RESEARCH REPORT

In brief

In brief

  • Maximising AI’s potential requires a concerted effort by the GovTech ecosystem—government, startups, medium and large companies, and civil society.
  • By 2035, AI could create as much as US $939 billion in economic value in the sector across 16 major developed economies.
  • In Europe, 86 percent of public sector leaders surveyed said they intend to increase or significantly increase AI spending in the coming year.
  • GovTech stakeholders can ensure that AI is used responsibly by adopting safeguards to minimise risk and developing formal governance structures.


Maximising AI’s potential in the public sector

AI1 is advancing the way the public sector serves its constituents. In Singapore, AI-powered technologies are scanning the dark web to identify patterns that can help law enforcement officials to understand the illegal drug market, and are giving rise to "digital twin" models (virtual replicas of physical spaces) that simulate emergency situations.2 In other cities and regions around the world, similar stories are emerging: AI activities range from alerting refuse collectors when bins are full, and predicting the need for infrastructure repair, to improving energy efficiency through smart thermometers and powering advanced military security systems with drones. And AI is still in its early days.

Investing in innovation

Governments ready to seize this growing opportunity are ramping up their spending on AI. According to Accenture’s 2019 survey of 300 public sector leaders in Europe, 86 percent said they intend to increase or significantly increase AI spending in the coming year.3 They’re also significantly optimistic, with 90 percent expecting a "medium to high" return on their investments.4 Market researcher IDC predicts that central/federal governments will see the second largest AI spend of any industry by 2023 (33.6 percent).5 By 2035, AI could create as much as US $939 billion in economic value in the sector across 16 major developed economies.6

Accenture’s research into AI adoption in Europe also shows that while the region is investing in AI, public service organisations in Europe are funding only five to ten completed AI use cases and they are struggling to scale. Explore the SlideShare to learn what agencies should be doing to get more from their AI investments.

The Ecosystem approach

Each participant in the GovTech ecosystem—government, startups, medium and large companies that have the capability to scale, and civil society—can ramp up efforts to support the whole. Specifically:

Governments

Public sector organisations can use AI to foster innovation in services—and in turn drive further demand for AI—by making the GovTech market more attractive to startups. For example, they can streamline the contracting process by simplifying procurement rules and reducing the lead time on awards.7 They can also encourage open dialogue and improvements around procurement and innovation. Ramping up government-to-government collaborative efforts will help.

Governments will need to keep pace with training and reskilling and strengthen paths to employment as more humans and machines work together. Government should also develop a formal AI governance structure to protect public welfare and mitigate against unintended consequences.

The potential to use AI for positive change is great. However… a GovTech ecosystem must work together to develop innovative solutions.

Startups

Startup firms will need to carve out a niche for themselves as indispensable sources of innovation and new ideas for all ecosystem partners. Globally, the United States has been home to the majority of GovTech deals over the past five years at 67 percent. Within Europe, the United Kingdom, France and Sweden appear to be promising markets (commanding 42 percent, 11 percent and 8 percent of European GovTech deals, respectively).8

Accenture’s survey of European public sector leaders indicates that there’s potential to capture latent demand for AI-related GovTech products that can enhance customer experience, reduce fraud and improve risk management. AI startups can also offer early warnings to the rest of the AI ecosystem on issues such as potential bias. This kind of collaboration—working with governments and civil society in sandbox environments or living labs to identify and address problems in their infancy before they morph into full-blown crises—is smart business.

Medium and large companies

Bringing generous R&D budgets and powerful organisations to innovate for GovTech is just one way that medium and large companies can stimulate the market. Medium and large companies also have a significant role to play as the leaders and integrators of responsible innovation. One way to do this: embracing sensible regulation, both formal and informal.

Large and medium-sized companies have a wide-lens view across industries and business functions. They can use this perspective to great effect to support the GovTech arena by bringing next-level oversight and safety insights to large-scale solutions. Responsible innovation goes beyond proactive anticipation and identification of risks, to understanding and planning for when these risks are magnified.

Civil Society

History suggests that governments and companies can be well served by the individuals, charities, universities and other nonprofit institutions that seek to advance public-spirited goals, such as assisting the disadvantaged.

In that spirit, academics can broaden their efforts to decode companies’ algorithms, detecting harmful biases and making AI explainable. Journalists can commit to studying the market deeply as it grows, with an eye towards exposing misuse and raising awareness of unintended negative effects of AI in the sector. Community organisations can commit to increasing their knowledge of the technology, lobbying politicians, as needed, for better regulation and protesting against companies that commit abuses.

Towards responsible AI

AI will transform the future of government. Each stakeholder in the GovTech ecosystem has a part to play, and Europe can take a lead role thanks to the efforts already underway by the European Commission in addressing the complexities of AI.

By taking action in these ways, GovTech ecosystem stakeholders can work together to make the technology-enabled future responsible and prosperous.

1 Accenture views AI as a constellation of different technologies—from machine learning to natural language processing—that can be brought together to enable computers to "think, learn and act."

2 Singapore government website; Virtual Singapore

3 Accenture Survey of AI Adoption in European Public Services.

4 Ibid. Return is defined by "the amount of monetary benefit or quality improvements."

5 Worldwide Spending on Artificial Intelligence Systems Will Be Nearly $98 Billion in 2023, According to New IDC Spending Guide (IDC, September 2019)

6 Artificial Intelligence, Genuine Impact, (Accenture 2018)

7 GovTech: Europe’s Next Opportunity, (Accenture & PUBLIC 2018)

8 Accenture analysis based on CB Insights data.

Bernard Le Masson​

Global Managing Director – Health and Public Service, Management Consulting


Carl Ward

Group Technology Officer – Health and Public Service


Dr. Gabriel Bellenger

Health & Public Service Consulting Lead – Europe

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