Naeim Khanjani is the CEO and co-founder of Electro Analyticsa public affairs software company designed to empower policy teams.
Govtech is a fast growing industry. It represents technology solutions designed to improve government operations, response and policy implementation. It is also one of the fastest growing startup sectors, breaking several financing, merger and acquisition data in 2021. To support its exponential growth into a sustainable industry, govtech startups need a network of resources, shared wisdom, and funding tailored to the specialty. In other words, the US needs a govtech startup ecosystem.
Defining a startup ecosystem
Startup ecosystems comprise a network of resources dedicated to supporting innovation through startups in a particular region. Typically bound by geography, dozens of cities around the world are home to startup ecosystems. Networks normally include support and resources from local governments, universities, coworking spaces and large corporations. As a network of institutions committed to fostering innovation, ecosystems offer startups mentorship, office space, funding opportunities, and access to networks with like-minded entrepreneurs. Startup ecosystems are powered to support the development of early-stage and growth-stage startups. According to StartupBlink, the US has more than 380 startup ecosystems of the 412 in North America, with the largest global share of innovation.
My company is headquartered in Washington, DC, which has a thriving tech startup ecosystem. We have access to stronger resources and connections here than in a city without. Participating in a startup ecosystem allowed us to scale our business faster and build stronger community relationships.
Within startup ecosystems are industry-specific ecosystems. Ecosystems dedicated to startups in a particular field, such as fintech or blockchain technology, align their resources to facilitate the creation, growth and success of startups. Just as certain geographic areas are hubs for conventional industries, such as Detroit for auto manufacturing and Los Angeles for the movie industry, industry-centric startup ecosystems foster a web of complementary resources, connections, and opportunities, enabling the environment is created that is needed to help that particular industry. excel.
New York has long been a financial center. In recent years, the fastest-growing companies were not on Wall Street, but rather were members of the fintech startup ecosystem. New York’s fintech industry rose above the rest thanks to existing resources and institutions in the financial sector targeting emerging startups. Fintech startups also enjoyed the expansion of public funds for startups from former Mayor Michael Bloomberg.
Govtech startups lack a proper ecosystem. Like fintech, a govtech startup ecosystem has the potential to drive innovation in the industry at a level not seen before. Government operations are notorious for their bureaucracy and lack of versatility. A large proportion of govtech startups are tackling those challenges directly, equipping government agencies with the tools needed to take a proactive approach to their work. Fintech startup ecosystems reshaped the financial landscape; imagine what a govtech startup ecosystem could achieve to help governments serve the public.
The Opportunity for Govtech Startups
A 2018 report from Accenture found that the global govtech market is valued at $400 billion, and they predict that the market will reach $1 trillion by 2025. The US continues to be a major hub for govtech startups. An ecosystem of resources, mentors, funding and sandbox testing reveals a world of possibilities for a fast-growing industry.
Govtech startups represent a vibrant cross-section of entrepreneurs looking to support some of government’s most pressing technology challenges. According to a report from CivStart, a DC-based nonprofit dedicated to driving the success of govtech ventures (of which I am on the advisory board), investing in a govtech startup ecosystem supports growing representation in the field†
New York’s fintech startup hub has strong correlations with the city’s historic financial sector. At the same time, govtech remains a suitable startup specialty for Washington, DC. Since DC is the core of the federal government, govtech startups have the most to gain from operating in the same city as their largest clients.
Expanding the range of industry-focused startup ecosystems is an investment in stronger public services powered by advanced technologies. Creating industry-specific startup ecosystems stands to amplify the longevity of startups through tailored resources, connections, and financing. In particular, the case for facilitating a govtech startup ecosystem in Washington, DC, serves to catalyze the future of advanced government technologies designed to meet public needs in real time. Encouraging the creation of a govtech startup ecosystem in Washington embraces a civic mindset and supports a specialized sector of mission-driven startups.
Those living in the DC Metro area can learn more about expanding resources for local govtech startups through accelerators like CivStart. To keep up with emerging trends in startup ecosystems, Startup Genome, an innovation policy research and consultancy firm that specializes in developing startup ecosystems around the world, is also a great resource.
gotechbusiness.com Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?