How could AI improve productivity within the public-sector?

Efficient delivery of public services is vital for economic growth and social well-being, making productivity gains in the public sector critical. Government spending accounts for about one-third of GDP and one in five workers employed globally work in the public sector. So even modest improvements to public-sector effectiveness can yield substantial benefits. Increased productivity enables citizens to lead healthier, more fruitful lives and allows businesses to alleviate pressure on employees by creating greater efficiency and innovation.

Digital-transformation initiatives present promising models for elevating public-sector productivity. Estonia’s e-government system integrates essential services—from banking to social-security applications and tax filing—through a single online platform. Indonesia’s Jakarta Kini (Jaki) “super-app” offers similar access to public services and information, and effectively uses predictive analytics to anticipate flood risks, supporting a preventive approach to dealing with climate threats. Meanwhile, Britain’s £3.4bn investment in health-system digitisation is expected to deliver £35bn in productivity gains by 2030, underscoring the long-term potential of digital solutions. And by linking digital identities across databases, governments can gain demographic insights that allow for data-driven policies, optimised resource allocation and targeted responses to social challenges.

But the path to productivity gains is not without its challenges. Governments face unique constraints—budgets are tight, their risk tolerance is low, and they must uphold stringent regulatory and ethical standards while delivering consistently high-quality services citizens expect. To realise the full potential of digital innovations, public-sector entities must navigate complex legacy systems, upskill their workforces in new technologies, and build or maintain robust digital infrastructure that is secure and trustworthy.