt Hancock, Minister of State for Digital, announced a target of sending a third of all procurement spending to SMEs by 2020. Historically, large organisations have dominated account ledgers, but several high-profile failures, such as e-borders and the NHS patient system (£3.6 billion overspend) have wrecked public trust in corporate suppliers.
SMEs are breathing new life into health, policing, service delivery, security and even democracy itself. For example, Ask the Midwife offers a real-time chat interface for anyone looking to discuss issues around pregnancy. It’s staffed by registered midwives and reduces the strain on an overworked NHS.
In the world of policy, Apolitical gives public servants a way to share ideas via case studies and discussion. It’s used by the UK Cabinet Office along with the governments of Australian and the UAE.
And for local regeneration, Spacehive provides a crowdfunding platform that allows citizens to raise funding for civic projects. It’s raised £6.5 million to date across 309 successful pitches. Investment in SMEs goes a long way, as rather than large overheads and running costs, the funds are usually paying for hours and expertise.
In 2014, FutureGov received a sizeable investment from Nesta Impact Investment and Surrey Council (yes, a local council invested in a govtech firm). As a direct result, we could increase the social impact of our existing products, such as Patchwork, and develop further tools for local councils. Nesta Investment has a remit of ‘bringing the benefits of innovation to everyone in society’.
The risk paradox
But despite growing evidence of smaller companies delivering large-scale projects, there’s still a misplaced perception that bigger means safer. Risk-averse procurement committees seem to default to the belief that only large organisations can cope with serious budgets – that it takes an over-engineered process and 2000 staff to indicate maturity.
Size has little to do with outcomes. In fact, large organisations with rigid processes often create the kind of regimen that breeds procrastination and causes more harm than good. When you’re fully focused on ‘not making it worse’, you’re not making it any better either.
An easier way to reduce risk, and save money, is to create small ring-fenced trials that are designed collaboratively with citizens – then scale those that work and learn from those that don’t.
Google and Apple both manage to nurture positive attitudes within their respective corporate environments. But large organisations capable of serious disruption are the exception to the rule. Start-ups and SMEs, when run well, have a better opportunity to create cultures that foster creativity. There’s an inbuilt sense of urgency and a closer proximity to the overall objective.
In a corporate, it’s hard, nigh on impossible, to avoid detachment. Teams tend to work in isolation with their own personal gauge on what constitutes success.Corporate mission statements lack any real buy-in and simply wash over staff that are abstracted from the boardroom.
When you’re part of a small team, you get a sense of working as a collective. To coin a well-worn phrase, you feel like you can actually ‘make a difference’.
Reducing the burden
There’s no doubt that central Government is trying to make it easier for SMEs to get involved and the ‘Open for Business’ campaign is a step in the right direction. Often, the qualification process for a new contract can be so convoluted that it becomes cost-prohibitive to even apply. There are plenty of ways to verify a company’s credibility without creating needless paperwork. So it’s encouraging that one of its main objectives is to remove unnecessary barriers.
Emma Jones, the Small Business Crown Representative, is also looking to speed up government payment times, as waiting more than two months can be seriously damaging. G-Cloud should help in that respect too – once it gains wider adoption.
But aside from improving procedure, both central and local government need to encourage bolder decision-making. Ultimately, it comes down to a group of people making an educated call on whether to retain the status quo or look to shake things up.
So, as a society, let’s try to celebrate success with as much vigour as we highlight high-profile failures. With small businesses already making a real difference to public services, let’s support each other to make even braver decisions.
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