New Report Finds Outdated Government Systems Are Blocking Gap Closing Startups from Solving Public Problems at Scale

Kapor Center's new P.R.I.M.E. Alliance report draws on insights from more than 60 entrepreneurs and investors across 3,000 public sector contracts and outlines a path to unlock faster public-private partnerships and $100.7 billion in annual economic gains

OAKLAND, Calif., March 24, 2026 /PRNewswire/ -- Kapor Center's new report, P.R.I.M.E. Alliance: Breaking Down Barriers: Overcoming Government Hurdles for Gap-Closing Founders, finds that gap-closing startups are already building solutions for urgent challenges across child care, housing, health care, education, workforce development, and financial stability, but outdated government systems often prevent those solutions from reaching the communities that need them most.

Produced by Kapor Center, this report is the inaugural effort of its new P.R.I.M.E. Alliance, a multiyear effort to bring together local and state governments with gap-closing startups to improve millions of American lives. The report draws on survey and interview data from more than 60 entrepreneurs and investors with experience across more than 3,000 public sector contracts in jurisdictions across the country. It examines the structural barriers that make it difficult for gap-closing startups to work with the government, even when their solutions are aligned with urgent public needs and could improve outcomes for families and communities.

"The U.S. does not have an innovation shortage. It has a systems problem," said Chike Aguh, head of innovation and strategy for gap-closing startups, Kapor Center. "Founders are building solutions right now for some of our country's most urgent challenges, but too often outdated government processes keep those ideas from reaching scale. This report makes clear that the barrier is not a lack of talent, ambition, or public need. It is the difficulty of navigating systems that were not built for speed, partnership, or impact."

The report also makes the economic case for action. It finds that if the United States made just a two percent improvement across key sector gaps, the result would be $100.7 billion in gains to the U.S. economy each year. Key findings from the report include:

• Government systems too often move too slowly for early-stage, gap closing companies trying to solve urgent public problems
• Founders repeatedly identified five major barriers: slow contracting timelines, fragmented communication, complex applications, fragmented licensing and permitting, and compliance burdens
• These barriers do not just slow companies. They delay access to solutions for families and communities
• A practical path forward exists when government and entrepreneurs work in partnership, as shown by the Michigan child care case study
• Even modest improvement could have major impact, with a projected $100.7 billion in annual economic gains tied to a two percent improvement across key sector gaps

"We believe innovation should be measured not only by what gets built, but by whether it expands opportunity and improves people's lives," said Freada Kapor Klein, Ph.D., co-chair of Kapor Center. "This report shows that the country does not need to wait for new ideas. Many of the solutions already exist. What we need are better pathways for public leaders and gap closing founders to work together so those solutions can reach the communities they were built to serve."

The report outlines a framework for action that calls on public leaders to connect founders to existing business support services, reimagine procurement and compliance processes, and reform outdated laws and regulations that unnecessarily slow partnership and impact.

At a moment when communities across the country cannot afford slower progress on issues like child care, housing, education, and economic mobility, P.R.I.M.E. Alliance is intended to serve as a roadmap for policymakers, entrepreneurs, investors, and advocates seeking faster, more effective ways to deliver results. For more information and to read the full report, please visit: https://www.kaporcenter.org/primealliance/.

About the Kapor Center
The Kapor Center is a recognized leader in the movement to enhance equity and inclusion in the technology and entrepreneurship ecosystem through increasing access to tech and CS education programs, conducting research on access and opportunity in computing, investing in community organizations and gap-closing social ventures, and increasing access to capital among diverse entrepreneurs. For more information on the Kapor Center and the Kapor family organizations, Kapor Foundation, SMASH and Kapor Capital, visit www.kaporcenter.org.

SOURCE Kapor Center