The emergence of generative AI, alongside advanced autonomous and agentic systems, is transforming how government and the public sector innovate and operate.
Our findings reveal an actionable blueprint for governments and organisations aiming to leverage AI's potential to drive efficiency, reduce time-to-market and improve patient outcomes.
This report provides insights into how they can take a value-based approach to AI that helps to accelerate innovation, unlock new growth opportunities, and maximise the impact of their AI investments.
Reimagining government
Key insights
- Strategic barriers
- AI potential
- Operating models
- Quotes
Strategic barriers hold the government sector back, with internal resistance and privacy risks the leading challenges
Government is in the early stages of AI, but belief in the transformative potential of AI is high
63%
have been using AI for less than two years.
16%
state that leaders fully trust AI, only 12% state that AI is integral to their organisation.
79%
agree that organisations that embrace AI will have an advantage over those who do not.
Operating models are proving to be a major inhibitor to widescale adoption
56%
state that their operating model enables AI strategy alignment, but only 23% say their operating model enables this consistently.
26%
have a mostly cloud-based technical infrastructure, and 55% do not have a unified data warehouse of enterprise data management.
Realising value from your AI transformation journey
To address these challenges, KPMG introduces the three phases of AI value — a framework designed to guide technology companies through the AI adoption journey. This phased approach can unlock significant value through AI-driven transformation, driving smarter and more innovative governments.
Click on each of the phases below to find out more.
Enable
The Enable phase focuses on enabling people and building AI foundations. Organisations appoint a responsible executive, create an AI strategy, identify high-value use cases, boost AI literacy, align with regulations and establish ethical guardrails. AI pilots are launched across functions, while cloud platforms and pre-trained models are leveraged with minimal customisation.
Embed
The Embed phase integrates AI into workflows, products, services, value streams, robotics, and wearables, delivering greater value. A senior leader drives enterprise-wide workforce redesign, re-skilling and change, embedding AI into operating models with a focus on ethics, trust and security. AI agents and diverse models are deployed, supported by cloud and legacy tech modernisation, while enterprise-wide data enhances operations.
Evolve
The Evolve phase evolves business models and ecosystems, using AI and frontier technologies like quantum computing and blockchain to solve large sector-wide challenges. AI orchestrates seamless value across enterprises and partners. Emphasising ethics and trust with real-time security, this phase uplifts human potential with broad and deep workforce training, fostering a creative, innovative and value-driven future.
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