Global study: AI-driven government productivity efforts can't underestimate culture

New research from Economist Impact, sponsored by SAS, explores the complex nexus of government productivity, AI and culture

CARY, N.C., Jan. 29, 2025 /PRNewswire/ -- For government productivity to flourish, culture and technology must both be prioritized. This was a key finding in a new Economist Impact report, sponsored by data and AI leader SAS, that examines the opportunities and obstacles of public sector productivity reform. The report, Reimagining the Future of Public Sector Productivity comes at a time when AI is already changing the nature of work and productivity across the commercial sector. Will public sector organizations be able to seize that opportunity to reach new levels of productivity and citizen service?

"Amid fiscal constraints and rising demands for public services to address complex challenges like aging populations, climate change and economic uncertainty, governments must act decisively to implement productivity reforms. For instance, the fiscal response to the Covid-19 pandemic in select high-income countries amounted to 21% of GDP, underscoring the critical role of government intervention in times of crisis.

Our research finds that while digital transformation is essential, it is not enough on its own. Success depends on adaptive organizational structures that overcome resistance to change and involve employees in the design and implementation of new technologies. Artificial intelligence offers the public sector the chance to transform how it serves citizens and enhance the experience of employees," says Jonathan Birdwell, Head of Policy & Insights at Economist Impact.

Key findings of the report, which is based on a survey of more than 1,550 government and public health care employees in 26 countries across the Americas, Europe, Asia Pacific and the Middle East, include:

• The critical role of digital transformation and organizational redesign in boosting public sector productivity.
• The top AI use cases explored by governments, including predictive analytics and cybersecurity/fraud prevention.
• The importance of incremental productivity reforms and the challenges posed by budget constraints.
• The significance of partnerships with external suppliers to streamline and improve processes, increase response speed and enhance delivery.
• The need for greater engagement with public sector employees in designing and implementing productivity reforms.

Culture and technology go hand-in-hand

The report found governments are realizing significant gains from investments in e-government, data-driven services and AI, but these alone are not enough to deliver change. The survey reveals that adaptive organizational design and digital transformation are the most important strategies to boost productivity - and nearly equally so. Additionally, the survey indicates that agencies that have embarked on digital transformation were more likely to have successfully implemented organizational reform.

Unfortunately, more than a quarter of respondents cite no current attempts to design adaptive organizational structures, nor to make investments in digital transformation, which could seriously hinder productivity improvement efforts.

"Technology alone won't unlock productivity in government," said Jennifer Robinson, Global Government Strategic Advisor, SAS. "But with a flexible culture that adapts to new innovations, incremental improvements in productivity over time can make a huge difference."

Governments are understandably cautious about risk-taking, with 70% of survey respondents agreeing that their organization is adopting new technologies only after they have been proven effective in other organizations. Additionally, governments have limited budgets and may lack the capacity to absorb new technologies. Data privacy concerns (75%) and budget constraints (64%) are also considered major/critical challenges to successful technology adoption. Also, 47% cited an inability to measure productivity as an obstacle to productivity reform.

While respondents acknowledged these barriers, an overwhelming majority (90%) of respondents see digital technologies as offering more benefits than risks to their organization.

AI takes center stage

Most respondents believe that AI will have a significant/critical impact in improving productivity within their organization over the next three years. The report explores the most promising uses of AI in government and includes real-world case studies from agencies around the world. The survey revealed that predictive analytics was the top current use case for AI, selected by 66% of respondents. The ability to predict and plan for risks is one of the most appealing use cases of AI given its power at simulating scenarios.

Another popular AI application was cybersecurity and fraud prevention, selected by 54% of respondents. The complexity of financial crime and money laundering, and the use of AI by sophisticated criminals, is forcing fraud fighters to enhance their own use of the technology.

Looking to suppliers to spark productivity

The research suggests that the procurement model for AI may need rethinking. AI often requires customization and ongoing updates, as opposed to traditional procurement models focused on a single off-the-shelf product or project. Additionally, procurement departments often manage multiple domains and may struggle to assess the quality of new technologies. Public sector hesitancy to adopt technologies has been further driven by unfamiliarity with software-as-a-service models and the complexity of managing data-intensive technologies

Technology providers can be valuable partners in this process. Almost half of survey respondents (49%) cited outsourcing to external suppliers as one of the most effective strategies to improve productivity.

Getting employees on board

Productivity reforms are doomed to fail if employees do not buy in, yet the survey shows the need for greater engagement. A minority of survey respondents said that employees and managers are primarily involved in determining needs (15%), selecting the type of technology (14%), and implementing the technology (36%). Public sector workers need to understand the benefits of new technologies, supported by training, and need to be empowered to provide feedback for continuous improvement. 

Productivity reforms are most effective when framed as enhancing the impact of government services on society, while improving employees' experience. In fact, survey respondents cited employee satisfaction (58%) as one metric used within their organization to measure productivity, followed by citizen satisfaction (56%).  

Productivity reforms can enhance the delivery of services via faster response time, streamlined communication and improved processes. These improvements enhance employee satisfaction by reducing backlogs and burnout and improve the citizen experience through quicker and easier access to services.

Reimagining the Future of Public Sector Productivity draws on a global survey of public sector employees, including in public healthcare and hospitals, and is supported by in-depth interviews with experts from academic institutions, government bodies, non-governmental organizations and international multilateral institutions. The report presents survey findings and qualitative insights, with recommendations to help stakeholders pursue ambitious but realistic productivity reform in central and local government.  

Read the full report and join SAS Executive Vice President Gavin Day along with Luis Felipe Montero, Brazil's former Secretary of Digital Government and current Chief Executive at CATENO, Kelly Ommundsen, Head of Digital Inclusion for the World Economic Forum, Morten Elbæk Petersen, Director of Denmark's National Health Portal and Jeremy Kingsley, Global Lead, Strategic Foresight, Economist Impact for an in-depth discussion of government productivity and AI in the Feb. 13 webinar, Unlocking global gains: Elevating public sector productivity through digital innovation.

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