Artificial Intelligence (AI) In Government Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Offering (Hardware, Software, Services), By Technology (Machine Learning, Deep Learning, Machine Vision, Natural Process Learning), And By Geography - Forecasts From 2023 To 2028

Artificial intelligence (AI) in the government market was valued at US$8.80 billion in 2021.

In recent years, governments in different countries are taking a keen interest in artificial intelligence (AI) technology. They are increasingly investing in artificial intelligence (AI), spending budget and time on pilot programs for various AI applications while discussing with people in the field the future implications of this technology for various public projects. The growing volume of big data is the major factor in increasing the adoption of artificial intelligence (AI) technology across the government sector. It reduces the cost of storing and processing that data. The rapid adoption of cloud computing solutions also contributes to the market growth of artificial intelligence (AI) in government as cloud computing brings together data and cognitive services, along with edge computing which allows for a fast response time by the deputies. With improving machine learning capabilities, governments will likely invest more in artificial intelligence (AI) research. Currently, world governments are working with industry leaders as well as academia on several AI projects, ranging in application from coordinating traffic to digitizing backlogs of government documents. This will continue to boost the market growth of artificial intelligence (AI) in government until the end of the forecast period.

The most common application of artificial intelligence in the government sector is the use of chatbots. Earlier, they tend to be used for very narrow applications, answering simple routine questions. Nevertheless, their value increases with more conversations and questions while providing feedback to improve customer service. Since people are already using AI for a digital assistant, bot, or some intelligent service in the commercial space, the government is also required to imbibe this technology for the same.

The proliferation of artificial intelligence (AI) in government requires a macro-level strategy to be adopted by governments on account of the disruptive potential of this technology. Governments are taking several initiatives and implementing policies that are coherent with the better use of AI across the public sector, thus positively impacting the overall market growth.

However, the adoption of artificial intelligence (AI) in state and local governments is increasing at a slower pace and smaller scale than in the private sector. Many governments still need to upgrade their legacy IT infrastructure to use AI technology to its full potential while reducing compatibility issues. Moreover, many government departments lack the necessary computing resources for AI projects since heavy data might require more expensive graphical processing units, thus hindering market growth. Another factor restraining the growth of AI in the government market is the lack of data scientists and subject matter experts required by the government to determine problems that AI could solve for a given government department.

Artificial Intelligence (AI) in the government market is segmented by offering, technology, and geography. By offering, the global artificial intelligence (AI) in the government market is segmented into hardware, software, and services. By technology, the market is segmented into machine learning, deep learning, machine vision, and natural process learning.

North America holds a significant market share throughout the forecast period

Geographically, Artificial Intelligence (AI) in the government market is segmented as North America, South America, Europe, the Middle East, Africa (MEA), and Asia Pacific (APAC). North America accounted for a significant market share in 2019 and will remain at its position until the end of the forecast period. Early adoption of new advanced technologies and the presence of major market players in the region support the growth of this regional market. The United States is the major market in this region, as the country has already started incorporating artificial intelligence technology for several public projects. For example, the New York City Department of Social Services (DSS) partnered with IBM to develop a portal for their initiative- the Supplemental Nutrition Assistance Program (SNAP), for which government agency employees were needed to process around 70,000 SNAP applications per month. IBM Watson helped find a scalable solution to maximize outreach to the customer base. In 2015, the U.S. Citizenship and Immigration Services (USCIS) launched a chatbot named Emma, which answers questions on immigration and takes visitors to the right page of the USCIS website. Furthermore, the U.S. and Canada are investing heavily in R&D for different AI applications, which will continue to drive the market growth of Artificial Intelligence (AI) in government in North America during the forecast period. The country aims to become the world leader in artificial intelligence (AI) by 2025, using this technology by the central government to monitor and control its population.   

Asia Pacific will witness a substantial CAGR during the forecast period, majorly attributed to the mushrooming investment in artificial intelligence (AI) technology in China. Other APAC countries are also investing in AI for public projects on account of the growing popularity of cloud computing, digitalization, and the rising volume of data. In 2016, Singapore’s government partnered with Microsoft on its “Conversations as a Platform” for its Smart Nation Initiative to explore next-generation government services based on a shift towards conversational computing using chatbots.

Competitive Insights

Prominent key market players in Artificial Intelligence (AI) in the government market include Accenture, Microsoft Corporation, ALEX - Alternative Experts, LLC, Alion Science, and Technology Corporation, IBM, and SAS Institute Inc., among others. These companies hold a noteworthy share in the market on account of their good brand image and product offerings. Major players in the Artificial Intelligence (AI) in the Government market have been covered along with their relative competitive position and strategies. The report also mentions recent deals and investments of different market players over the last two years.

Key Developments in the market:

• In June 2022, Canada's Ministry of Innovation, Science, and Industry announced the commencement of Pan-Candaian's Artificial Intelligence's second phase. This launch, powered by an investment of over US$ 443 million, reflects the government's objective to boost the commercialization and adoption of AI throughout the country's economy.
• In April 2022, bound by common interests, India and the United States signed a space situational awareness agreement. The duo's objective is to deepen their collaboration in cyberspace and space domains and acquiesced to launching a Defense AI Dialogue while also expanding the joint cyber security training program.

COVID-19 Impact:

COVID-19 had a positive impact on Artificial Intelligence in the government market. The upward trend in the market was attributed to the growing number of investments in AI. With the advancing technologies, multiple governments are developing and deploying strategies to penetrate the said technology into the governments' operations, thereby increasing the investments. On a similar note, in 2020, the Chinese Communist Party declared its ambition to grow as the world leader by 2030 by leveraging the power of AI.

Artificial Intelligence (AI) in Government Market Scope:

 

Report Metric	Details
Market Size Value in 2021	US$8.80 billion
Growth Rate	CAGR during the forecast period
Base Year	2021
Forecast Period	2023 – 2028
Forecast Unit (Value)	USD Billion
Segments Covered	Offering, Technology, and Geography
Regions Covered	North America, South America, Europe, Middle East and Africa, Asia Pacific
Companies Covered	Accenture, Microsoft Corporation, ALEX - Alternative Experts, LLC, Raytheon Intelligence & Space, IBM, SAS Institute Inc., DataRobot, Inc., DigitalAI, Deloitte Touche Tohmatsu Limited, C3.ai
Customization Scope	Free report customization with purchase

 

Market Segmentation:

• By Offering
  • Hardware
  • Software
  • Services
• By Technology
  • Machine Learning
  • Deep Learning
  • Machine Vision
  • Natural Language Processing
• By Geography
  • North America
    • USA
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Spain
    • Italy
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Others
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Indonesia
    • Thailand
    • Others

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