CitCom.AI Market Report: perspectives on AI, procurement, and interoperability in public administration

The European Commission’s Interoperability and Digital Government unit has been supporting digital transformation within the public sector, with interoperability and innovation through emerging technologies at its core. To support these efforts, we are raising the awareness of CitCom.AI - an AI Testing and Experimentation Facility, supporting AI adoption in smart cities and communities - which provides a platform for testing and experimentation, bridging the gap between technology suppliers and real-world needs. The recent update to the CitCom.AI Market Report analysed the evolving landscape of AI adoption in Europe 

The new report refines its assessment of AI adoption trends, regulatory developments, provides information on new funding initiatives; helping startups navigate compliance and secure financial support. The revised edition also provides a broader network for collaboration and market entry strategies and enables startups to gain insights into structured testing environments that can fast-track deployment and regulatory alignment. 

AI in public administration: enabling interoperability and innovation 

Artificial intelligence is reshaping public administration, opening new avenues for enhancing services, streamlining processes, and supporting evidence-based decision-making. For this to move from mere pilots to real transformation of the public sector though, AI solutions must be founded on the pillars of interoperability and administrations should seek to reuse existing solutions across Member States, instead of developing them from scratch every time. As the report explains, the Interoperable Europe Act promotes the idea of share and reuse, “An administration might approach another administration and say, 'I would like to reuse that solution unless it's under particular IP rights or other restrictions.' That can be done by putting the content in question on the Interoperable Europe portal or on a portal, catalogue, or repository connected with the Interoperable Europe portal." 

Closing procurement gaps for AI and digital solutions 

Procurement is among the key barriers to the deployment of AI in the public sector. The traditional procurement processes are rigid to accommodate innovative AI-driven solutions, making it hard for public purchasers to bring on board the most recent digital solutions. Emphasising an escape from this challenge, the report identifies alternative approaches, "One of the biggest bottlenecks is procurement. There are many ways of overcoming it, and there is something that in Lithuania is widely used but now will also be piloted on a larger scale through the GovTech4All StartUp challenges. It's called a design contest, and it's an innovative procurement approach for digital solutions, an approach traditionally used in architecture. And then there is the negotiated procedure, where you can invite a couple of companies to submit an initial tender, which the buyer can request to be resubmitted later in the subsequent round of negotiations so that you can ultimately go with the best.” 

Next steps: Public sector innovation using AI 

Ensuring the adoption of AI follows interoperability practices and effective procurement strategies is key to enabling digital government transformation. The Interoperable Europe Act establishes a legal basis for cross-border collaboration, while innovative procurement practices such as design contests open new channels to acquire AI-based solutions. 

The Commission maintains such efforts with initiatives such as CitCom.AI, which enables European technology providers to test AI in real-world environments. The CitCom.AI Market Report is a useful resource for startups, policymakers and public sector practitioners in navigating the possibilities of AI within government. 

Find the full report available here on CitCom.