Breaking down barriers: how to improve SMEs' access to the public sector market

Written by Henry Rex on 29 March 2019 in Opinion
Opinion

Research from techUK showed that smaller firms still face major challenges in winning government business. The industry body's head of public sector Henry Rex outlines why SMEs have both cause for concern and reasons to be cheerful

The coming decades will bring significant challenges for the UK public sector as it strives to deliver more value for money while meeting the needs of an ageing population and, crucially, a more demanding population, as citizens become ever more consumer-like in their expectations of public services.

In the UK, our consumers are the most prolific online shoppers in Europe. Expectations and demands are increasing as retail and online experiences improve. Entire business models are built on the idea of delivery at the touch of a button. And, as advances in the digital economy march on, the public sector must prepare itself for the high level of service and convenience that citizens will expect when accessing public services, too.

Of course, this will have to be done within budgetary constraints. It is probably safe to assume that this year’s Spending Review will not lead to an overwhelming increase in departmental resources, so we have to accelerate the transformation of public services through the smart application of digital technology. Quite simply, the smarter state is the only one we can afford.

The expectation is to provide seamless end-to-end services, which are modern, affordable, and deliver value for citizens. It is the govtech sector’s job to help address this by driving closer collaboration between the public sector and tech innovators to ensure that solutions for government challenges are practical, deliverable and informed by leading industry thinking.

Crucial to delivering public service transformation is a broad and diverse supplier base. Widening the pool of potential tech suppliers improves choice and lowers cost through increased competition. By bringing more small and medium-sized enterprises into the market, the government can ensure it has access to the full range of innovative tech capabilities and make the most of the govtech opportunity. Aware of such benefits, the government has set itself the target of spending £1 in every £3 with SMEs by 2022.

"I’m optimistic that 2019 could be the year we make real progress with the SME agenda. After a little bit of ministerial churn, we have had a degree of stability since Oliver Dowden took over the brief, and he appears to have a deep personal interest in the issue."

In December and January, techUK surveyed its SME members who work with – or aspire to work with – the public sector. This is the fourth consecutive time we have carried out our Govtech SME Survey, and it is intended to identify barriers SMEs face in this sector, ways those barriers can be overcome, and to track changes in perceptions of how government is faring in working with smaller tech companies.

The results of our survey make for interesting reading.

Respondents were keen to acknowledge what has been working well. But the overall picture seems to be that, despite recent efforts, selling tech to government remains disproportionately hard.

A total of 68% said that government has not acted effectively on its commitment to helping small businesses break into the public sector market. Perhaps most disappointingly, it seems that SMEs are less confident that the situation will improve significantly in the short term, with only 37% of respondents saying they felt the government’s 33% SME spending target is achievable in the next five years, down from 49% in the same survey last year.

Familiar obstacles
The barriers cited by respondents may feel familiar to those who have been around this sector for a little while: a lack of pre-procurement industry engagement; a sub-optimal understanding of how smaller businesses can address public sector needs; access to relevant information; and the difficulty of champion good work that’s being done elsewhere across the public sector.

But if you’re an SME contemplating the public sector tech market, don’t despair, there are certainly reasons to be cheerful.

The Digital Marketplace was highlighted as an initiative that has made life easier, with 63% of respondents saying that the G-Cloud framework has helped SMEs access the market. And I’m optimistic that 2019 could be the year we make real progress with the SME agenda. After a little bit of ministerial churn, we have had a degree of stability since Oliver Dowden took over the brief, and he appears to have a deep personal interest in the issue.

The House of Commons Science and Technology Committee's inquiry into digital government has added renewed political impetus to driving this agenda. The Innovation Strategy to be published later this year will hopefully outline practical steps outlining how the government can access innovative tech from a wider range of companies. Departments are publishing SME Action Plans outlining how they intend to achieve the spending target. And Martin Traynor OBE has recently been appointed Small Business Crown Representative to carry on the excellent work of his predecessor Emma Jones.

While there is obviously no easy answer to this, and no silver bullet, there are some straightforward steps that can be taken which would make life noticeably easier for SMEs trying to engage with the public sector tech market. I hope the recommendations outlined in our report can help make a difference, and perhaps 2019 will be the year we make the UK as well known for govtech as it is for fintech.

 

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