Opening up procurement to drive innovation in local and regional governments
What was our goal?
Pilot 3 set out to tackle a persistent challenge in the public sector: how to bring innovation from startups into public service delivery, and how to do so in a structured, scalable way. Despite their agility and user-centred design, startups and digital SMEs still face major barriers when working with public institutions, mainly due to rigid procurement systems, lack of visibility, and limited entry points.
Our goal was to test a GovTech open innovation process that would enable local and regional governments to scout, test, and adopt innovative solutions. We combined three core elements:
- A structured GovTech Open Innovation Process.
- The use of a Design Contest as a flexible procurement tool to pilot market-ready solutions.
- A GovTech Bootcamp to strengthen startups' B2G strategies.
The thematic focus was energy efficiency, an urgent topic for municipalities across Europe given climate goals and the need to reduce reliance on fossil fuels. Six local and regional governments in Spain, Sweden, Greece and Lithuania defined and launched challenges related to this topic.
What have we achieved?
Pilot 3 set an important precedent in the use of the Design Contest, a procurement instrument rarely used in the context of digital innovation, to engage startups in delivering public sector solutions. We also implemented an open innovation process simultaneously across five different governments, demonstrating that structured experimentation can work at scale and across borders.
Five pilots were implemented across Europe:
- Örnsköldsvik (Sweden): Optimising energy management in a municipal waterpark, using a predictive analytics platform.
- Siauliai (Lithuania): Developing an energy benchmarking dashboard for public buildings, powered by real-time data.
- Tauragė (Lithuania): Mapping green spaces and urban heat islands through remote sensing and AI.
- Madrid (Spain): Piloting a smart irrigation system for public green areas to reduce water and energy use.
- Catalonia (Spain): Testing a digital solution to monitor and optimise energy consumption in public infrastructure.
A sixth city, Kalamata (Greece), defined a challenge but could not proceed with the pilot due to internal constraints.
Each winning startup received approx. €50,000 to test their solution in real-world conditions. In total, the Call for Solutions received 60 expressions of interest from startups from 21 countries, demonstrating strong European and international interest.
An online GovTech Bootcamp was delivered in April 2025, helping startups strengthen their understanding of public procurement and improve their collaboration strategies.
Finally, a Demo Day was held in May 2025 at the GovTech4Impact World Congress in Madrid, giving visibility to the results and facilitating replication by other interested cities.
What have we learned?
Innovation in the public sector is not just about new technologies—it’s about creating the right conditions for change. Through this pilot, we learned that:
- Structure and flexibility must go hand-in-hand: The innovation process needs to be robust but adaptable to each municipality’s reality.
- Political and procurement buy-in is critical: Without internal alignment and senior support, even the best tools can stall.
- Weekly coordination matters: Agile pilot management, with regular check-ins between municipalities and startups, made problem-solving more effective.
- Documentation enables reuse: Clear toolkits and templates allowed cities to follow a repeatable process and will support others to do the same.
- Co-creation builds trust: Municipal teams didn’t just test solutions: they adapted them, making the pilots more relevant and impactful.
Who was involved?
Pilot 3 was coordinated by Gobe Studio, with the support of a strong European partnership:
- Generalitat de Catalunya – CTTI
- Madrid City Council
- Bron Innovation (Sweden)
- Innovation Agency Lithuania
- Beta-i (Portugal)
Together, we developed, tested and validated a replicable model that can now be scaled across Europe. The pilot contributes directly to GovTech4All’s ambition of creating a European single market for GovTech and transforming procurement into a driver of digital public innovation.