Navigating the Adoption of AI by the Public Sector

AI, its impact on public services, and the business models underpinning its procurement.

SwissCognitive Guest Blogger: Eleanor Wright – “Navigating the Adoption of AI by the Public Sector”

Perfectly positioned to transform government efficiency and public services, governments globally are investing heavily in AI. From the UK’s plan to ramp up AI adoption to the Emirati investment in project Stargate, no government wants to be left behind.

AI however has more to offer governments than transforming public services, and government contracts will accelerate AI companies to industry dominance.

The public sector adoption of AI will require infrastructure, expertise, and a risk appetite. Data centers will be built, and vast amounts of energy will be used. Beyond the financial and material investment, engineers will be needed to code and develop these systems, and government expertise will be required to procure and integrate AI into antiquated legacy systems.

AI, however, has more to offer governments than transforming public services, and governments have the power to transform the business of AI. By gatekeeping access to data and procuring long-term contracts, public sector contracts can rapidly accelerate AI companies into big businesses and deliver the capital needed to beat out the competition, enabling a new wave of incumbents.

This model of public sector procurement from the private sector, however, may not be in the best interest of the citizens and taxpayers who will ultimately fund these large contracts. As AI efficiency and capabilities develop and public sector jobs are replaced, the greater the dependency will be on these companies to maintain critical public services. Thus, it is fair to assume that a critical point will be reached where these companies become too big to fail. If public services become reliant on the capabilities and services of a handful of providers, the balance of power will shift.

This dependency however should not discourage the adoption of AI by the public sector, but shape how contracts are procured and the business model underpinning them. Whether it be public-private partnerships, state-owned or implementing a cooperative structure, the business models underlying the roll-out of AI into the public sector could determine how AI is procured and implemented.

Whilst state-owned assets or companies can be inefficient, open to political interference, and lack a drive for innovation, they offer public-focused interest. Capital saved can be reinvested into the impact of public services and jobs that will have been outsourced to the private sector can be internally generated.

In the same way, state-owned companies operate in the interest of the public, public-private partnerships and cooperative companies may represent a strong middle ground between purely public or privately sourced contracts. Public-private partnerships will limit the amount of control private companies exert, and cooperative companies could enable the development and procurement of AI systems that meet a common economic and social goal.

It should be noted however that neither public-private partnerships nor cooperatives are fully resilient against political or private interference. Decisionmakers will always be susceptible to desiring increased control and securing financial gain.

Finally, another alternative may be to implement an open-source procurement model. By procuring solely from companies utilising open-sourced base models, public service contracts built on open-source models could help mitigate incumbency dominance and level the playing field. These base models could even use university knowledge and expertise to drive and maintain innovation.

No matter how public service agencies and providers choose to procure and maintain AI contracts, the business model underpinning the procurement both internally and externally will heavily shape the future of AI. A carefully thought-out business model could provide a strategic advantage and deliver greater value to stakeholders.

About the Author:

Holding a BA in Marketing and an MSc in Business Management, Eleanor Wright has over eleven years of experience working in the surveillance sector across multiple business roles