Financing the Next Decade of Digital Public Goods

The field of digital public goods (DPGs) is at an inflection point. Evidence for expanding the use of open source digital platforms and infrastructure is clear. Virtually every democracy responding effectively to the pandemic relies on world class digital systems to manage resources, data, and digital identity. There is no longer any real question about whether these systems work. However, there is still real uncertainty around the best strategies for financing the development of DPGs, facilitating their successful deployment and maintenance, and ensuring responsible governance in ways that prevent their misuse.

On March 18, New America hosted a roundtable with select senior leaders in government, finance, civil society, and technology to explore financing architecture that could support global adoption of DPGs. The event comes exactly six months after the launch of the #DigitalDecade initiative at the UN General Assembly, where a diverse coalition of the world’s largest foundations and development actors embraced a vision for digital infrastructure in government. Building on insights from funders and government leaders during that event, roundtable participants assessed the readiness of existing institutions to provide sustainable sources of funding for DPGs and explored key components of new financing architecture.

Recent successes in building open source solutions for digital identity, payments, data interoperability, and government have created momentum among public sector and philanthropic funders to establish a more comprehensive financing architecture to support a cohesive ecosystem of DPGs. Formation of a marketplace for digital public goods that unites governments, technology providers, funders and civil society could be a breakthrough for the field in the same way structures such as GAVI and The Global Fund transformed work on public health challenges.

Participants highlighted several key points that can help accelerate global movement toward financing solutions for digital public infrastructure:

• Unconventional coalitions of philanthropy, government, the private sector, and patient capital can work together to mitigate risk around platform deployment and maintenance. Right now, no single institution is equipped to pool funding from across sectors to finance a comprehensive set of digital public goods. Comprehensive funding solutions should address that market failure.
• Digital services taxes and revenue from the privatization of bandwidth and other public assets are potential sources of reliable long-term public funding for DPGs.
• A three-sided marketplace for digital public goods could bring together governments, technologists, and funders, while establishing a central role for civil society to facilitate responsible platform development, deployment, and governance.
• Better coordination and updated procurement policies would help governments fund high-quality, low-cost open source solutions. Too many jurisdictions are rebuilding expensive, siloed digital systems to manage data, digital identity, benefits access, and payments instead of innovating together.
• Common standards can help ensure that available funding supports modular, interoperable solutions. Without standards, there is a real risk of fragmentation in the DPG ecosystem. Standards should also account for the diverse environments in which DPGs need to operate.
• Funding frameworks need to recognize the full life cycle of DPGs. Solutions should address the need for resources to fund platform design, development, deployment, scaling, maintenance, and governance. Platforms will likely draw on different types of funding at different stages of development. Communities are more comfortable investing in open source digital platforms that have clear long-term plans for financial sustainability.
• Funding architecture should prioritize social inclusion to ensure that DPGs can meet the needs of individuals in high- and low-capacity environments.

Digital public goods represent a tremendous opportunity that will transform the public sector as we know it. New America’s DIGI team will be convening regular meetings of an informal contact group to galvanize work on funding architecture in the runup to the UN General Assembly and Summit for Democracy. We look forward to working with the incredible community of partners uniting to seize this moment.