UPDATE: Project details updated during the EPSA 2025-26 edition.
NIDO’s core business consists of enabling innovation within governments, public services and public administrations by supporting civil servants in their quest for change. Its new project Government Buys Innovation is a modern version of public procurement, focused on the active search for innovative solutions available on the market. By reconsidering the way of interaction between the public and the private sector, NIDO aims to transform public entities into pioneers for new creative ideas, modernising countries in the benefit of companies and citizens.
Its novelty consists of not only making the goal of a more modern public sector feasible, but also in changing the principles of the classic public procurement. It provides assistance and the possibility of improvement to any public sector entity. NIDO’s work consists of support and expertise to find the best and most innovative result for every specific project. Its expertise consists of asking the right questions, helping to formulate and frame the problem. It guides civil servants in the process of open mindedness and creativity, and tries to engage businesses that might offer out-of-the-box approaches. Read more here.
Developments
Since the submission of the initial project application, the initiative formerly known as Gov Buys Innovation has evolved from a project-based approach into a structurally embedded and permanent mission within NIDO (nurturing ideas and developing opportunities). It is now fully institutionalised and publicly accessible via the NIDO website, ensuring continuity and visibility for public administrations and businesses alike. While the initiative remains fully embedded within NIDO and has not been separated into a dedicated organisational unit, it is collectively supported by the NIDO team as part of its core activities.
One significant development is the professionalisation and standardisation of the approach. Templates for challenges, evaluation criteria, and feedback have been further refined, allowing for a more consistent and transparent process across different challenges. In parallel, a new and improved website was launched, enabling clearer communication about the approach, making it accessible to everybody who wants to experiment in a public sector context, have better follow-up of ongoing challenges, and improved accessibility for participating businesses.
The number of challenges has stabilised at approximately two to three per year to showcase the approach. However, the number of requests and exploratory questions from public entities has increased substantially. This has led to a more deliberate planning approach, whereby not every request automatically results in a challenge. Instead, NIDO now actively assesses whether the challenge-driven methodology is the most suitable solution, or whether alternative innovation instruments may be more appropriate.
From a resource perspective, limited but targeted budgets have been secured for specific challenges. In addition, the initiative has been connected to broader innovation activities, such as the Federal Innovation Award, where NIDO is exploring ways to support winning teams with further implementation funding and business case development.
Finally, based on actual usage and external perception, the initiative was rebranded as NIDO’s Challenge-Driven Approach. This decision was taken after observing that public servants and stakeholders increasingly referred to the process as the ‘NIDO-challenges’. The rebranding strengthened recognition, ownership, and clarity, without altering the core methodology or objectives.
Long-term impact
The initial objective of the project was to enable public servants to experiment before committing to the full implementation of new solutions on a large scale. This was meant to allow solutions to be developed iteratively and thereby reducing risks and avoiding costly failures. This objective has remained central and has been demonstrably achieved. The lab’s objective has broadened however: beyond experimentation and inspiration, NIDO now also focuses on embedding innovation structurally through strategic exercises and research on levers to innovate in the public sector context.
NIDO’s priority is to foster innovation in the public sector by leveraging innovative solutions already available on the private market. By significantly lowering administrative and financial thresholds, the challenge-driven approach enables SMEs, start-ups, and established firms alike to contribute innovative solutions to public sector projects. As a result, companies actively use the challenges to develop, test, and refine solutions tailored to public sector needs, thereby mobilising innovation potential that was previously under-represented in public procurement.
Beyond quantitative participation, the project has had a lasting cultural impact within public administrations. Civil servants who have worked with the challenge-driven approach tend to return for new challenges and show increased willingness to experiment, iterate, and refine solutions rather than relying on predefined specifications. This indicates a sustained behavioural change towards innovation-friendly practices.
The extensive and structured feedback provided throughout the process has also proven impactful. Businesses – including very small companies – regularly participate again, even when they were not awarded a contract, as the learning value of participation is high. This reinforces trust in public procurement processes and strengthens long-term collaboration between the public and private sectors.
Overall, the project has met its original objectives by combining risk reduction, cost awareness, and innovation, while fostering a more open, learning-oriented procurement culture.
Adjustment in the objectives
While the core objective of enabling safe experimentation before large-scale implementation has remained unchanged, an additional objective has been introduced: scaling experimentation responsibly. As the approach matured, NIDO began legally assessing how higher experimentation budgets can be used without abandoning iterative piloting or creating projects that are ‘too big to fail’. This evolution is particularly relevant when NIDO assists international development cooperation, where larger test budgets can allow faster, more efficient experimentation and, where successful, quicker implementation at scale, while preserving learning through iteration.
The approach has also been adapted to different institutional contexts. In a challenge conducted with the Belgian asylum authority, the methodology was adjusted to fit specific operational needs. Rather than involving private sector actors, the NIDO team worked directly with staff to co-develop solutions, resulting in a significant improvement in internal efficiency.
An increasing number of ministries have participated in challenges, with solutions inspiring uptake across policy areas and joint initiatives. In addition, through a Student Challenge Award, students are now invited to initiate challenges, providing public services with valuable external perspectives.
International spillovers have also emerged, including the approach being replicated in other countries, and cross-border cooperation between Belgium, the Netherlands, and Luxembourg.