Podcast 🎧 & blog: AI in Government to Drive Prosperity and Innovation

The AI reckoning is here, and that’s not just based on announcements and latest releases from top corporate actors in the field. Artificial intelligence is rapidly reshaping how governments serve their citizens, making processes more efficient, policies more targeted, and economies more dynamic.  

Among experts, few understand this transformation better than , former Chief Information Officer of Estonia, and now Advisor to the Deputy Prime Minister of Ukraine. You may find him where innovation is.  

Drawing from his experience in two nations that are widely acknowledged as digitally advanced, he presents a compelling view of AI’s transformative potential in governance. The challenges it brings, the practical steps needed to realise its promise – in this episode of the Digital Government Podcast, we do a deep dive into what the future holds for governments approaching AI. 

A New Era of Computing, or Just an Experimentation Phase? 

It was just at the (watch the keynote “Digging into the EU’s digital tiger” >>> https://vimeo.com/951057103) that, on stage, Ilves said that we are entering “an entirely new era of computing.” Tempering optimism with a healthy dose of realism, we should though take stock of the experimentation phase many governments find themselves in, today. “There’s no question that AI has the potential to redefine governance, but we’re not yet seeing its full impact across the board,” he begins with. 

Countries like the Netherlands, China, and even smaller nations like Estonia, all offer intriguing case studies. In the Netherlands, predictive analytics driven by AI are being used to improve policy decisions, from urban planning to resource allocation. Meanwhile, China leverages AI to optimise supply chains and city management at a scale unmatched globally. Estonia’s own endeavors, instead, look into using natural language processing to improve government communication with citizens – demonstrating, yet again, how smaller nations too can lead in digital innovation. 

But the challenge remains: experimentation alone is not enough. Next to enthusiasm, Ilves cautions against treating AI as a buzzword and urges governments to ask critical questions about its tangible benefits. “What problem are we solving? How does this improve the lives of citizens or the performance of businesses? These are the questions governments need to ask before rushing to adopt the latest technology.” 

AI in Action. Practical Benefits for Society and the Economy 

The potential of AI to drive economic growth and social equity is big, but it depends on governments applying it effectively. In Ukraine, even amid the adversity of russia’s aggression, AI has been deployed to support critical services. “There, AI is already offering a helping hand in areas like logistics, ensuring that scarce resources are distributed to the right places, even in wartime,” he shares. 

Starting from this example, we quickly notice that use cases can be numerous—even more so in peacetime. For example, leveraging adequate data infrastructures, countries may implement AI-driven systems for public procurement, significantly reducing corruption risks. “We’ve seen how automating these processes removes opportunities for bias while making evaluations faster and more transparent,” Ilves explains. 

Fast forward, Ilves estimates that AI – as soon as 2030, potentially – will enable governments to offer entirely new kinds of services. Such as real-time feedback mechanisms that allow policies to adapt dynamically to citizen needs. “Imagine a system where you don’t have to wait years for the results of a policy to be evident. Instead, governments can adjust on the fly, ensuring better outcomes.” Continuously and consistently. 

Overcoming Challenges – Bias, Trust, and Implementation 

But despite its promises, AI also brings risks. As Ilves points out, bias in algorithms is a persistent problem, particularly in high-stakes applications like housing allocation or healthcare. “These decisions directly affect people’s lives. So, if the data feeding the AI is flawed, the outcomes will reflect, and even amplify, existing inequalities,” he warns. 

Another significant challenge is public trust. Citizens are increasingly concerned about how their data is used, particularly in AI-driven systems – known to be reliant, for their effectiveness, on huge amounts of information. On that end, transparency and accountability are essential. “Governments must explain how these algorithms work, but also set mechanisms in place for citizens to gain insight into decisions, or even challenge them where suitable and applicable.” 

Knowledge and risk aversion are all part of the preparatory work required to implement AI duly. The recommendation here is that governments prioritise education and capacity-building. This means training public sector employees and ensuring that the broader population understands AI’s capabilities and limitations. Governance frameworks including ethical guidelines, and mechanisms for accountability, serve as a model for nations looking to integrate AI responsibly.  

Resilience and Collaboration Help Shape the Future of AI 

Looking ahead, international collaboration in addressing the challenges and opportunities of AI will be key. In that sense, Ilves praises efforts like the European Union’s AI Act, which seeks to harmonise standards – as long as, of course, they don’t critically thwart innovation. “AI challenges don’t respect borders. Cybersecurity, misinformation, and ethical considerations are all issues that require international standards underlying differing national approaches,” he says. 

Concluding with a note on Ukraine, we learn that the focus is and will be twofold: addressing immediate needs, while ensuring the sustainability of the digital achievements so far. To do so, “The Ministry of Digital Transformation of Ukraine is building on the progress of the past five years to create a resilient digital ecosystem. We’re not just thinking about the next year or two. We’re laying the groundwork for a system that can evolve and endure,” he explains. 

Ilves’ message to public sector leaders worldwide is clear – the future of governance will be shaped by how governments harness AI. “Because the real question isn’t whether AI will play a role. It’s whether we’ll use it to build systems that are fair, efficient, and focused on improving lives, beyond just public sector operations.” 

Author: Federico Plantera

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