Generative AI could save governments nearly $1.8T annually
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A report says that U.S. governments could see more than $500 billion in productivity gains. Those with a “fast technology adoption curve” stand to benefit the most.
Few technological advances in recent years have produced as much public excitement as generative artificial intelligence, and governments are scrambling to determine all the ways it could benefit them.
Just this year, dozens of states and localities have developed policies to guide its use. A raft of governors issued executive orders to ensure it is ethically employed and to mandate that agencies and departments in their states find the best uses for government employees.
The California Government Operations Agency published a report last month that said generative AI has “significant, beneficial use cases” for state governments, including helping employees work more efficiently and improving communication with residents.
Meanwhile, a growing number of cities have released policies on how their employees can use generative AI, with some encouraging their workers to “experiment responsibly.” All these early efforts, sure to accelerate next year, are with a view to governments taking advantage of the efficiency gains they expect to see from generative AI and a more automated future.
One recent report looks to put a monetary figure on the productivity boost governments worldwide could see from generative AI. The Boston Consulting Group says the new technology could bring in $1.75 trillion each year by 2033. Governments in the U.S. will likely see the biggest productivity benefit of $519 billion annually, says the report.
In an email, Steve Mills, the group’s global chief AI ethics officer, said governments with a “fast technology adoption curve” are likely to see the biggest benefits from generative AI in areas that include education, health care, social assistance, public administration, transportation and warehousing, and government operations.
“At a minimum, these tools could free up many valuable hours of a public servant’s time on simple and repetitive cognitive tasks and enable that individual to focus on other, higher-value activities,” the report says.
The United Kingdom is estimated to earn the next biggest productivity benefit at $128 billion, followed by Germany at $85 billion, according to the report These numbers, which combine state, local and national government productivity boosts, are calculated by using modeling and then triangulated with country-specific data on both the number of public sector employees and the average salary for those public sector employees.
Mills said generative AI offers the most promise in helping synthesize and analyze public comments and identifying common issues and suggestions. The technology therefore is “creating better and more effective policy in fewer iterations,” he said.
Generative AI could also be used to analyze transcripts from phone calls to identify frequently asked questions, issues or complaints and determine how services can be better designed to address those queries. Assistants powered by generative AI, like the one recently piloted in New York City, could help call center representatives navigate thousands of pages of policy and find answers more quickly.
Those small interventions can reduce demand on call centers and the duration of the calls they receive, “yielding happier citizens while also reducing costs,” Mills said.
Despite the hype that surrounds generative AI, the new technology also brings a lot of unknowns and risks like bias, data breaches and use by nefarious actors.
Governments can mitigate against these risks by establishing a framework for responsible AI use, as several state and local governments have already done. Mills said such policies encourage “responsible innovation.”
A recent report on generative AI and governments’ use by McKinsey & Company made a similar argument about the need for effective guardrails. The report said legislation, executive action and policies should continue to help minimize potential AI risks by “highlighting the negative aspects of AI, transparently communicating where AI is used in government and addressing the ethical aspects of AI usage.”
For agencies looking to adopt the technology, the McKinsey report lays out an eight-step plan. Among its recommendations is that governments start small and scale up, especially as data management is one of the top obstacles to implementing and scaling AI use cases.
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