Another role of the Lab is to make prototypes that demonstrate how digital technology can work in practice. For municipal departments, it may take a lot of imagination to foresee how a solution might work, and in that case, a prototype, even an imperfect one, can help to demonstrate in practice what can be achieved. An example is the chatbot prototype that the Lab has recently developed. When citizens of Växjö want a building permit, they must contact a municipal office, but that is only opened during regular office hours. The office management was wondering if a chatbot could help to answer most questions on a 24/7 basis, and asked the Digital Lab to make a prototype. In a few weeks’ time, the Lab managed to create one. It was not perfect, it could not answer all questions, but it helped the department to understand much better what a chatbot can and cannot do, and to make the decision if it makes sense or not to make a full version.
As part of the DIACCESS project, Växjö (Sweden) set up a “Digital Lab” where these kind of innovations are developed. The Lab works in the service of the city: departments can approach the Lab with particular challenges or problems, to have it explore if there is a possible solution. But this does not mean that the lab will always develop something new. Petter Berg, leader of the Lab, underlines that many problems have already been solved elsewhere, and are available on the market by technology vendors. “A key role of the Lab is to look what smart solutions are already there, and analyse their suitability for the problem at hand; then we can advise the city departments what to buy”.
One would expect such a lab to be a place where tech-savvy experts do their magic. And so it is, but there is more: the Digital Lab also trains unemployed people to obtain new skills that may help them to find a job. On a half-year rotation basis, four selected trainees, supervised by experienced IT experts, learn how to develop solutions such as the snow detection application and the chatbot. According to Petter Berg, the first batch of trainees did a remarkable job, but not all found regular employment after their training yet. This also has to do with the difficult labour market, as due to the pandemic the number of vacancies, also in IT, has decreased dramatically.
For many innovations, cities rely on technology providers. A key feature of DIACCESS is to renew the way Växjö works with private suppliers. In traditional procurement, companies make a bid to provide the city with a well-specified product, service or solution; the one with the best price-quality ratio wins, and the role division between city and company is one of client-supplier. In DIACCESS, on the contrary, companies are invited to develop a solution for a more generic problem or challenge. For example, “develop a solution to improve the snow-clearing procedures of the cities’ bicycle tracks”. Two challenges were already pre-defined in the DIACCESS project (snow clearing and a smarter school heating system); the others will have to be defined in four subsequent challenge rounds during the lifetime of DIACCESS. The crucial element here is that the contract between city and supplier includes not just the delivery of a product or service, but also a research and development stage in which the new solution is developed. Legally, this type of procurement is called Innovation Partnership, a procurement option introduced by the EU in 2014: see box 1 for more details. The idea is that the city and the supplier take time to co-create a good solution. The city does not want to become the owner of the solution: it will buy a license to use or apply it in its organisation. That means that the supplying company can scale it up and sell the newly developed service also to other eventual clients, and hence DIACCESS is also indirectly an economic development project. During the summer of 2020, the city published its first call under this new model. A good number of companies were interested, but many did not immediately grasp what this was about: they were used to offer a bid to a detailed described task, and then win it or not, but this was different. Therefore, the city organised an interactive session with the companies to answer their questions, and published an extensive FAQ for other interested parties.
Innovation partnership has been established as a new type of procurement procedure in 2014 by the EC. Innovation partnership is a restricted procedure followed by a contract with milestones on the research and development part (creating innovative solution) and the supply of the newly found solution (supplying the innovative solution adapted to the specific needs of the public procurer).
The main feature of the innovative partnership is that the innovation process happens during the contractual phase, once the innovation partner(s) is (are) selected and awarded the contract. In other procedures, innovation typically occurs in the pre-contracting phase and at the moment of the conclusion of the contract; the public procurer already knows what type of solution it is buying.
In innovation partnership, the public procurer is entering into the contract with the best potential supplier(s) of innovation who should be able to create the innovative solution and supply its real scale implementation for the public procurer.
It is far from straightforward for city departments to formulate well-defined challenges based on which the Lab or private companies can develop innovative solutions. Departments are not used to work in this way, their procurement methods are still traditional. It will take much effort, and a change in mind-set and culture of the municipal organisation. And also, some good examples or practices of how this can work will help.
Petter Berg is convinced that many municipal services can become better and/or more efficient using digital technology, but there is no structure yet of how challenges can be collected from the various city departments, and capacity building among city staff will probably be needed to realise the change.
Fortunately, the project has only just begun…