Examining Value Creation in Public Sector AI Implementation

Public sector AI adoption is rapidly increasing as AI-based solutions are implemented in various domains. These solutions typically address existing problems within the public sector organizations’ core missions and are generally seen as offering opportunities to increase operational quality and efficiency. This is for instance done through augmentation of decision-making processes and case handling activities. However, despite these aspirations, nascent research indicates that the anticipated outcomes often fail to materialize. The development and implementation of public sector AI-based solutions is laden with complex technological and legal challenges that often divert attention away from realizing actual business value. Drawing from formal and informal project documentation from a high-profile AI augmentation initiative at the Swedish Social Insurance Agency (SIA), we identify five dimensions that illustrate how technological advancement may prosper at the cost of business value realization in public sector AI initiatives.