Five Reasons AI Could Rescue the Public Sector and Transform Government Services

Can artificial intelligence generate the improvements needed to deliver high-quality, affordable public sector services? The dire state of public finances in many countries fuels demand for change, while endless promises about the transformative impact of AI raise hopes—but this is not the first time technology has been touted as the public sector’s saviour, and citizens are wary of big promises and political agendas.  

Despite decades of promises, technology has rarely transformed government services in lasting ways. Nearly 15 years ago, my work gave me a close-up view of some of Europe’s largest public sector digital transformation projects. They succeeded in modernising back-office processes with new ERP systems, but at considerable cost and without radically altering how government is organised or the type of services delivered to citizens.

Political pressures, risk aversion, and the complexity of government services often hamper innovation and long-term investment plans. So does the public sector have the capacity, culture, and public trust needed for transformation this time?

So does the public sector have the capacity, culture, and public trust needed for transformation this time?

Somewhat to my surprise, our interviews left me optimistic that this time could be different, for five reasons:

1. AI offers greater scope for transformation

Previous waves of digital innovation focused on piecemeal back-office improvements, but AI has the potential to transform a wide range of diverse activities. Our research identified over 200 use cases, including sophisticated identification of tax fraud and rapid extraction of relevant information from regulatory documentation.

2. The experimental approach to AI plays to public sector strengths

AI projects tend to be scaled only once the use case has been proven. This approach to project management works in the public sector, where project managers with small teams can frequently deliver results instead of having to navigate the complexity of multi-year IT projects.

3. The public sector is getting better at IT project delivery

There is increased confidence in IT transformation projects—45% of survey respondents thought they were ahead of their private sector peers in implementing generative AI; just 25% thought they were behind. This progress reflects lessons from past projects, stronger digital infrastructure, and a culture of collaboration with the private sector and international peers, supported by knowledge-sharing initiatives like the European AI Alliance.

4. A skilled workforce may be available

The public sector often cannot compete with private sector salaries, but there is not yet a fixed market for certified AI talent. Public sector roles can attract early AI professionals by offering opportunities to develop expertise from projects that serve the common good—all at a moment when many private sector tech jobs face serious uncertainty. Many public sector leaders report progress in training staff in AI skills and ethics.

5. There is ambition for genuine transformation

The leaders we interviewed were innovative in their thinking and ambitious in their expectations of AI. Many are looking beyond process efficiencies to reimagine new ways of delivering services. The city of Amarillo, Texas, for example, is collaborating with the public on their pilot digital human, while France’s DINUM agency is coordinating public sector start-ups through its Beta.gouvr.gov program.

Transformation at scale rarely goes according to plan, but the developments in both technology and the public sector give me hope that this time meaningful change is possible.