How public servants create start-ups of national scale

In April this year, five new projects were launched on the Ukrainian start-up market. These are not the start-ups we hear about every day, but projects that were initiated and created by public servants themselves. This is a new reality. We want to tell you about the new projects, their value for each Ukrainian and the plans of the teams for the coming year. Very soon, Ukrainians will only need a couple of clicks to file an online claim about a defect hairdryer or a toy. A couple of clicks will also be enough to find out in what museum you can
admire this or that masterpiece, to settle a discrepancy with your bank in a fast way or to retrieve complete information about business owners.

Organisers of tenders will only need a couple of clicks to select contractors not only based on their price but also taking into account the sustainability or safety of their products. These are the opportunities offered by the start-ups founded by public servants.

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Demo day of EU Association Lab, April 2019

Background: how it all began

In the summer of 2018, the Advisory Fund for EU Association of Ukraine (GIZ), acting jointly with the Government Office for the Coordination of European and Euro-Atlantic Integration with the support of 1991 Open Data Incubator, initiated EU Association Lab — the first incubation programme for public servants. Launching the programme in this trial format, the initiators
pursued several goals, including the transformation of the public servants’ mentality towards the more entrepreneurial spirit and the stronger development of cooperation between the public sector, civil organisations and business. Apart from that, the focus of the programme itself was important as
well — it aimed to support ideas based on the opportunities provided by the Association Agreement Ukraine-EU.

In the summer, a contest of projects started. Out of 114 applicants, the jury selected five teams that developed their ideas for the next six months on the basis of 1991 Open Data Incubator with the support of mentors. The incubation programme included training in business modelling, teambuilding, marketing and communications. The organisers put a special focus on interaction with the mentors concerning the selection of required IT solutions as well as on consultations with experts for European integration aimed to clarify the substance of the respective tools.

State start-ups — who are these five teams?
Who are they — teams of public servants with a flexible way of thinking who can change their mind, listen to the critics, and strive to understand their audience and to keep in mind its needs when developing solutions?

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Fighters for correct product information: mobile application “Buy Safe”

The mobile application “Buy Safe” offers a mechanism to check the safety of non-food products, to issue complaints about suspicious products and to process these complaints. The project was initiated by the Ministry of Economic Development and Trade of Ukraine.

What is the purpose of the application?
Just imagine: you are going to buy a toy for your child, but you can’t see any product safety information on the package. What can you do? This is exactly the point — according to the project team — where the application “Buy Safe” shall help you out. The project team consisting of representatives of the Ministry of Economic Development and Trade started to build up a new format of interaction between citizens, business and state concerning the safety control of non-food products. The idea behind the application is based on the insight that some manufacturers act irresponsibly and distribute unsafe products, while consumers themselves sometimes lack awareness or do not care enough when selecting what to buy.

In the opinion of the developers of the application “Buy Safe”, the solution to this problem could be to provide proper information to consumers, business and public servants responsible for market supervision. Using this service, each citizen can easily report a suspicious product to the responsible state body as well as check product safety on his/her own. Market supervision bodies will be able to process claims faster and in a targeted way, which is also due to the user-friendly checklist. For state inspectors, this service poses a way to improve the quality of their work and to foster the trust of consumers to state control bodies. As a result, the safety check process will
become more transparent for all parties.

How does the application work?
If a consumer doubts the safety of a concrete product (a hairdryer has exploded, an electric iron has fused, a toy does not have the required marking), he/she can create a claim. He/she will have to select the product type, to insert the name or the trademark of the product, to describe the problem and to attach the picture. The responsible market supervision bodies will have several days to process the claim, to initiate an examination and to provide an answer. The application will be available for the users of Android and iOS and will have a web interface.

What has been done so far and what comes next?
The team is entering the market in the category “Toys” since it covers the most vulnerable group of consumers — children. Presently, the application works in this category in the testing mode. The official release of the application will take place on September 2019 with 70% of the content
already installed. The mobile application will be incrementally filled up with information about 11 product groups and will cover the protection of consumers’ rights. Also, the online check of buying receipts, the QR check of products, as well as the claim tracking function, will be launched. The project team wants to have 500 uploads of the application in the first month; by the end of the year, it wants to implement the application with 100% of the content available and to have 1,000 users.

You can now monitor the project progress on its Facebook website.

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Robin Hoods of the digitalization of cultural heritage: online platform “Cultural Heritage”

The project is an online platform aimed to digitalize the register of the cultural heritage of Ukraine. It is implemented by the Ministry of Culture of Ukraine jointly with the Ukrainian Centre for Cultural Studies and other culture NGOs.

Why is it important?
The project came up as a reaction to the current situation in the cultural sphere: Ukraine regained independence 27 years ago, but it still has the Soviet-era list of cultural heritage objects that exist on paper only. Employees of the Ministry of Culture have to spend up to 4 hours of their working time sometimes to be able to reply if this or that object belongs to the national cultural heritage.

The electronic register of the cultural heritage will help collect, process, analyse data concerning the turnaround of more than 14 million museum objects and more than 130,000 objects of material and immaterial cultural heritage as well will help streamline this process. Accordingly, the register
will contribute to the implementation of the Association Agreement Ukraine-EU concerning the preservation and evaluation of cultural and historical heritage. Apart from that, the project team is striving to help solve the issue concerning the return of cultural objects from the temporarily occupied territories. The global dream of the project participants is to foster the self-identification of Ukrainians by preserving and promoting cultural heritage.

How will it work?
The project is designed to operate on three levels. Fans of art will be using the search system to retrieve data about any interesting object of cultural heritage. Culture experts will be able to read analytical materials and share dedicated events. Apart from that, users will be able to use the online office of the application to receive 12 administrative online services provided by the Ministry of Culture of Ukraine.

The project team has already presented the prototype of the cultural heritage register. The biggest challenge was to find an optimal combination of theoretical tasks and practical IT solutions. The information available on the application can flow directly to the European resource Europeana — it will help present the Ukrainian cultural heritage to the world. The Ministry of Culture is going to become the official owner of the application and to develop it as a modern public portal that provides access to comprehensive information in the field of culture, arts and history. It must be trimmed to be responsive, first, to the interests of end-users, which also includes the delivery of administrative services.

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Knights of green procurement: electronic service “Non-pricing criteria in public procurement”

The electronic system “Non-pricing criteria of ProZorro” is a project implemented jointly by the Ministry of Economic Development and Trade of Ukraine, state company “ProZorro”, Ministry of Environment and Natural Resource of Ukraine, Reform Support Team of the Ministry of Economic Development and Trade of Ukraine, NGO “Zhyva Planeta” (“Live Planet”), GoLocal, the Centre of Ecological Standardisation of the State Ecology Academy for Post-Graduate Studies and Management, GPA in UA. The project aims to implement new standards in public procurement.

Problem
Public procurement poses the biggest market in Ukraine with more than a million transactions taking place every year that generate a turnover of UAH 700 billion. The analysis made by the project team shows that procurement is almost always based on the price criterion and does not take into account quality, energy efficiency and sustainability. Only 0.5% of procurement transactions take place in accordance with non-pricing criteria. The project team conducted a survey among 5,000 customers and found out that the reason for that was that tender owners just did not know how to apply non-pricing criteria.

How will the new approach work?
The project team is developing a service that will enable tender owners to select supplier not only on the basis of the lowest price but also apply such criteria as sustainability and energy efficiency. This approach will have a double impact: public customers will pursue their procurement based on the criteria of quality, sustainability, safety and effective use of public funds, whereas business will have an inventive to offer innovative, energy-efficient and sustainable solutions. Instead of five days of expert work, a procurement specialist will only need five minutes to select a product.

The project team sees all schools, hospitals and public administrations in Ukraine as its target group.

When selecting a product, a customer will have to set categories of non-pricing criteria relevant to him/her. After that, concrete target values shall be selected and their “weight” for the purchase decision shall be set. Following that, a customer will receive a consolidated text for the non-pricing
criteria he/she will be used when announcing a tender.

12 pilot categories of products were selected for the start of the project. For each of them, the project team developed a set of non-pricing criteria with explanations and concrete values. These expert set of criteria are the basic content of the electronic service integrated with the ProZorro system and customers’ offices on the respective electronic platforms. The project is administered and supported by ProZorro and the Ministry of Economic Development and Trade.

Development prospects
The plans of the project team for the near future include pilot procurements in all pilot categories, preparation of official methodological recommendations by the Ministry of Economic Development and Trade, promotion of the system, trainings for potential users and integration of the system with the other services of ProZorro. The goal of the project team for the first year is to increase the share of procurement transactions with non-pricing criteria to 5%; another milestone is to reach annual savings for the state equal to UAH 10 billion in two years after the launch of the system. For the further technical development of the service, the project team expects to receive support from donors.

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Creators of new rules of the game on the financial market: portal “GoodFin”

The portal “GoodFin” is a tool for the processing of claims concerning financial services. The project was initiated by the National Bank of Ukraine, National Commission for the State Regulation of Financial Services, National Commission for Securities and Stock Market, the Project Office for the Support of Financial Sector Reforms as well as experts for European
integration, consumer protection on the financial services market and corporate management.

What situation on the financial market is the project team going to remedy?
Each adult Ukrainian uses financial services on a daily basis (card transactions, money transfers, currency exchange, deposits, loans, insurance and investments). Hence, people often want to receive a consultation or to contact financial institutions or regulating bodies to sort out some service discrepancies or just to compare the offers of financial providers.

However, in most cases, they do not know, to what extent they can trust operators on the financial market. They do not know either whom exactly they can address for help and how they can solve their problems.

What new approach do financial regulators propose?
The project team is aware of the missing regulation of market conduct both on the level of a separate body and in the structure of existing regulating bodies — this is why it applied for participation in the programme with the idea to develop a market code of conduct for participants of the financial market. However, as the work progressed, the team changed its priority for the
development of an IT component — the web portal “Single Shop”. The target group of the portal covers customers, providers and regulators on the financial services market.

The service aims to consolidated information about the products and services of banks and other financial organisations. The primary objective for the project is to remove the gaps in consumer protection on the financial market as well as to improve the proactive responsiveness of the key market regulators. Prior to launching the portal, the team members conducted a field
survey among the representatives of the target audience prepared project documents, determined the key set of parameters to feed the portal, developed the business model and integration with other systems.

The first goal identified by the project team is to establish a single-entry point for all requests and to reduce the timeline for solving customers’ issues to 5 days.

For the regulators, the portal is an opportunity to have a centralized platform, a single-entry point as well as a possibility to systematize all claims and requests, historical statistic data and to monitor the interaction between financial institutions and consumers of financial services.

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Adepts of transparent data on beneficiary owners: web portal “DO100%VIRNO”

A state concept for the establishment of a systemic mechanism for the examination of information about business owners is the joint initiative of the State Financial Monitoring Service, National Bank of Ukraine, Notary Chamber of Ukraine, Ministry of Justice of Ukraine, Ministry of Finance of Ukraine, NGO “Razom Proty Koruptsii” (“Together Against Corruption”) and the Centre for Fight against Corruption.

What challenge is the team striving to tackle?
Dummy companies and concealing real business owners pose one of the significant risks for a fight against money laundering. Last year, the volume of the shadow economy in Ukraine was equal to UAH 1.1 trillion. In the opinion of the project team members, the shadow economy is based primarily on dummy businesses and a lack of capacity to trace them in a timely manner.

Despite the fact that in 2015 Ukraine became one of the first countries in the world to have provided unlimited access to its central register of legal entities, 20% of data about business owners listed in the register are incorrect (according to the data of the Council of Europe).

Moreover, the Ukrainian fiscal authorities are now not legally bound to check, if data about business owners are correct. A system for the detection of real beneficiary owners is not in place in Ukraine.

What solution is proposed?
The project team has developed a concept containing 33 targeted steps to be made by the Government to ensure amendments to the legislation, its effective implementation and development of IT solutions (aggregation and consolidation of existing services).

The key directions include the implementation of validation for data on registration forms at the stage of business registration, further examination of the operational business activity and entitlement of companies to correct the information they submitted. Also, the concept stipulates enhanced liability for the submission of incorrect information to the register, since the current fine equal to UAH 8,000 is not convincing enough, in the team members’ opinion. Parallel to the described activities the team is going to conduct a comprehensive information campaign including close cooperation with business and trainings for persons responsible for the registration of business.

The developers of “100%True” plan to implement the concept by the end of this year.

What comes next?

While the teams are working to launch and to tune up their products, new candidates will be invited in June to apply for the second programme cycle. Please follow the news on the website EU Association Lab as well as on the websites Advisory Fund for EU Association of Ukraine and 1991 Open Data Incubator. In the meantime, you can also see the final presentations of the teams.


For information: the EU Association Lab Programme was established jointly with the Government Office for the Coordination of European and Euro-Atlantic Integration and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The Programme is a component of the project “Advisory Fund for EU Association of Ukraine” funded by the Federal Government of Germany.

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