GovTech[1] in Spain is shaking off its experimental roots and stepping confidently onto the main stage. Over the past five years, we've witnessed an exciting transformation, from cautious pilots to bold strategic initiatives, becoming increasingly embedded in institutional innovation. In 2025 alone, Spain is set to launch around 14 Design Contests, backed by an estimated 1m€ budget, signalling a growing enthusiasm for startup-driven digital transformation of the public sector. With nearly half of Spain's regions now embracing GovTech and clear frontrunners emerging in Madrid, the Basque Country, and Catalonia, it's clear: GovTech in Spain is growing up, consolidating, and getting ready for its next big act. 

Between 2020 and 2024, Spanish public institutions embarked on an exploratory journey into GovTech, pioneering innovation methodologies and cultivating collaborative frameworks between public entities and agile startups. This initial phase marked a crucial shift in organizational culture, fostering openness and experimentation despite its fragmented and reactive tendencies. Programs operated within clearly defined labs, with their focus placed on generating new innovative dynamics within public institutions. 

It was a first step to introduce GovTech innovation methodologies in public institutions, and new ways of working such as: the definition of innovation challenges within public institutions interested in startup-government collaboration for innovation; the identification of relevant GovTech startups within a set region; and the development of pilots around specific use cases of technology in government.

One of the leading pioneers in the country is Govtechlab Madrid (the first GovTech Lab in Ibero-America); initiated by the regional government of Madrid, the project was launched in 2020 and run its course in 2024 (with a hiatus in 2023), having worked with 48 municipalities and implemented 18 pilots. Next up is GovTech Lab Bizkaia, a provincial government 3-year program to tackle 15 departmental challenges with startup solutions. Similarly, the Basque Country’s BIND GovTech 4.0 program introduced a GovTech track in 2023, working with 9 regional public agencies (EJIE, SPRI, etc.), posing 9 innovation challenges ranging from waste management to internal infrastructure.

These programs show how Spain’s regions dipped their toes into GovTech through accelerators and labs, focusing on quick wins rather than structural change. They built proof of concept that startups can deliver public value, laying the groundwork for broader acceptance of GovTech in Spain’s bureaucracies.

Throughout 2024 and into 2025, GovTech efforts became more strategically aligned with core institutional agendas. Labs transformed into hubs[4], willing to challenge existing procurement practices and proactively focusing on identifying scalable, strategic challenges. Public institutions started leveraging targeted technological advancements and ecosystem collaboration to catalyse deeper integration of startup innovation, marking a shift from exploration to strategic execution. 

The aim is to integrate a flow of startup-driven solutions more profoundly within public institutional processes, promote the use of new procurement practices, and foster ecosystem collaboration, especially between large incumbents and innovative providers. These hubs are primarily used to identify use cases for innovative technologies, and to develop precedents on the use of new contractual figures that open up the competition on larger tenders to startups and scaleups.

Public authorities started leveraging EU procurement frameworks (Directive 2014/24/EU) – such as design contests to formally source innovative solutions. This meant GovTech challenges could directly award contracts, ensuring successful prototypes didn’t languish after a pilot. For instance, the city of Valencia’s GovTech call in late 2024 offered that the winning solution would obtain a €50,000 contract to implement their idea, rather than just a prize. 

On a larger scale, the Government of Navarre launched in early 2025 the project “TwIN”, a pioneering GovTech open innovation project focused on identifying AI and digital twins' solutions to strengthen decision-making and operational agility in public administration. Eight challenges will be defined, four by Pamplona’s city council and four by the city council alongside ecosystem players. Solutions will be procured via Design Contests, with a budget of 480.000€ under which the best 8 proposals will be awarded 60.000€ to develop pilots.

By 2025, GovTech practices are starting to become, in some institutions, more embedded within institutional innovation strategies, evolving from isolated initiatives into systematic, continuous processes. The GovTech methodology is integrated in the innovation unit of public administrations, as part of an innovation system made up of a funnel of challenges. The primary objective is the systematic integration of startup innovation in the provision of public services, enabled by a system that focuses on: 

• The constant identification of challenges, which are then channeled to different stakeholders according to their nature (corporations, startups, internal technical teams, etc.).

• A key role from public administrations in incentivising corporate-startup collaboration through tender design.

• The implementation of public procurement practices that enable startup competition in larger opportunities (such as Design Contests).

These innovations no longer function as peripheral pilots but as integral, formalized components of institutional innovation management. GovTech now acts as a structured mechanism, funnelling innovation challenges into specialized paths designed for startups, larger suppliers, or internal teams, marking a mature and comprehensive approach to innovation.

This phase is exemplified by the Government of Catalonia - CTTI, where GovTech is now “business as usual” in government operations. A hallmark of Phase 3 is the collaboration between agile startups and traditional big vendors within public contracts. This blended model means innovations from a small GovTech firm can be integrated into bigger systems or scaled across departments with the help of larger integrators, a key step to overcoming the earlier “valley of death.” In 2025, 6 pilots will be launched via Design Contests, under a budget of approximately 600.000€.

Overall, Spain’s GovTech evolution – from scattered labs to an integrated innovation ecosystem – mirrors broader trends in Europe. At the highest level, there’s recognition that modernizing the public sector through technology is key to competitiveness. The Draghi Report (2024) on EU competitiveness explicitly urges greater investment in high-tech innovation to close Europe’s “innovation gap” with global peers. In line with this, Spain’s systematic GovTech programs contribute to boosting productivity and quality in public services, an often-overlooked pillar of economic competitiveness. By opening up the government market to startups and new ideas, GovTech helps Europe tap into its immense tech talent for public good, a priority underscored by Draghi’s call to focus on technological investments as a driver of growth. 

Furthermore, the shift in the Spanish ecosystem’s evolution reflects how open innovation in government is transitioning from experimental pilots to structured digital transformation projects that are part of broader strategies, as foreseen in the OECD’s 2024 GovTech Report. This shift is evident in the Spanish GovTech 2.0 and 3.0 phases, where initiatives are no longer just exploratory but are becoming embedded in procurement frameworks and strategic technology roadmaps. Additionally, the increasing use of design contests and the promotion of corporate-startup collaboration, mirror the OECD’s recommendations for fostering digital innovation in government through structured regulatory environments and direct collaboration with the private sector. These ideas note that GovTech not only improves public sector efficiency but “fosters the participation of start-ups and newer providers in the government market,” injecting fresh innovation into service delivery. 

In sum, Spain’s GovTech evolution from 2020 to 2025 illustrates the path from scattered innovation “pilots” to a structured, ecosystem-based approach that is transforming how the public sector solves problems. What began as small experimental labs has become a mature model where startups, SMEs, and public agencies collaborate routinely through challenges and innovation-friendly contracts. This not only delivers better digital services at home but also strengthens Spain’s and Europe’s ability to respond to new challenges competitively. As the Draghi and OECD reports suggest, embedding GovTech in the system helps ensure the public sector keeps pace with technological change – making government more responsive, efficient and forward-looking in the digital age. The Spanish case offers a promising blueprint for other countries aiming to harness innovation and boost public sector competitiveness through GovTech.

[1] To deep dive further on the topic of GovTech, please visit the GovTech Connect Collection: https://interoperable-europe.ec.europa.eu/collection/govtechconnect.

[2] Controlled and facilitated area of work, with a designated execution time and resources.

[3] Teams being split into smaller parts, sections or groups, with a tendency to isolation.

[4] Center of activity of an ecosystem, involving a diverse range of stakeholders.

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