Seven trends reveal opportunities for bold government decisions and decisive actions in 2026
SAS public sector experts Jennifer Robinson and John Anthony Balla set out key government trends for 2026 – with a focus on AI – and what the implications are for decision-makers this year and beyond
Uncertainty sunsets ‘business as usual’ in government
In 2025, uncertainty defined the public sector’s operating environment, as ‘business as usual’ for government quickly became a thing of the past. Uncertainty would indeed be the single term to capture the essence of 2025 if we had to choose only one, and while it’s premature to apply that term to 2026, it’s that uncertainty that pervades so much of daily life today that sets the stage for what lies in store for the future as we enter a new year.
What is clear looking ahead to 2026, is that sweeping market drivers are reshaping the public sector through their impacts on the daily lives of individuals around the world stemming from geopolitical tensions, economic fragmentation, technological adoption, climate volatility, and regulatory changes. From those market drivers, seven distinct public sector trends emerge that have a set of imperatives for public sector leaders to make programme changes or policy updates to different degrees. And while some of these trends also have implications that some consider to be crises, the most constructive way to translate imperatives into positive action is to regard them first through the lens of opportunity.
The seven opportunities emerging
Indeed, at the dawn of the historically tumultuous 1960s, then-US senator John F Kennedy said to the National Conference on Civil Defense: “When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity.” With the benefit of retrospect, we see that the senator would become the next US president, and his administration would be marked both by the rising perils of the escalating cold war and also the bold decisions and decisive action that would shape the world for decades to come.
Governments today have not only been responding to the current market drivers – they are being reshaped by them. The drivers describe the environment from which seven public sector trends are emerging, each of them presenting government leaders with specific parameters that define that aspect of the uncertain environment and each trend prompting the need for bold decisions and decisive action.
1. Data governance becomes strategic
There is increasing acceptance that facilitating AI adoption is necessary for governments to foster collaboration, accelerate decision-making, and improve the delivery of integrated public services – and siloed data undermines AI’s ability to help with all of those imperatives.
As a result, governments are increasingly dismantling data silos as a strategic imperative, in addition to taking other steps to improve data availability by:
- Adopting data governance frameworks,
- Launching cross-agency governance bodies to oversee data strategy, and
- Modernising their legacy systems.
2. AI adoption accelerates
2026 will be the year that many governments take bolder steps with AI adoption, applying them more deeply into their core operating functions. These moves will have been made possible by wider acceptance of AI by individuals who use it for boosting personal productivity.
Natural extensions to those productivity-centred goals are automation achieved with AI agents and agentic AI. The AI work underway will lead toward the next frontier beyond 2026 – ‘invisible AI’ – which refers to systems operating seamlessly in the background, optimising processes without human intervention.
3. AI governance becomes fundamental
Proof points continue to support AI adoption as a source of productivity gains by automating repeatable tasks, and it is accelerating with the uptake of AI agents. In parallel, the rise of agentic AI and more autonomous systems is prompting more and more leaders to realise the need for trustworthy outcomes as new questions are raised about human oversight and ethical deployment.
In response, governments worldwide are accelerating efforts to embed technology-driven safeguards into AI systems to promote transparency, accountability and robust governance. The EU AI Act is perhaps the highest-profile example of this, prompting similar laws in other regions of the world. These new laws require public sector organisations to embed oversight, transparency and accountability that begin with data management through modelling, application and deployment of the AI, and establish governance frameworks to ensure compliance with AI laws.
4. Digital infrastructure takes the spotlight
A big part of what fuelled uncertainty in 2025 has been political polarisation. It was a watershed year to remind everyone of harsh truths, such as that political shifts can trigger sweeping policy changes, potentially leaving countries stranded without full control of their systems and data when so much of today’s technology is concentrated in US service providers.
Political polarisation has prompted a shift in mindset such that no longer are threats from enemy nations the primary driver of sovereignty efforts and it is rapidly intensifying, especially outside of the United States. Digital sovereignty is as much a cultural phenomenon as it is about national security, especially in countries with regional native languages and cultures.
This new reality is compelling these governments to rethink their digital strategies and prioritise self-sufficiency in data, AI and other technology. This need for self-sufficiency is being met by the emergence of regional tech markets and regulatory efforts to curb the influence of foreign technology firms.
5. Upskilling becomes a critical enabler
Governments worldwide are navigating a rapidly evolving workforce landscape shaped by fiscal pressures, changing administrations, technology, and rising public expectations. Budget constraints remain a dominant challenge, forcing agencies to prioritise essential programmes and allocate resources judiciously. At the same time, AI is beginning to change public sector work and how we do it.
As AI begins to transform work, skills gaps remain a major barrier to AI transformation, with governments beginning to invest more in data and AI literacy, upskilling, and training on AI ethics and legal considerations. By far the greatest foray into AI has been the use of large language models (LLMs). Civil servants are increasing productivity by using LLMs to perform internet searches, draft content, automate routine tasks, and answer repetitive enquiries through chatbots.
The shortcomings of using LLMs alone will likely drive offices to implement traditional AI solutions and AI-powered agents. In these, LLM-powered copilots will facilitate the use and interpretability of results which will put analysis into the hands of non-technical staff.
Some governments are beginning to encounter an unexpected challenge: employees freed from performing rote tasks are now finding their work too demanding. Harder problems reach human agents, pushing many civil servants beyond their skill level and increasing burnout risk. Thus, training needs to encompass not just AI but other key aspects of the job function, likely necessitating an overhaul of an organisation’s training curriculum.
6. Innovative investigators foil crafty criminals
In an era of budget reforms sweeping the globe and growing public awareness of government excesses, what’s lost to fraud, waste and abuse is more consequential than ever – both financially and reputationally. However, only 1 in 10 senior and mid-level public sector employees surveyed for SAS’s recent Trust and Transparency study say that they have all the resources they need to tackle fraud. Those that are adopting advanced analytic and AI technologies for investigations are driven by an urgent need to combat increasingly sophisticated threats as efficiently as possible.
This past year saw a rapid proliferation of AI-generated crimes, necessitating the use of AI to fight AI. As bad actors leverage GenAI for fraud, deepfakes and misinformation, governments are compelled to deploy AI-powered tools to detect and counteract these threats.
It isn’t just the volume of crimes that concerns governments and citizens. The credibility of AI-generated fraudulent documents, invoices, receipts, images and audio are tricking humans and systems. In particular, ‘synthetic identity document fraud’ involves the creation of highly realistic fake IDs that are being used to open accounts, conduct illicit transactions or bypass compliance processes, making detection increasingly difficult without advanced verification tools.
7. New pathways emerge at the outer edges
Edge computing is entering a transformative phase in 2026, driven by the growing need for real-time analytics and empowered by advanced technologies. Analytics at the edge has evolved to advanced AI modelling, giving rise to the term ‘edge AI’.
Edge AI has multiple advantages, contributing to better problem solving, speeding up time to action and reducing labour-intensive data analysis. In addition, it addresses the need for data storage cost savings, efficiency gains, and data security imperatives for public sector entities. This is because instead of sending all collected data to the cloud, edge systems prioritise processing data locally and transmit only necessary or anomalous data.
Bold decisions and decisive actions start with trust
In the recent past, any one of these seven trends emerging before government leaders would have prompted hearings, investigations, deliberative negotiations and serious resource reallocation discussions. They may have emerged over time, and multiple time-tested pathways would have offered possible solutions. That was then, and the reality now is these seven trends are upon us simultaneously. Some emerged quickly, prompted by and/or accelerated by the very technologies that have completely upended entire industries.
The seventh trend, centred on the emergence of edge AI, is not a panacea but it is a good example of how technology holds the key to unlocking the opportunities at the core of what often present themselves initially as thorny challenges. And the real key rests on trusting in the systems and data available to make the bold decisions and take the decisive actions.
In the Kennedy era, it was the courage and confidence of a bold new president that called upon the nation to commit by the end of the decade to putting a man on the moon and returning him safely to earth. And we now know that what made that bold vision a reality was built on a foundation of the objective truths of data, with years of collaboration and countless bold decisions to take decisive actions. Every organisation has its own data with their own objective truths – unlock yours with bold decisions and decisive actions.
SAS is hosting the webinar Top data and AI trends for government in 2026 on 21 January – find out more and register.
About the authors
Jennifer Robinson
Jennifer is global strategic advisor, SAS public sector, working to help governments maximise the use of their data through data integration, data management, and analytics. Jennifer has a background in software development and local government. She co-wrote the book A Practical Guide to Analytics for Government and is featured in the book Smart Cities, Smart Future. In addition to writing articles and blogs about data-driven governing, she speaks to government leaders about emerging technologies and how to strategically adopt them.
John Anthony Balla
John is global industry marketing principal for the public sector at SAS. His long experience with government entities around the world ranges from his work at Fortune 100 companies to co-founding two start-ups. He is multi-cultural and multi-lingual, and has lived and worked on three continents. He studied economics at the University of Illinois at Urbana-Champaign and earned an MBA from Georgetown University.
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