Emerging technology is a key priority for government and public sector despite major skills shortages

Public sector executives are remaining positive about the value of their investments into digital transformation, despite challenges with talent, regulation, and trust, a recent KPMG International study finds.

One hundred and twenty public sector technology professionals were surveyed as part of the KPMG Global Tech Report 2024 which reveals that 85 percent are prioritising emerging technologies over maintaining legacy ones, yet two-thirds (66 percent) believe they lack the talent they need to bring their digital transformation plans to life. 45 percent also report they are struggling to keep up with the pace of change versus 54 percent of private sector respondents.

Overall, the new research shows a sign of increasing sophistication within public sector technology programmes, with the public sector benchmarking marginally higher than private sector peers on progress on XaaS, cyber security, Web3 and data and analytics strategies. However, when it comes to AI and automation, only 28percent reported progress versus 31 percent across the entire sample.

The rate of progress with emerging technologies is also not consistent across all public sector entities. According to the study, there's a disparity where some government bodies are making quick advancements, whereas others find it challenging to reach their goals. Senior leaders in government express concerns that their advancement is beginning to level off and have revealed a gap in technology-specific skills or knowledge.

The urgency to adopt AI has pushed the emerging technology up the agenda in government departments with 45 percent of respondents confirming they are experimenting with AI in controlled groups, and many expect to democratise their approach as they gain experience. Two-thirds of government technology leaders say they expect their government to invest in AI and automation within the next year.

Yet, the race to embrace AI also exposes various challenges in its adoption including the trust, transparency, and regulation of these new technologies, as well as the lack of skilled professionals to develop, deploy, and manage AI solutions.

Building public trust in AI is essential for its successful adoption and governments should be transparent about how it is used and ensure its decisions are fair and unbiased. Governments should also be the regulator of such technologies, yet the survey found that leaders in governments across the globe were only eight percentage points more likely to say they see themselves as risk guardians when it comes to AI, than the overall sample.

According to a separate study, Trust in Artificial Intelligence conducted by KPMG Australia last year, only 33 percent of global respondents report a high level of confidence in governments’ ability to develop and use AI in the best interest of the public, with trust ranking below that of big tech companies when it comes to developing and adopting AI.

According to the research, leaders are focusing on understanding how generative AI will impact productivity, where it will enable human capacity to be refocused onto more value-added tasks, and where it might influence service delivery. Already, more than two-thirds of the survey respondents say they are using AI to fill skill gaps (68 percent in public sector versus 73 percent overall respondents). However, further progress may be hampered (ironically) by a lack of AI skills.

But there are signs of a mindset shift when it comes to getting the workforce future ready. According to the Forrester Opportunity Snapshot commissioned by KPMG UK in February 2024, nearly three-quarters of government leaders say they are prioritising the training of employees and executives in digital skills.

Dannielle McAllister,
Global Media Manager, KPMG International

T: +44 7704675753
E: dannielle.mcallister@kpmg.co.uk

The study is based on a survey of 2450 executives from 26 countries and territories across Europe, Middle East and Africa, the Americas and Asia Pacific.

The government and public sector cut includes 120 respondents (60 percent from Europe, Middle East and Africa, 21 percent from Asia Pacific and 19 percent from the Americas). Three quarters of respondents represent organisations with more than 1,000 employees and 50 percent hold C-Suite roles (CIOs, CTOs, CISOs, Chief Digital Officers, Chief Data Officers, and Chief AI Officers). The remainder hold SVP or senior technology roles in their organizations. More information can be found on this proprietary survey in the KPMG Unlocking government’s technology future report.

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