A new study from the Oxford Internet Institute and the London School of Economics examines how governments have gradually adopted Silicon Valley’s methods of working. This shift offers important lessons as the new UK Labour government plans to integrate AI and data science into public services. However, the study also points out ongoing challenges, such as outdated IT systems, reliance on traditional tech providers, and the growing dominance of big tech companies.

Slow to modernize

The study reveals that governments in the US, UK, and Australia were slow to modernize public services due to their dependence on large, traditional computer firms, known as “systems integrators.” Public officials were also reluctant to adopt Silicon Valley’s innovative methods, which stalled progress for decades. The study suggests that to better harness AI, the public sector must avoid repeating these past mistakes.

“Our research tracks how government contracts for information systems have evolved over time. For years, public officials, working with highly traditional global tech firms, wrongly assumed that Silicon Valley’s methods didn’t apply to the public sector,” the authors explain. “But this mindset has shifted, driven by the rise of massive platform companies, the adoption of Silicon Valley technologies like cloud computing and AI, and the realization that these companies often excel in cybersecurity and managing sensitive information.”

The adoption of Silicon Valley technologies and cloud services has diminished the influence of traditional systems integrators, embedding these new tools across government departments.

Shaping government

“Over the next decade, technologies from Silicon Valley and platform companies will shape how governments handle data-intensive tasks,” the researchers note. “Digital managers within the government will be key in either accelerating or slowing down cultural change and in developing the skills needed to manage a variety of technology contracts.”

While these technologies offer significant potential for improving public services and the digital experience of citizens, the researchers caution government officials to proceed carefully and ensure these firms are held accountable.

“A major challenge for the new government will be building the expertise and capacity to fully leverage AI and address the challenges it presents,” the authors conclude. “They’ll also need to effectively manage their relationships with both traditional tech providers and Silicon Valley giants while regulating the technology market. Our research provides valuable insights to help them learn from past mistakes.”