Public Purchasing Policies for e-local government services and the emergence of KIE: The Case of the LGAF (Local Government Application Framework)
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1 Public Purchasing Policies for e-local government services and the emergence of KIE: The Case of the LGAF (Local Government Application Framework) initiative in Greece DIME-AEGIS-LIEE/NTUA ATHENS 2010 Conference Athens, April 2010 Yannis Caloghirou, Asc. Professor, LIEE/NTUA Panayiotis Panayiotopoulos, Researcher, LIEE/NTUA 1
2 The context of the paper The broadercontext: The role of demand (private as well public) in stimulating and enhancing knowledge-intensive entrepreneurship and innovation. The particularcontext: Public procurement The public sector by and large as an intelligent customer(a kind of lead user) in providing knowledge rich and innovative entrepreneurial opportunities. 2
3 The aim of the paper The broader aim: Explore the role played by purchasing policies of the public administration and the local authorities in stimulating the emergence and/or growth of the knowledgeintensive entrepreneurship providing innovative services at the local, regional and national level. The specific aim: Present a case study-based also on participants observation-on the creation of a Local Government Application Framework (LGAF) aiming at providing high-quality innovative e-local government services. 3
4 Some crucial questions To what extent this initiative can lead to product (service) and process innovation in local government in Greece? To what extent this initiative can stimulate Knowledge-intensiveentrepreneurship (KIE) in the Greek ICT sector at the local, regional and national level? The question of sustainability and transferability of this policy initiative and the pilot project. 4
5 Two broader issues In terms of innovation, A paradigm shift in the innovation process: From supplier-driven to user-driven and open collaborative model (Von Hippel et al). Inpublic policy terms, Industrial policy for the next decade A come-back of industrial policy: Move from traditional industrial policy to innovation based industrial policy at the EU and national level. 5
6 A bit of theory From innovation studies research: i.e. Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation (Baldwin & Von Hippel, 2009, HBS working paper and Druid 2010 Summer Conference). From policy research: An innovation-based new industrial policy (e.g. Soete..) 6
7 Three models of innovation (..cont..) Innovation by producers [the dominant mode of innovation since Schumpeter] public policies based on a theory of producer incentives. It is only one mode of innovation. Single user individuals or firms Open collaborative innovation projects. Each of these three forms represents a different way to organize human effort and investments aimed at generating valuable new innovations. 7
8 The Greek ICT sector Public Demand: In most of cases Public Authorities have problems to specify their needs, there are not intelligent customers in all levels (design, implementation, operation) Supply: The suppliers offer ready-made products/ ready-made solutions there was a degree of innovativeness in 80s and 90s but has been minimized. The ratio ICT equipment/services (in monetary terms) is about 2 while in Scandinavian Countries is about 0.5 However there is a human resource that constitutes a source of dynamism and innovativeness and usually works in collaborative groups (OSS) 8
9 The need for an integrated demand policy An integrated demand policy can influence significantly the quality and innovation of supply. Especially in our days where Paradigm Shift occurs. (Baldwin & von Hippel, 2009) Enhancement of Human Resource skills and awarenessand motivationfor innovation use. Broadband Infrastructure Sufficient Capacity [Next Generation Networks (fibre optic etc.)] Open Access Change of Public Procurement Policies and Processes Vertical and Horizontal Coordination of Public Sector Strong Coordination btw. different levels and functions of Public Sector (for procurement policies, education of Human Resource, integration of services, broadband infrastructure etc.) Regulation(Central) Measures Digital signature, ID card Interoperability Framework 9
10 Structuring an open collaborative innovation model Strengthening of Cooperationamong Universities, Research Centres, Public Administration, Local Government and ICT sector at the Local, Regional and National Level Emphasis on Cloud Computing technologies: Utilization of hardware and software through internet Infrastructure as a Service (IaaS) Software as a Service (SaaS) Platform as a Service (PaaS) Configuration of a Strategyrely on the new trend(user and Open Collaborative Innovation) Encouragement of collaborative mechanisms 10
11 Structuring an open collaborative innovation model More emphasis and resources on design and monitoring of ICT projects Sufficient Interaction btw. Suppliers (ICT firms) and Users (Public Authorities) Adoption of Operational Standards More emphasis on the Level of Services Quality On time involvement of users (public employees, citizens, businesses) Modularity and gradual development of systems Synergies rather than fragmented initiatives (Develop Once, Use Many) New financial schemes (e.g. PPPs) More resources for systems maintenance and upgrading 11
12 Expected benefits Direct Benefits: Strong Impetus for the transformation (more KIE) of ICT sector. ICT firms should be transformed from sellers (box movers!) ofέτοιμων products/ έτοιμων solutionsto knowledge-intensive service providers, more adapted to users needs.possibility of contribution in the transformation of the work organization of users Problem solving processes (Definition of KIE, Del 1.1.1/Athens meeting). Combination of technic/technological and organizational capabilities. Transformation of current and emergence of new ICT firms Enhancement of the competitiveness of Greek ICT Sector, Activation in abroad Broader Benefits Better and more innovative use of ICTs (user-driven innovation) Modernisationof the public sector and the whole economy, Better service of societal needs 12
13 The Strategy of the Central Union of Local Authorities in Greece (KEDKE) towards a digital demos (local authority) Three pillars: e-local government services, Next Generation Networks (Broadband), HR Management. 1. The provision of on-line e-services offeredthroughmultiple channels (Internet, Fixed Telephony, Mobile, Interactive TV, printed..)to the Citizens, the local Businesses and the local public organizations. (e.g. LGAF) The two organizing principles for the creation and provision of e-services is: 1. Develop an application once, apply it many times. 2. Produce data and content in a digital form. 2. Develop Open and Accessible Broadband Infrastructure (The Central Union s umbrella initiative and the bottom-up regional initiatives). 13
14 The Digital Strategy of the Central Union of Local Authorities in Greece (KEDKE) 3. ICT and HR Management ICT Training in various forms at all levels (the elected political personnel, the employees, the citizens) Developing dynamic capabilities and building ICT capacities for the design, implementation and management of ICT projects and ventures. Building and maintaining thematic learning networks for knowledge sharing and knowledge transfer, for the codification of tacit knowledge and practical experience related to the design and implementation of ICT projects and ICT new ventures and initiatives. Encourage co-operationwith knowledge producing institutions (regional Universities, Research Institutes, public agencies etc), local ICT firms and digital communities (open source communities,..). KEDKE Information Society Strategy can lead to an integrated demand oriented innovation policy. 14
15 The Case Study: LOCAL GOVERNMENT APPLICATION FRAMEWORK ( The aim of the initiative «Local Government Application Framework» (LGAF) designed by the CENTRAL UNION of the Municipalities of Greece (KEDKE) is to Upgrade the services provided by the local authorities to citizens and businesses at the local level (automation and rationalization of the necessary procedures, digitization) Designing and implementing a pilot project. 15
16 The scope of LGAF The scopeof the project is the realization of electronic and telephone services for the administrative service of citizens and businesses in sixteen (16) local authorities (initial phase). The project includes the central development of an open-source platform that will be free and available to be installed and used, initially, by 16 local authorities [14 Municipalities (various types and sizes), 1 TEDK (Local Union of Municipalities), KEDKE] for the provision of high-level e- government services. 16
17 Service Categories For Citizens Payment of municipal taxes, fines and charges for specific services from the municipality Registration / deletion / modification in the municipal records Issue of individual or family certificates Urban issues -issuing building permits Transportation and roads Environment -clean -recycle Health and Social Care Training Culture -recreation Local economic development and entrepreneurship Electronic democracy (e-democracy) For Businesses Permits for establishment and running of businesses Individual licenses for occupation Payment of municipal taxes and fines DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. YCAL& PPANAG, 17
18 Design, Implementation and Operation Process An open collaborative scheme leading to innovation Not a typical linear process Design Implementation Operation Through knowledge exploration and accumulation the operational standards (Design) have been determined more than once Thus, there was a need of: appropriate Change Management Stable Funding & Relationships among partners DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. YCAL& PPANAG,
19 Design, Implementation and Operation Process (1) KEDKEdesignedthe project in collaboration with an NTUA group and monitored the project implementation through a consulting company PETA SA. Aided by a scientific committee. Main Design Characteristics: Use of Open Source Software for the implementation of the Platform Basic Principle: Develop once, use many High Innovativeness A large Greek ICT Firm (F 1 ) was selected-following an open bid- as a prime contractor to coordinate the implementation of the project. DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. YCAL& PPANAG,
20 Design, Implementation and Operation Process (2) Cooperationof F 1 with the Atlantis Group (University of Crete) and theresearch Academic Computer Technology Institute (CTI) Reconfiguration of Operational Standards Basic Difference: Adoption of Service Oriented Architecture (SOA) i.e. modular Architecture The modularity of the project scheme allowed for five knowledge intensive micro firms and some other research groups of universities to participate in the implementation of the project. DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. YCAL& PPANAG,
21 Design, Implementation and Operation Process (3) Initially, there was low interest and awarenessfrom the local authorities In a later phase some few municipalities started to cooperate with the producers and utilizethe platform for the provision of e-government services DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. YCAL& PPANAG,
22 KEDKE INFOSTRAG Design Phase ATLANTIS, CTI f 1 F1 f 5 Implementation Phase f 2 f 3 f 4 Other Universities KEDKE DIME-AEGIS LIEEE/NTUA ATHENS 2010 CONFER. 14 Municipalities TEDK YCAL& PPANAG, Operation Phase
23 Until now LGAF has given strong impetus to 5 KI micro firms Characteristics of LGAF that favor KIE: SOA (modularity): In each layer (module) one or more ICT firms can activate independently from the residual system Open source: the game is more open, less need for specialized know-how, work goes hand in hand with education Further Opportunities for KIE: Emergence and growth of local KIE for support, maintenance and upgrading services Knowledge Externalities: Because ICTs are general purpose technologies the experience and knowledge asset from LGAF project can be utilized in other fields of Public Sector. 23
24 The profile of the micro KIEs New firms (founded by young ICT specialists after 2000) Spin outs. Very specialized. The LGAF Initiative provided the ground for participation (i.e. the modularity and the openness of the project) in a large-scale project in order to create an integrated system.. 24
25 but obstacles are there Funding discontinuities. Conflicts with the prime-contractor. Dedication of the purchasing authority to this open collaborative model 25
26 How Intelligent Costumer is KEDKE in this project? KEDKE acts on behalf of end-users (Local Authorities): Competence Buildingthrough Cooperation with the academic sector (LIEE/NTUA) and a developing company (PETA SA) for the design and monitoring of the project 14 Municipalities, TEDK: The majority of these local authorities has relatively low interest and Competence to operate the platform LGAF Need for more intensive awareness building and education measures (more integrated demand policies) 26
27 Technical Characteristics of LGAF Service Oriented Architecture (SOA):Modular Design Architecture The technological architecture is organized in separate and interconnected layers (modules) SOA favors interoperability btw. Information systems and applications LGAF is based on an Open Source Software Basic Principle: Develop Once, Use Many The platform is developed centrally and potentially can be used by every authority 27
28 Opportunities for (User) Innovation TheLocal Authorities have through the operation of a SOA such as LGAF the opportunity for: Product Innovation (upgrading of administrative services) through Process Innovation (integration of data, applications and processes/procedures) 28
29 Opportunities for (User) Innovation The Basic Principle Build once, use many implies for the municipalities: Fewer cost for Technological Equipment (minimal cost of platform acquisition) Release of Financial Resources for Organisational Innovation (more man-hours for design of electronic services, interaction with producers) More financial resources for maintenanceand upgrading services 29
30 Opportunities for (User) Innovation Broad Knowledge Diffusion and Utilization LGAF favors and demands cooperation and interaction among partners (incremental innovation) o Between producer-user [Firms with Local Authorities (LAs)] obetween users [btw 16 LAs, in the future btw 16 LA and other LA (potential users of LGAF)] ouser-driven Innovation -A Local Authority through the utilization of LGAF can make organizational innovations and be a knowledge producer. Moreover can transmit its knowledge to other LAs. 30
31 Two crucial questions? Is the LGAF model sustainable? Can this model be extended and generalized? [transferability]. 31
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