How ministries and regulators convene a sector around one challenge

A ministry or regulator convenes a sector well when it picks one problem that no single company or agency can solve, uses its convening power to bring the right players to the table, offers something only government can offer (data, rule flexibility, a first customer, a clear future standard), and commits in advance to act on what works. Public bodies have a unique advantage here: when they call, people come. That same advantage is the main risk, because a convened challenge that ends in speeches and no change teaches a whole sector to stop answering.

This piece is about the convening role specifically. For the wider picture, see Ecosystem innovation. For a single time-boxed event run by several partners, see The ecosystem hackathon.

What government brings that no one else can

A company can run a challenge. So can a sector association. But a public body holds levers others do not, and a convened challenge should use at least one of them:

• Convening power. Competitors will sit in the same room if a ministry asks.
• Data. Government often holds the only complete view of a sector: registrations, licences, inspections, flows.
• Rules. A regulator can clarify, adjust or temporarily relax a rule so a new approach can be tested safely. The "regulatory sandbox" is the best-known form; the UK's Financial Conduct Authority opened one in 2016, and the Saudi Central Bank (SAMA) launched its own in 2018 for fintech firms.
• Purchasing. Government can be the first customer, which for a new solution can matter more than a prize.
• Standards. Signalling what will be required in future gives the sector a reason to invest now.

If your challenge uses none of these, ask whether a public body needs to lead it at all.

How to convene a sector, step by step

1. Choose a problem that belongs to the sector, not to you. A good convened challenge is one where the cause sits across many players: food waste through a supply chain, delays in a licensing journey, skills gaps across an industry. Build an ecosystem map of the sector around that problem before you announce anything. If your own agency's process is the main cause, fix it internally first.

2. Talk to the sector before you design the challenge. Interview a cross-section of players: large firms, small firms, startups, user groups, other agencies. Ask where the problem really sits and what stops them fixing it. A stakeholder map shows who has influence and who is affected; make sure smaller players are heard, not only the largest.

3. Frame one challenge with a measurable outcome. Use a problem tree to agree the cause, then write one how might we question and one outcome the sector would recognise: "halve the time from application to licence for a small food business". One challenge per round. A ministry that launches five challenges at once usually delivers none.

4. Decide what government will put on the table. Be explicit: which datasets you will open and how; which rules can be tested in a controlled way and under what safeguards; whether there is a purchasing commitment for successful solutions; what standard or policy might follow. This is the offer that makes the sector take the challenge seriously.

5. Set fair, transparent rules of participation. Publish who can take part, how solutions will be assessed, what support participants get, what happens to their IP and data, and how conflicts of interest are handled. In a regulated sector, participants need to know that taking part will not be used against them in supervision.

6. Run it in stages. A common shape: an open call; a shortlist; a development or testing period with real data or in a controlled environment; a decision. Use a roadmap to show the stages and dates publicly, and keep to them.

7. Test in the real setting, with safeguards. The point of a convened challenge is to learn what works in practice. Give shortlisted solutions a controlled test: a limited group of users, a defined time, agreed limits and monitoring. Agree in advance what would stop a test early.

8. Commit to act on the results. Before the challenge opens, decide what government will do if a solution works: buy it, change a rule, publish guidance, set a standard, fund scale-up. Write it down and say it publicly. This single commitment does more for participation than any prize.

9. Report back to the sector. Publish what you learned, including what did not work and why. A stakeholder communication plan keeps participants and the wider sector informed between stages. Use a KPI tree to connect the headline outcome to what each part of the sector can influence.

10. Plan the next round. Sector challenges build trust over time. The second round is easier to run, and draws stronger participants, if the first one visibly changed something.

Do's and don'ts

Do

• Pick a problem the sector already feels, not one only government sees.
• Put a real government lever on the table: data, rules, purchasing or standards.
• Hear small players and users, not only the largest firms.
• Publish rules, criteria and timelines, and keep to them.
• Decide in advance what you will do with a solution that works.
• Report what you learned, including failures.

Don't

• Don't launch with a ceremony and a long list of challenges.
• Don't let the largest incumbents design the challenge alone. They may prefer the problem unsolved.
• Don't ask participants to share sensitive data without clear protections.
• Don't use the challenge as a substitute for fixing your own process.
• Don't run a test without agreed limits, monitoring and a stop rule.
• Don't measure success by applications received. Measure what changed in the sector.

Illustrative example

Illustrative. A national food safety regulator in a European country wanted to reduce food waste in the hospitality sector. Restaurants, wholesalers and charities each said the same thing: surplus food could be donated, but uncertainty about liability and date labelling rules stopped them.

The regulator started by interviewing a mix of restaurant chains, independent cafés, two wholesalers, food charities and the local authorities that carry out inspections. An ecosystem map showed that the barrier was not logistics but confidence: nobody was sure what the rules allowed.

The challenge read: "How might we make it simple and safe for any hospitality business to donate surplus food on the same day?" The regulator put three things on the table: a written clarification of how existing rules applied to same-day donation, a controlled test period in two cities with agreed safety checks, and a commitment to publish official guidance based on what worked.

Fourteen proposals arrived, from apps that matched donors with charities to simple labelling kits. Five were tested over three months. Two worked well; one raised safety questions and was stopped early under the agreed rule. The regulator published guidance drawn from the test and announced a second round on supermarket surplus.

Questions people ask

What is a regulatory sandbox? A controlled arrangement in which a regulator lets firms test new products or approaches with real users, under agreed limits and close supervision, sometimes with specific rules clarified or adjusted for the test. Financial regulators made the idea widely known; it has since spread to other sectors.

How is a sector challenge different from a hackathon? A hackathon is an event lasting a day or a few days. A sector challenge is a programme lasting months, with stages, real-world testing and a government commitment to act on results. A hackathon can be one stage inside a sector challenge.

Who should take part in a government-led innovation challenge? Anyone who can contribute to the solution and anyone affected by it: large and small firms, startups, researchers, user groups and other public bodies. Publish the eligibility rules, and make sure the process does not favour only those with the resources to bid.

Where to go next

Start with an ecosystem map and a stakeholder map of the sector, then agree the cause with a problem tree and lay out the stages on a roadmap. For the wider picture, read Ecosystem innovation, and for the event format, The ecosystem hackathon.