GenAI

Public Sector Poised for $1.75 Trillion Boost in Annual Productivity by 2023, Propelled by GenAI

New BCG Series Explores How Governments Can Responsibly Leverage and Scale GenAI to Drive Maximum Public Impact While Improving Quality and Performance

BOSTON, Nov. 30, 2023 / — Many governments have already begun to experiment with generative artificial intelligence (GenAI), seeking to improve the quality and speed of government decision-making at scale and raise the efficiency and effectiveness of public policies, programs, and services. According to a new study by Boston Consulting Group (BCG), GenAI provides an unprecedented opportunity for governments around the world to deliver greater value and public impact for citizens, businesses, and governments at a time when public finances are challenged by slow economic growth.

BCG’s Generative AI for the Public Sector: From Opportunities to Value, estimates the productivity gains of GenAI for the public sector will be valued at $1.75 trillion per year by 2033. BCG’s estimate leverages inputs from Pearson-Faethm modeling and reflects productivity gains across all national, state or provincial, and local governments, and across domains such as legislative, administrative, courts, health care, education, transportation, and security.

While many might expect the application of GenAI to the public sector to lead to significant job cuts, BCG’s modeling predicts the impact will be more nuanced. Although certain efficiencies may result in a decreased demand for labor, governments will likely reinvest the gained productivity benefits to address citizens’ unmet needs or engage in higher value-added activities.

“While public sector adoption of GenAI is still in the early stages, the profound potential of this technology cannot be overlooked,” said Miguel Carrasco, global leader for BCG’s Center for Digital Government and a coauthor of the article. “The time to act is now. Public sector leaders must be prepared to experiment and innovate and accelerate the use of GenAI to maximize its substantial benefits for both government and citizens.”

The highest potential current GenAI use cases for public sector include summarizing documents and meetings, reviewing and drafting procurement contracts, customer engagement with citizens and businesses, and developing and testing software code. However, the conditions are not yet in place to leverage GenAI at scale and unlock its potential. BCG identified risks related to accuracy, reliability and control, privacy and confidentiality, bias, and intellectual property ownership that must be addressed before the full potential of GenAI can be realized in the public sector.

The article outlines use cases for GenAI from the perspective of senior executives in five types of government functions:

  • Policy and Programs. To better understand current public policy issues and challenges, as well as the current state and root causes, and to design more effective policy options, interventions, and programs; optimize policy settings; and strengthen deliberative processes
  • Service Delivery and Operations. To improve the quality and accessibility of public services to citizens and businesses, improve efficiency of operations, reduce risks, and continuously optimize allocation of resources to meet policy goals and objectives
  • Support Functions. To improve the efficiency of support functions, shared services, and corporate services; reduce overheads; and improve staff experience
  • Regulators. To improve integrity and compliance with regulations, reduce the cost of monitoring and oversight, reduce risks, streamline administration, and make it easier for citizens, businesses, and other stakeholders to comply and meet their obligations
  • Central Agencies. To develop, implement, and optimize whole-of-government strategies, priorities, policies, and standards, and to optimize funding and resource allocation to achieve government objectives

“Scaling GenAI across the public sector will deliver value from taxpayer savings, a more engaged workforce, and higher quality of public services,” said Richard Sargeant, a BCG managing director and partner and a coauthor of the article. “The productivity and personalization benefits for citizens of AI-powered government will be vital in an era where government spending around the world will be challenged by tougher economic conditions and increasing demands for public services. Moreover, governments will demonstrate the technological competence and innovative capacity that sustains the covenant of trust between citizens and the state.”

Download the publication here:
https://www.bcg.com/publications/2023/unlocking-genai-opportunities-in-the-government

Media Contact:
Eric Gregoire
+1 617 850 3783
[email protected]

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

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SOURCE Boston Consulting Group (BCG)

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