Governments are racing to deploy AI. Most have the foundations, but struggle to translate them into faster, smarter execution without losing public trust. BCG's Miguel Carrasco and Daniel Selikowitz break down what separates the countries getting this right from those still stuck — and what every leader can take from their example.
You’ll Learn:
Why AI governance frameworks are quietly becoming the biggest barrier to AI deployment
How to tell the difference between necessary caution and unnecessary bureaucracy
How and why some countries are already getting AI governance right
Learn More:
Trust Imperative 5.0: https://on.bcg.com/3QO3fOm
BCG’s Latest Thinking in Public Sector: https://on.bcg.com/4f69kis
Meet the Experts
Miguel Carrasco, BCG Managing Director & Senior Partner: https://on.bcg.com/4gGH8Uz
Daniel Selikowitz, Managing Director & Partner: https://on.bcg.com/4oMRKTY
Watch The So What from BCG on YouTube: https://www.youtube.com/playlist?list=PLMJgyXjV5gMI9JV-GcF_D1Y6zyf1Eab_0
Chapters
(0:00) AI Is Already in Government. Here's Where You'll Find It.
(3:12) Public vs. Private: Why the Stakes Are Different
(4:40) What Leaders Are Saying Across Industries
(6:15) What Role Does Fear Play in AI Adoption?
(8:14) Inside Governments Deploying AI
(9:55) How Are Governments Governing AI?
(11:56) How Do Countries Compare on AI Adoption?
(13:37) Useful Caution Vs. Unnecessary Bureaucracy in AI Implementation
(15:42) Who Is Keeping Pace with AI Innovation?
(16:46) What Private Sector Leaders Can Learn from Governments
(19:34) What Should Leaders Do Now?
- What we wanted to achieve
Speaker:through this report was really look at
Speaker:how are governments applying risk
Speaker:and assurance frameworks in practice.
Speaker:The last edition that we did looked at AI
Speaker:and the extent to which
AI could help accelerate
Speaker:and continue to sort of
build trust in government.
Speaker:And this time around, what
we wanted to focus on was
Speaker:the voice of the practitioners
Speaker:and public servants within government
Speaker:who have been trying
to build and deploy
Speaker:these sorts of use cases and
applications in practice.
Speaker:- If I were to describe
the archetypal mood
Speaker:of these discussions
that we're having,
Speaker:it's half extreme optimism and excitement
Speaker:and half powerful frustration.
Speaker:And the conversation often
begins with, "Here are all
Speaker:of the things that I can
see that are possible,"
Speaker:and then quickly we'll segue into,
Speaker:"but we've had a pilot that's
been stuck in production
Speaker:for 12 months," or "We have
a package of programs,
Speaker:but they're caught up
in a risk process,
Speaker:and we just can't
get those approved."
Speaker:- Welcome to "The So What from BCG,"
Speaker:the podcast exploring the big ideas
Speaker:shaping business, the
economy, and society.
Speaker:I'm Georgie Frost.
Speaker:Governments around the world
are investing heavily in AI
Speaker:with the promise of better
services, faster decisions,
Speaker:and higher productivity.
Speaker:But the challenge of turning AI ambition
Speaker:into real-world delivery
isn't unique to governments.
Speaker:Organizations everywhere
are wrestling with
Speaker:how to scale these systems responsibly,
Speaker:consistently, and at speed.
Speaker:So what can leaders in
every sector learn from
Speaker:where countries are succeeding
and where they're struggling?
Speaker:Well, joining me are
Miguel Carrasco,
Speaker:member of BCG's
Responsible AI Council,
Speaker:and Daniel Selikowitz,
Speaker:who leads BCG's government
finance segment globally.
Speaker:Miguel, Daniel, welcome.
Speaker:Before we talk about your report,
Speaker:just explain, if you would,
Speaker:how AI is actually showing
up now in the public sector.
Speaker:Where might we encounter it?
Speaker:- So I think AI is already there
Speaker:in the public service around the world.
Speaker:Sometimes it's there in ways
that are clearly visible
Speaker:to citizens or to businesspeople.
Speaker:That might look like
a chatbot on a website
Speaker:or an agentic smart search that helps you
Speaker:to navigate your tax
compliance obligations
Speaker:or healthcare payer benefits.
Speaker:In other cases, AI shows up
in ways that are invisible
Speaker:to citizens but no less important
Speaker:and valuable to those
in the public service.
Speaker:That might look like summarization
Speaker:or synthesis of a complex policy document.
Speaker:It might look like call
transcription for an agent
Speaker:working in a government contact center
Speaker:interacting with citizens.
Speaker:So there's many different ways,
Speaker:just as there are in the private sector,
Speaker:that AI is showing up in government.
Speaker:- Yeah, I think what we're
hoping to see though is more
Speaker:of the citizen-facing
and direct engagement
Speaker:where, you know, it
could really help improve
Speaker:and make it easier for citizens
Speaker:to navigate sometimes the
complexity of government.
Speaker:- Daniel, you mentioned there
about the private sector.
Speaker:Where does it show up in a way
that's, that's quite similar,
Speaker:and where does it differ do you think?
Speaker:- It's a great question.
Speaker:I mean, I think in terms
of the actual use cases
Speaker:and the value that can
be unlocked through AI,
Speaker:there are far more
similarities than differences
Speaker:between the public and private sector.
Speaker:So citizen-facing
applications like the ones
Speaker:that Miguel mentioned or
that I discussed--
Speaker:chatbots, smart search,
Speaker:ways of streamlining
the client experience--
Speaker:those are equally applicable
between government
Speaker:and, say, a large financial
institution or a telco.
Speaker:I think where there is the
most obvious difference is
Speaker:what's at stake when things go wrong.
Speaker:For those who are working
in private corporations,
Speaker:there is more room, I think, to test,
Speaker:to try new things with AI,
Speaker:to learn from failures,
and to pivot.
Speaker:And there may, of course,
be consequences
Speaker:for customers and for shareholders,
Speaker:but those are generally
somewhat contained.
Speaker:In a government context,
Speaker:there's a lot more at
stake if things go wrong,
Speaker:and there can be,
of course, widespread
Speaker:and quite deleterious
outcomes if AI makes mistakes
Speaker:with eligibility
for benefits programs
Speaker:or with the quantum of
a benefit that's paid.
Speaker:So I think, understandably, citizens
Speaker:and governments want to hold
a higher bar when it comes
Speaker:to ensuring that we're
being thoughtful
Speaker:about where, how, why
AI is being used.
Speaker:- I want to dig into
that in more detail,
Speaker:but before I do, you speak to
leaders across the board,
Speaker:private, public sector, both
of you do, across the world.
Speaker:What are they saying to you?
Speaker:What is top of mind, biggest concerns,
Speaker:greatest opportunities, Miguel?
Speaker:- I think what we're seeing
at the moment is, you know,
Speaker:leaders are excited about the opportunity
Speaker:that AI could have,
both in terms of
Speaker:improved services.
Speaker:It could help in terms of
even designing policies
Speaker:and programs in government.
Speaker:The thing they're trying
to navigate is
Speaker:how to move forward responsibly
Speaker:without being overly cautious.
Speaker:And the challenge they're
having is navigating some
Speaker:of the frameworks and processes
Speaker:and tools that have been put in place,
Speaker:which are sometimes overlapping
Speaker:or inconsistent or unclear.
Speaker:- Daniel, what are leaders saying to you?
Speaker:- I think that's right.
Speaker:If I were to describe the archetypal mood
Speaker:of these discussions
that we're having,
Speaker:it's half extreme optimism and excitement
Speaker:and half powerful frustration.
Speaker:And the conversation often
begins with, "Here are all
Speaker:of the things that I can
see that are possible,"
Speaker:and then quickly we'll segue into,
Speaker:"but we've had a pilot
that's been stuck
Speaker:in production for 12 months"
Speaker:or "We have a package of programs
Speaker:that we'd really love to see implemented,
Speaker:but they're caught up
in a risk process,
Speaker:and we just can't
get those approved."
Speaker:- It's interesting, Daniel,
when you were saying that,
Speaker:you said, "50% excitement,"
Speaker:and in my head and you went "50%,"
Speaker:and I said "fear" in
my head, "trepidation,"
Speaker:and you went,
"no, frustration."
Speaker:So there's not an element of,
you know, trepidation, fear;
Speaker:it's just frustration or excitement?
Speaker:- I think certainly
there is trepidation,
Speaker:and maybe that's implicit
in both of those things.
Speaker:So, you know, certainly I think in,
Speaker:in government in particular,
Speaker:people do keenly feel the anxiety
Speaker:around what could go wrong
Speaker:and, of course, the
responsibility to citizens
Speaker:and to taxpayers of doing
things in the right way.
Speaker:But I think that the view is generally,
Speaker:and we'll get into it
soon I'm sure, that a lot
Speaker:of those fears have been
very well documented
Speaker:and inculcated in frameworks
and governance mechanisms,
Speaker:so I don't think there's too
many people that we speak with
Speaker:who feel that those fears are
not being adequately looked at
Speaker:and addressed.
Speaker:The, the concern I think
is more whether there's,
Speaker:we're erring too much on the side of fear.
Speaker:- In some of our research
that we've done as part
Speaker:of BCG's global digital government survey,
Speaker:we've asked people questions
Speaker:about their usage of AI
Speaker:and also whether they see the
benefits outweighing the risk.
Speaker:And I think what, what we can see
Speaker:through some of that data is
Speaker:that the more that
people use and adopt AI,
Speaker:the less fearful they become
Speaker:and the more they sort of
understand the potential
Speaker:and the capabilities,
Speaker:and some of the, you
know, the trepidation
Speaker:or the fear that they
might feel of the unknown
Speaker:and uncertainty dissipates
as maturity increases
Speaker:and people sort of adopt and use it.
Speaker:And I think that's also
what we're finding, too,
Speaker:in government,
in the public sector.
Speaker:The more that public servants
embrace the technology
Speaker:and use the technology
as part of their work,
Speaker:some of the fear factor disappears.
Speaker:- Well, let's talk a bit more
Speaker:about the latest BCG
"Trust Imperative 5.0" report.
Speaker:You looked across
a range of countries
Speaker:at how governments are building
Speaker:and applying AI governance.
Speaker:Tell me more about it.
Speaker:What were you looking for,
Miguel? What did you find?
Speaker:- What we wanted to achieve
Speaker:through this report was really look at
Speaker:how are governments applying
Speaker:risk and assurance frameworks in practice.
Speaker:So in the Trust Imperative
series, together
Speaker:with Salesforce, we've been
looking at the question
Speaker:of the relationship between
citizens and government
Speaker:and, in particular, some of
the things that help build
Speaker:and erode trust in government.
Speaker:In the previous editions
of the series,
Speaker:we've looked at the importance
Speaker:of good customer service experience,
Speaker:the extent to which personalization
Speaker:and other things sort of
drive trust in government.
Speaker:And the last edition
that we did looked
Speaker:at AI and the extent
Speaker:to which AI could help
accelerate some of that.
Speaker:This time around, what
we wanted to focus on was
Speaker:not so much the voice of the citizen
Speaker:but the voice of the practitioners
Speaker:and public servants within government
Speaker:who have been trying to build and deploy
Speaker:these sorts of use cases and
applications in practice.
Speaker:And the sort of questions
that we were looking at was,
Speaker:you know, these risk assurance frameworks
Speaker:that have been established,
are they working in practice?
Speaker:What's working well?
What's not working well?
Speaker:How could they be improved?
Speaker:- What's the common pattern
in how governments are trying
Speaker:to govern AI?
Speaker:- So I think the headline message
Speaker:that we found in the report was
Speaker:that many governments
have already put in place
Speaker:the foundational elements,
so principles
Speaker:for ethics and transparency,
frameworks,
Speaker:risk assessment models,
Speaker:accountable official roles,
and things like that.
Speaker:The challenge, I think, has been more
Speaker:at the operational level.
Speaker:So all of the practitioners
Speaker:and people who are trying
to apply these frameworks
Speaker:and tools told us that they are
Speaker:sometimes facing challenges
with the lack of clarity
Speaker:or inconsistency
Speaker:or ambiguity in definitions
Speaker:where roles have been established
Speaker:but the accountabilities
have been unclear,
Speaker:the processes are not very well defined,
Speaker:and sometimes they have
to navigate quite a lot
Speaker:of different requirements.
Speaker:One of the practitioners
told us that they had
Speaker:in that process, you know,
Speaker:to navigate 71 different
points in the process
Speaker:where people were asking for the same
Speaker:or similar information.
Speaker:The Japanese government, for example, has
Speaker:a multistage process for AI,
Speaker:which has four different stages,
Speaker:initially with a sandbox or pilot,
Speaker:then moving to a control deployment,
Speaker:then moving to broader scale
with stronger oversight,
Speaker:and then finally ongoing monitoring
Speaker:with very clear triggers for reassessment.
Speaker:- Can I ask what countries
you were looking at?
Speaker:- So for this study, we
conducted interviews
Speaker:with people in 10 different
countries, some in Europe,
Speaker:in the US and Asia Pacific.
Speaker:And that was also supplemented by some
Speaker:of the research from BCG's
global citizen survey,
Speaker:which actually covers
40 different countries
Speaker:around the world.
Speaker:- So a really broad spectrum
Speaker:of countries, I suppose, across the world.
Speaker:Where were there similarities
in the challenges?
Speaker:Where were there things
that were perhaps unique
Speaker:to regions, Daniel?
Speaker:- If I were to characterize
some of the common points,
Speaker:firstly, I think admirably most
Speaker:of these governments had developed
Speaker:AI assurance frameworks
quite some time ago.
Speaker:And in that sense, they were
proactive in getting ahead
Speaker:of this technology and thinking
Speaker:through some of the risks and the benefits
Speaker:and how to manage that.
Speaker:But therefore, in most
cases, with few exceptions,
Speaker:these frameworks had not
been meaningfully updated
Speaker:to reflect just how far
Speaker:and how quickly the
technology has developed.
Speaker:We all know from our own
experience as consumers
Speaker:or in corporations
that we work in,
Speaker:the technology is developing
every week if not every day,
Speaker:and that's not how
Speaker:these governance frameworks have evolved.
Speaker:There are some,
for instance Singapore,
Speaker:that have grappled directly,
for instance, with agentic AI,
Speaker:but for the most part, these
frameworks predate a lot
Speaker:of the frontier models
Speaker:and other technologies
that exist currently.
Speaker:I think the other main commonality,
Speaker:as Miguel referenced, is
Speaker:that they tend to be
fairly broad brush
Speaker:across jurisdictions in terms
of how they think about risk.
Speaker:So the sorts of risk tiering
that you would expect
Speaker:to see here that would
enable much faster progress
Speaker:and movement on relatively
straightforward cases
Speaker:don't exist so much.
Speaker:One senior official
quoted in the report,
Speaker:who I think could have
been speaking for many
Speaker:of the countries that
we talked about, said,
Speaker:"We are exquisitely governing
Speaker:very basic, low-risk AI use cases
Speaker:to within an inch of their lives."
Speaker:- How do you tell the difference between
Speaker:what is genuinely useful caution
Speaker:and what is just unnecessary
bureaucracy, overgovernance
Speaker:getting in the way of yourself?
Speaker:- What looks like very onerous
Speaker:and unnecessary governance can later prove
Speaker:to have been essential
and vice versa.
Speaker:I think, in general, from
what we have observed,
Speaker:what you want to see in a
good governance framework is,
Speaker:first of all, that there
is some delineation
Speaker:based on the type of use case,
Speaker:the specific example or application of AI,
Speaker:and how much intrinsic risk
and complexity there is.
Speaker:So is AI actually being used to make
Speaker:or meaningfully inform decisions
Speaker:that have significant import,
Speaker:or is it synthesizing documents
Speaker:for internal discussions
or transcribing calls
Speaker:as just another reference point to inform
Speaker:internal decision-making
and consideration?
Speaker:Of course, it's always important
Speaker:and it always needs some kind
of governance and oversight,
Speaker:but you would want to see
different levels of process,
Speaker:different levels of onerousness
Speaker:in terms of approval
depending on those factors.
Speaker:- How do you get the
balance right there, Miguel?
Speaker:What does, I suppose, the
gold standard here look like
Speaker:in an ideal world?
Speaker:- The challenge, I think,
has been the definition
Speaker:or sort of lack of
clarity about how
Speaker:to assess whether something is
indeed low risk, medium risk,
Speaker:or high risk and the
judgment that's required
Speaker:from public servants and officials.
Speaker:And that guidance hasn't always
Speaker:necessarily been very clear.
Speaker:We heard of a very good example
Speaker:in the New South Wales government,
Speaker:which recently took its risk triage tool,
Speaker:which required sort of
very specialized expertise
Speaker:and a lot of data and evidence
Speaker:and took sort of more than 40
hours on average to complete,
Speaker:and I've simplified it now down
Speaker:into a process that people can do
Speaker:and can complete it in like 15 minutes.
Speaker:- Daniel, can you tell me a bit more
Speaker:about the Singapore example?
Speaker:- Sure. So Singapore published in 2019
Speaker:its Model AI Governance Framework,
Speaker:but since then they've made
a bunch of changes and updates
Speaker:that I think encapsulate
the point we're making
Speaker:around reflecting shifts
in the technology.
Speaker:So a year later in 2020,
they updated that framework
Speaker:to translate the
high-level principles
Speaker:into practical guidance
Speaker:for folks working
in the public service.
Speaker:In 2022, they added AI Verify
as a testing framework
Speaker:and toolkit to make it
even more practical.
Speaker:In 2024, they published a
new governance framework
Speaker:that specifically covered
generative AI.
Speaker:And now this year,
they've launched
Speaker:a Model AI Governance
Framework for Agentic AI.
Speaker:So while there's no perfect approach,
Speaker:I think the fact that Singapore
has continually evolved
Speaker:its governance mechanism,
both to make it more practical
Speaker:and specific for practitioners
Speaker:and to reflect changes in
this fast-moving technology,
Speaker:is admirable and something
Speaker:that other jurisdictions
can certainly learn from.
Speaker:- So what does this mean for
large organizations outside
Speaker:of government trying to
scale AI beyond pilots?
Speaker:What can they learn from governments?
Speaker:- Well, I think a lot of
the same lessons apply.
Speaker:There needs to be the
right focus on the risk
Speaker:of action and inaction.
Speaker:There needs to be the right
tiering of different risks
Speaker:with respect to AI.
Speaker:And most importantly, it needs
Speaker:to be really grounded
in the practicalities
Speaker:of individual use cases.
Speaker:What are we actually talking about?
Speaker:For instance, in a contact center,
Speaker:there is potentially a big
difference between an AI IVR
Speaker:that's actually answering calls
Speaker:and interacting with customers as opposed
Speaker:to AI-enabled transcription
that is keeping a record
Speaker:of what was discussed for later reference.
Speaker:You know, those could be
lumped together very easily
Speaker:as AI in the contact center,
Speaker:but they're really very
different in practice.
Speaker:- Miguel?
Speaker:- Well, we've covered
a few of them,
Speaker:but I wanted to maybe just
leave you with three others.
Speaker:So one is the,
Speaker:the clarity around, sort
of, accountabilities
Speaker:within the tech stack
Speaker:and making sure that the, you know,
Speaker:the questions are directed
to the right party overall.
Speaker:And what I mean by that is,
Speaker:you know, there's, there's things
Speaker:that the business owners
are responsible for,
Speaker:things that the, the LLM provider
Speaker:or the large language
model, foundation model
Speaker:should be accountable for.
Speaker:The second thing that I
think is also relevant
Speaker:for private sector is
investing in, in capability,
Speaker:in literacy, in maturity.
Speaker:So one of the things we've seen
Speaker:leading organizations do is
Speaker:put in place like a
certification framework
Speaker:with different levels.
Speaker:As people sort of become more
familiar with the technology,
Speaker:they can, they sort of can do
Speaker:the next level of certification,
Speaker:and that maturity and awareness,
Speaker:understanding,
literacy, et cetera,
Speaker:helps in the adoption of technology
Speaker:and diffusion throughout the organization.
Speaker:And then lastly, measurement--
Speaker:so how we track and measure
Speaker:what we're implementing.
Speaker:In terms of risk and assurance,
Speaker:it's not just about sort
of measuring the activity,
Speaker:but actually measuring
is it effective.
Speaker:So are we actually reducing risk?
Speaker:Are we reducing the number of escalations?
Speaker:How many things are being
approved first time 'round?
Speaker:And then on the benefits side,
Speaker:are we actually
adopting the solutions?
Speaker:You know, are people using them?
Speaker:Are we getting the benefits?
Speaker:Are we saving money?
Are we saving time?
Speaker:- Finally, what is the now what--
Speaker:the next immediate steps
Speaker:that leaders can take, Daniel?
Speaker:- So I think, very practically,
Speaker:one thing is understanding properly
Speaker:what your customers or
your citizens actually want
Speaker:and expect when it comes to AI.
Speaker:I think we tend to assume
sometimes that we know
Speaker:what the level of comfort is,
Speaker:but I think it's important,
as we have tried to with some
Speaker:of our recent research,
dig into what citizens
Speaker:and customers of your agency
Speaker:or your business actually
want, fear, expect
Speaker:when it comes to AI.
Speaker:And the second point I would
make is getting very specific
Speaker:in the way that you have discussions
Speaker:in governance forums,
in board meetings,
Speaker:in risk management sessions
about use cases in AI.
Speaker:In some cases,
that means upskilling,
Speaker:playing around more with the tools,
Speaker:but really having a sense of
Speaker:what are the differences
Speaker:between different specific applications
Speaker:and what would those mean
in terms of the level
Speaker:of risk upside and downside
that we need to manage.
Speaker:- Miguel?
Speaker:- The agentic AI
Speaker:that we're seeing at the
moment, you know,
Speaker:none of the assurance
frameworks were really geared
Speaker:for that development.
Speaker:And agentic AI requires,
again, another,
Speaker:a different approach given
that it is, you know,
Speaker:involves a level of autonomy and,
Speaker:and so providing the
guardrails around
Speaker:what agents are allowed to do
Speaker:or the, the delegation
rights that they have
Speaker:and how you manage that diffusion
Speaker:throughout the organization.
Speaker:So I think it's imperative at
the moment that you keep to,
Speaker:you keep iterating and refining
Speaker:your risk and assurance models.
Speaker:It's not once and done.
Speaker:We have to keep reviewing
Speaker:whether they are fit for purpose
Speaker:and adapting them and updating them
Speaker:as the technology continues to evolve.
Speaker:- Daniel, Miguel, thank you so much
Speaker:and to you for listening.
Speaker:If you'd like to read
Speaker:BCG's latest "Trust
Imperative 5.0" report,
Speaker:you can find the link
in the show notes.