Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316146 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. 6/2025
Publisher: 
Örebro University School of Business, Örebro
Abstract: 
This paper investigates the economic and societal impacts of Artificial Intelligence (AI) in the public sector, focusing on its potential to enhance productivity and mitigate labour shortages. Employing detailed administrative data and novel occupational exposure measures, we simulate future scenarios over a 20-year horizon, using Sweden as an illustrative case. Our findings indicate that advances in AI development and uptake could significantly alleviate projected labour shortages and enhance productivity. However, outcomes vary substantially across sectors and organisational types, driven by differing workforce compositions. Complementing the economic analysis, we identify key challenges that hinder AI's effective deployment, including technical limitations, organisational barriers, regulatory ambiguity, and ethical risks such as algorithmic bias and lack of transparency. Drawing from an interdisciplinary conceptual framework, we argue that AI's integration in the public sector must address these socio-technical and institutional factors comprehensively. To unlock AI's full potential, substantial investments in technological infrastructure, human capital development, regulatory clarity, and robust governance mechanisms are essential. Our study thus contributes both novel economic evidence and an integrated societal perspective, informing strategies for sustainable and equitable public-sector digitalisation.
Subjects: 
Artificial intelligence
Implementation of technology
Productivity
Labour demand
JEL: 
E24
J23
J24
N34
O33
Document Type: 
Working Paper

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